Franchising Nov Dec 2015 by Cirrus Media

FR1115_001

- 1

2015-11-10T16:42:11+11:00

FRANCHISING

Franchising YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE | WWW.FRANCHISEBUSINESS.COM.AU NOV/DEC 2015 VOL.28/NO.6

FLASH FORWARD NOV/DEC 2015

The beauty business moving at the speed of light

AUS $6.95|NZ $7.95

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

WWW.FRANCHISEBUSINESS.COM.AU

SO YOU WANT TO BE A FRANCHISEE? WHAT OTHER FRANCHISEES WILL TELL YOU.

WATER WORKS: DIVE INTO THE POOL BUSINESS

RISK STRATEGY: WILL YOU PUT YOUR HOME ON THE LINE?

GOING BUST: WHAT TO DO IF YOUR FRANCHISOR FAILS

P.68

P.52

P.60

FR1114_000_PACK

2014-10-24T14:49:22+11:00

FR1115_003

2015-11-10T16:42:11+11:00

CONTENTS

12 FUTURE FRANCHISING COV E R STORY

The latest report sums up the sector

16 OPTIMUM BUSINESS MODEL

59 5 REASONS TO BUY

There are plenty of good reasons: here are just five, handpicked by a franchisee

The basics of the business model

60 WHAT TO DO IF A

HOW DOES FRANCHISING WORK?

A guide to location hunting for your franchise

32 HOW SECURE IS YOUR

FRANCHISE TERRITORY?

What you need to know about purchasing an exclusive territory

36 SUPPLY AND DEMAND

A legal look at what it means to work with preferred suppliers

GLOSSARY CHECKLIST LISTINGS ADVERTISERS INDEX

68 WATER WORKS

Narellan Pools and Poolwerx talk about where business is leading the franchise brands

74 PACKED WITH POTENTIAL

81 THE HANDYMAN MARKET

Growth, profit and market share in the tradesman arena

INSIGHTS

DIRECTORY

FRANCHISEE TRAINING

An insight into The Coffee Club’s award winning training program

How franchised brands are competing in the sandwich marketplace

WELCOME

LEADERSHIP

64 WHAT TO EXPECT FROM

MAKE MONEY?

REGULARS

THE SKETCH

FRANCHISOR GOES BUST

A legal view on your options if a franchisor’s business fails

Take steps before you buy to invest in a business that has a financial future

How long are you signing up for?

LEGALESE

A FRANCHISE

40 HOW CAN FRANCHISEES 44 HOW LONG IS A TERM?

5 6 104 108 110 114 116 118 121 130

A FRANCHISEE

Elizabeth Gillam offers advice on what it takes to be a successful franchisee

Inspiration at the National Franchise Convention

28 HOW FAR IS TOO CLOSE?

HOW AUSTRALIAN SKIN CLINICS GREW AND GREW

56 SO YOU WANT TO BE

46 IF I WANT TO LEAVE MY

FRANCHISE EARLY

What are my options for an early exit?

50 WHAT OTHER FRANCHISEES

WILL TELL YOU

Take a hint and listen to franchisees’ advice

52 WILL YOU PUT YOUR HOME ON THE LINE?

What’s at stake, and is there another way to finance your franchise purchase? NOV/DEC 2015 | 3 | WWW.FRANCHISEBUSINESS.COM.AU

84 A GOURMET AFFAIR

What’s next for the great Aussie burger?

88 5 THINGS I HAVE LEARNED Franchisee Parul Mehta shares her tips

90 WAVES

The newest car detailer on the block

101 STAR PERFORMERS

Who were the big winners at the Franchise Council of Australia awards?

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

FR1115_005

2015-11-10T16:42:11+11:00

( WELCOME )

he franchising sector is packed with potential. As the latest report from IbisWorld reveals, by 2010-21 it is expected that the sector will be bringing in revenue of $192.6bn – that’s an annual growth of 2.3 percent.

Franchising is, as Michael Paul, the chairman of the Franchise Council of Australia highlights, “the backbone of Australia’s small business community”. In this edition we look at what the future holds for the sector, and take some inspiration from the stellar performers who were celebrated for their excellence at the FCA awards night. We also find out more about the FCA’s view of the sector, and hear from noteworthy business figures about ways to achieve success. One business that has put its growth on speed dial is our cover star Deb Farnworth-Wood’s Australian Skin Clinics. You can read on page 94 about her approach to building and developing a beauty business that took out seventh slot in the BRW Fast Starters list this year. Whether or not you have selected franchising as the future for you, or you are still considering if this business method will suit your needs, this month’s magazine has something for you: from understanding how franchising works, the length of a franchise term, the pros and cons of mortgaging your home to invest in a franchise and what success

takes, to what happens if you want to exit the franchise early or if the franchisor goes bust. We take a look at the fast food market focusing on sandwiches and burgers, check into the latest handyman industry report and discover why pool business franchisors are so optimistic. Of course behind all the brand successes are real stories of franchisees and franchisors achieving their goals, and as we do every issue we take a peek at some of the individuals who are flourishing in the franchise sector. Our next edition will be published in late January – but you don’t need to wait until then to keep up to date with news and advice. Visit our website, www.franchisebusiness.com.au, which is evolving with a fresh new look this month. You’ll discover an easy to navigate site where you can find franchises for sale, connect with your favourite brands, learn about new businesses, and of course stay informed so you are ready to make the right decision.

Connect with your favourite brands, learn about new businesses and stay informed so you are ready to make the right decision

Good luck with your search, and thank you for your support through 2015.

EDITOR Sarah Stowe P: 02 8484 0900 sarah.stowe@cirrusmedia.com.au

CLIENT SUCCESS MANAGER Joanne Garcia P: 02 8484 0731 joanne.garcia@cirrusmedia.com.au

ART DIRECTOR Justine Dunn P: 02 8484 0757 designer2@cirrusmedia.com.au

PRODUCTION CO-ORDINATOR Tracy Engle P: 02 8484 0707 tracy.engle@cirrusmedia.com.au

NATIONAL SALES AND MARKETING MANAGER David Strong P: 02 8484 0905 david.strong@cirrusmedia.com.au

For subscription enquiries call customer service: 1300 360 126 ISSN: 1321-408X

BUSINESS DEVELOPMENT MANAGER Jesse Hopwood P: 02 8007 3113 jesse.hopwood@cirrusmedia.com.au

SARAH STOWE EDITOR

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

Average Net Distribution Period ending March ‘15 - 6,746

NOV/DEC 2015 | 5 | WWW.FRANCHISEBUSINESS.COM.AU

PRINTED BY: BLUESTAR PRINT 83 DERBY STREET, SILVERWATER NSW 2128 P: 02 9748 3411

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

FR1115_006

2015-11-10T16:42:11+11:00

INSIGHTS

MAKING A PROFIT Domino’s has posted strong first quarter results for its financial year 2016 and predicts 25 percent growth on 2015 by the end of the financial year. CEO and managing director Don Meij has credited the strong start to the year to the roll-out of tech-driven initiatives designed to improve the customer ordering experience Bank of Queensland has delivered a full year profit and record cash earnings of $357m – up by 19 percent. There has been growth to the mortgage broker distribution network and in the retail network, a new standardised franchise agreement is being rolled out on a progressive basis for owner managed branches. API, the business behind the franchised Priceline chain, has made a $43.1m profit for the year to August 31 2015. ASX HOPEFULS LJ Hooker has the Australian Stock Exchange in its sights as the franchised real estate group considers floating its business. The Shaver Shop could debut on the Australian Stock Exchange early in 2016. NEW DIVISION Jim’s Group is celebrating its 40th Division with the creation of Jim’s Asbestos Removal. The newly created division brings the current total number of Jim’s franchisees to 3469.

Noodle Box acquires Wok in a Box chain The 70-store strong Noodle Box is snapping up rival chain Wok in a Box and its 32 franchise restaurants. The acquisition will consolidate Noodle Box as one of Australia’s leading franchise networks with more than 100 restaurants nationally. Noodle Box chief executive, Ian Martin, told FranchiseBusiness, “It’s an exciting time.” Wok in a Box is a “near perfect strategic fit as Noodle Box moves towards becoming a world class franchise restaurant chain”, he said. Martin said rationalising the noodle chains within Australia’s fast food franchise sector made sense. The scale of the new business will give Noodle Box a competitive advantage and makes sense geographically: Wok in a Box has a footprint in Western Australia and South Australia, Noodle Box is predominantly in Victoria and Queensland. The acquisition brings some synergies to the business, which will directly help franchisees, he said. The biggest synergy is the leverage of the marketing fund of a 100-plus store chain.

The second is the supply chain, which Martin describes as “quite robust” and set to deliver the franchisees better pricing. And guest experience will be improved thanks to the systems and processes in place. The acquisition comes two and a half years into a three year strategy for Noodle Box. After the integration of the Wok in a Box business, domestically the focus will be on accelerating greenfield sites – adding three to five a year. Martin also expects conversions to Noodle Box by independent operators running similar businesses, without the scale. The business is looking further afield too, with international expansion underway. “Internationally we are not about flag placing in multiple countries. We’ve signed a 65 outlet deal for the Middle East; it’s in the early stages with four outlets now open and two under construction. The master franchisee will be subfranchising in other Middle East countries. “We have also signed a Memorandum of Understanding to enter the Indian market.”

NOV/DEC 2015 | 6 | WWW.FRANCHISEBUSINESS.COM.AU

FR0715_000_CAS Advertisement275x205.pdf

CMY

2015-06-24T10:56:07+10:00

23/06/2015

9:54 pm

FR1115_008

2015-11-10T16:42:11+11:00

INSIGHTS

Will a new franchise model fit the bill? Franchisees that make an annual gross profit under $500,000 will be asked to share their profits on an equal basis with the franchisor.

Franchisees in the 7-Eleven network will be offered a new business model that equates profit share percentage to gross profit. In an attempt to redress concerns that the existing 57-43 percent profit sharing model was unsustainable for franchisees, the troubled convenience store has developed a three-tier model the interim CEO Bob Baily believes “meets the test of both fairness and mutual benefit”.

OUR TOP FACEBOOK STORIES Have you liked Franchising magazine on Facebook? Our recent editorial posts: • Yes, you will need to know about unfair contracts (see our Legalese column) • Go Michelle Payne! We love a winner • Would you join one of these speedy performers?

Any franchisee bringing in a gross profit above $500,000 but below $1m will be keeping 47 percent of their profits, the franchisor receiving 53 percent.

EXPRESS MOBILE SERVICES AND THE ACCC

For stores that earn more than $1m, the profit share equation will be 56/44 percent in favour of the franchisor.

The Australian Competition and Consumer Commission has investigated Express Mobile Services over allegations of non-compliance and misleading representations to franchise buyers.

The unusual franchise structure at 7-Eleven has seen the franchisor pay for rent and utilities, the franchisee foot the bill for its payroll, store supplies, cleaning and phone expenses. New to the agreement is the franchisor funding of bank and credit card fees. Franchisees keen to adopt the new agreement will be required to be compliant in payroll and record-keeping. YOU CAN READ THE FULL BACKGROUND TO THE 7-ELEVEN STORY ON OUR WEBSITE: WWW.FRANCHISEBUSINESS.COM.AU

The mobile professional services franchise has multiple divisions across Australia, including pest control and test and tag electrical services. The ACCC was concerned its franchise agreements contained waivers of verbal or written representations and so did not meet the requirements of the governing regulations, the Franchising Code of Conduct. The Commission also expressed concerns that franchise buyers were being misled by the information provided online and in brochures. Express Mobile Services has acknowledged the ACCC’s concerns and has given a court enforceable undertaking for the following:

Do your due diligence on more than one opportunity and on more than one franchise brand because once you have signed the franchise agreement you are in for the long haul Elizabeth Gillam, mentor, author and former franchisee

1. For three years it will not make any representation about a franchise (the nature, value, benefits, value of) without prior independent legal or financial verification. 2. It will inform each franchisee that it does not intend to enforce the waiver of representations clause and offer to remove this clause from the agreement. It will also advise franchisees of the ACCC’s free online franchise education course. 3. To remove any representations in advertising and on its website that indicate a supply of initial customers. 4. It will establish and implement a Consumer Law Compliance Program, which will be maintained for three years. In the franchise purchasing process, franchisors are required to ensure information given to potential franchisees is accurate.

NOV/DEC 2015 | 8 | WWW.FRANCHISEBUSINESS.COM.AU

FR0915_000_SNA

2015-09-04T15:30:34+10:00

A global leader in tools and franchising

A proven and established business model

No fixed office or workshop

Mobile showroom

Give customers personal service, premium products and finance solutions

Extensive training and support A market leader for mechanics

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

To learn more phone LES COPPIN - 0419 609 794 Franchise Recruitment Manager

FR1115_010

2015-11-10T16:44:37+11:00

INSIGHTS

and gourmet hot dogs alongside American beers and cocktails, with the focus on big servings.

LORD OF THE FRIES GOES WEST Fast food franchise Lord of the Fries is to open its first Perth outlet in William Street later this year.

LONE STAR EXPANDS There are 10 further Lone Star Rib House restaurants expected to open within the next 12 months. Two stores are under construction in Newcastle and Glenelg and scheduled to open before the end of 2015. Another eight stores are planned to boost the brand’s national presence. The Chatswood store was the most recent outlet to open its doors. The Texan themed franchise chain was developed in 2010 by the founders of the Outback Jack’s Bar & Grill business. The brand was launched in Tuggerah, New South Wales, when the former Lone Star Steakhouse and Saloon rebadged to Lone Star Rib House. Operating in the popular casual dining market, Lone Star Rib House serves slow cooked ribs

The WA franchisee has signed a minimum three-store license with Lord of the Fries. The vegetarian fast food chain will be opening in Parramatta early next year and is in negotiations for master franchises for New Zealand and India. Mark Koronczyk, director, said “In the past 12 months we have redesigned our menu; making it more aesthetically pleasing, adding food photography, changing the layout, look and feel. This has proved very successful.” The company, which started in Victoria, continues to innovate.

stringent standards of social and environmental performance, accountability and transparency. “In terms of our franchise offering, it’s had a huge effect on our daily operations and has shaped the company moving forward so we’re attracting like-minded franchisees who believe in the vision we are trying to create and maintain. “Our aim has always been to grow the business steadily and to have all our franchisees and company owned stores experiencing good growth. We’re very proud we have been able to achieve this thus far and plan to continue our profitable relationships in future.”

EAGLE BOYS HAS A NEW CEO The Queensland based pizza franchise has appointed its general manager retail, Nick Vincent, to the executive role.

“We’ve been working on becoming a B-Corp company, which has us refining our entire operation to become more socially responsible.”

Vincent will be focused on building both domestic and overseas expansion. Over the last 12 months the company has focused on expanding into international markets such as Fiji, India and the Middle East.

Vincent indicated innovation

Corps

are

certified

for

The most spectacular leaders are often no braver than ordinary people, they are just braver for a little bit longer Todd Sampson, non-executive chairman, Leo Burnett

NOV/DEC 2015 | 10 | WWW.FRANCHISEBUSINESS.COM.AU

and product development will continue to be a big focus for the company for the next five years. “Improving the customer experience through the creation of new pizzas and making them easier to order will be a key focus, as well as expanding our operations in India where we are planning 250 stores. “The UK, Japan, Vietnam, Africa and the UAE markets have also expressed interest, however we will continue focusing on India and adapting our model to suit that market.” Vincent has worked with some of Australia’s largest brands, including The Coffee Club, IGA, Westfield and McDonald’s. He joined Eagle Boys in 2014.

BEAUMONT TILES AIMS FOR $250M Beaumont Tiles is set for 20 percent growth over the next 12 months and is aiming for $250m turnover by the end of 2016. Four new shopfronts will be introduced under The Beaumont Studio banner, an initiative tailored specifically for builders designers and architects. Beaumonts has an aggressive growth story in Queensland with a $10m plus investment set for 2016. This will include the opening of a further six outlets and the construction of a 12,500sqm distribution centre opening in the Brisbane suburb of Rochedale in March. Another 16 stores are planned across Australia, with an emphasis on growth in New South Wales and Victoria. Beaumonts first Style Studio is set to open in Brisbane’s Fortitude Valley in early 2016. This will be followed by Melbourne, Sydney and Adelaide.

FR0714_000_PALM

2014-06-30T14:47:22+10:00

GLOBAL

TREAT

YOURSELF

TO SUCCESS!

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

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

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

FR1115_012

2015-11-10T16:47:59+11:00

Fitness accommodation marketing support

Purchases

Recruitment Business plans

brand

health Aged care

lifestyle

Rent

Retail

Competition

Gardening

Multi-brand systems Franchise fees Pet services advertising

experienced franchisor

Wages

Part-time

Consolidation

books

nutrition consumer sentiment

Service-based

FRANCHISING FOR THE FUTURE NOV/DEC 2015 | 12 | WWW.FRANCHISEBUSINESS.COM.AU

2015-11-10T16:47:59+11:00

modest profitability

time-poor consumers

Buying power

Mature sector

Online retailing Emerging

multi-units

courier services

Discretionary income

well-being

Gifts Food retail Proven business Profi model t margins International brands

Innovation Cleaning

Diversification

beauty

FR1115_013

low volatility Steady growth hairdressing

Market penetration

he franchising industry is still growing, despite being a mature sector. In the five years up to 2015-16 there is an expected annualised growth of 2.8 percent. In the five years through to 2020-21, growth will be a steady 2.3 percent. That will take the sectorâ&#x20AC;&#x2122;s franchisor revenue to $192.6 bn.

Franchising has seen some ups and downs in trading conditions, and as it heads into the next five years consolidation of businesses is expected to create more multiplebrand franchisors. There will be more franchisees across their networks too, and a trend for these franchisees to operate more than one unit or outlet. Perhaps surprisingly the growth from new businesses has come from retail-based operators entering the franchise arena. Ambitious Generation Y who see franchis-

ing as a way to run a business with support and training have, with financial assistance from their parents, helped drive the sector on. Corporate downsizing has also brought in new franchisees. Looking ahead there is likely to be stronger demand for service-based franchise operations in line with social and demographic trends. Consumers will increasingly look to have some domestic chores outsourced as they are time-poor but with discre-

NOV/DEC 2015 | 13 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_014

2015-11-10T16:47:59+11:00

tionary income. Gardening and cleaning, for instance.

larly when there are local bricks-and-mortar stores, remains a challenge for franchisors.

Day spas and beauty salons are expected to continue their growth trajectory as consumers with spending power look to indulge in luxury goods and services.

KEY SECTORS

And an ageing population adds its own dynamic to the spending pattern – a focus on healthier lifestyles and travel, but also the desire to access aged-care at home. According to the latest IbisWorld industry report, Franchising in Australia, “Industry growth areas include service-based franchises such as health, nutrition and wellbeing, along with aged care services and recreational services. “These types of franchises require at least 20 to 30 establishments to generate enough revenue to cover marketing and overhead costs.” It’s good news for franchisees that service time-constrained customers with high disposable incomes.

RETAIL OUTLOOK Strong competition in well-established industries such as the food sector will continue. It is expected that emerging niche areas like the health and wellbeing services will be less affected by competing brands. IbisWorld suggests profitability growth can be achieved through greater market penetration, expansion or diversification of the goods or services on offer, and of course by making general cost reductions. As the Franchising Australia 2014 report from Asia Pacific Centre for Franchising Excellence outlined, online retailing is still being used by fewer than 50 percent of franchise systems (45 percent). But that should rise to about 65 percent as more franchisors implement their plans to trade online. According to a recent survey from the Commonwealth Bank, retailers in general are forecasting online sales growth of 20 percent. The CommBank Retail Insights report indicates the value of the average online sale has risen 14 percent, year on year. Online retailing will allow franchisees themselves to reach customers in new regions, particularly in rural areas, but handling the allocation of business, particu-

IN 2015-16 $$ up

3.3% to $172.2bn Pick:

The key sectors remain retail trade and accommodation and food services. Despite economic uncertainty and fluctuating consumer sentiment, the size of the retail arena – which accounts for 27.1 percent of the sector – has grown since 2010. But there’s less profit to be achieved because of the higher wages and penalty rates introduced.

aged care

$ up

food retail

2.3% to $192.6bn Pick:

health wellbeing services services

KEY EXTERNAL DRIVERS

Fast food chains have helped drive the growth of the accommodation and food sector (18.1 percent). Healthy eating in particular has boosted this part of the franchising arena, which includes coffee shops and hotels.

real household consumer discretionary income sentiment index

At 14.7 percent of the franchising sector, the administrative and support services includes domestic and commercial cleaning, gardening services, office support and travel agencies.

cash rate

average weekly hours worked

OPPORTUNITIES FOR SPECIALISATION

education

construction

healthcare

MARKET SHARE

The remaining 29.6 percent of franchised businesses is made up from services such as real estate, transport, rentals, financial, education and training.

Metcash 6.9% Harvey Norman 3.4%

THE RULE OF LAW The sector is governed by the Franchising Code of Conduct which is regulated by the Australian Competition and Consumer Commission. In January this year a new revised Code came into force, and this updated regulation is expected to strengthen relationships between franchisees and franchisors. There's a great focus on both parties acting in good faith, and for franchisors a requirement for greater transparency and disclosure.

health services

IN 2020-21

When it comes to the staffing of franchised outlets and businesses, while individual franchises will require their complement of full-time, part-time and casual staff, the sector is expected to follow the national trend for increased part-time and casual positions.

Personal services (10.5 percent) have grown because they are predominantly low-cost, mobile operations that find it easy to attract new franchisees. The dominant services here are home-based – technology and outsourcing trends have boosted their growth. Australia’s pet services market has been fuelled by demand for pet-care merchandise.

courier

Retail Food Group 2% McDonald’s 1.1% 7-Eleven Stores 0.8% Yum! Restaurants 0.5% 0

2 3 4 5 6 7 [estimated market share]

SOURCE: IBISWORLD FRANCHISING IN AUSTRALIA INDUSTRY REPORT, OCTOBER 2015

NOV/DEC 2015 | 14 | WWW.FRANCHISEBUSINESS.COM.AU

FR0715_000_RED

2015-06-25T13:46:50+10:00

RULE THE ROOST. Red Rooster Franchise Opportunity. This is a real opportunity to be seized. Red Rooster is looking for self-motivated people to become owneroperator franchisees. If you’re a hard-working people-person, with a can-do attitude, you’re just the kind of person we’re looking for. You’ll find all the details on how to apply at

www.redrooster.com.au/franchise

QSR0001 RedRooster_FranchisePress_FA01.indd 1

16/06/2015 10:11 am

FR1115_016

2015-11-10T08:27:27+11:00

an optimum

BUSINESS MODEL

“W

e are the backbone of Australia’s small business community.” So said Franchise Council of Australia chairman Michael Paul, at the industry’s annual conference, the National Franchise Convention.

This year the conference has focused on best practice, highlighting the importance of the franchising model to Australia’s small business sector. “Ninety five per cent of franchisors and almost all franchisees fall within the definition of a small business.” Michael Paul told more than 400 delegates at the conference that franchising provides the critical structure that cradles and supports Australia’s all-

important small community.

LEFT: MICHAEL PAUL, FCA CHAIRMAN

business

“Our sector employs an estimated 460,000 plus people through an estimated 79,000 independently-owned and operated franchised outlets across approximately 1180 business franchise systems in Australia.” Paul used the conference to affirm the role of franchising.

achieving growth rates that outperform the broader small business market – backing up the premise that as a method of doing business – franchising is the optimum small business model.

“We generate an estimated $144bn in turnover each year,

“We know that the leaders of Australian franchise systems

NOV/DEC 2015 | 16 | WWW.FRANCHISEBUSINESS.COM.AU

are highly skilled, ethical and committed men and women who generate national wealth, create jobs and through innovation ensure Australia keeps up with rapid, ongoing change.” Paul also told the Convention that that the FCA, as the sector’s peak body, was continuing

FR1114_000_STLOUIS_

2014-10-21T11:32:22+11:00

FR1115_018

2015-11-10T08:27:27+11:00

KEYNOTE SPEAKERS INCLUDED FORMER BEST & LESS CEO HOLLY KRAMER, BRAAP FOUNDER BRAD SMITH, AD GURU TODD SAMPSON, AND FORMER AFL CHIEF ANDREW DEMETRIOU.

LENARD POULTER, FOUNDER OF LENARD’S CHICKEN Poulter believes in constantly working on reinventing the business. But stay focused, he advises. ✱ Know your customer. ✱ Motivate and encourage people. ✱ Keep discipline and vision.

to work closely with the Fair Work Ombudsman and Fair Work Australia in the wake of the 7-Eleven allegations. “We, the FCA, support the immediate allocation of greater resources to allow the Fair Work Ombudsman to pursue breaches of workplace laws. We support the implementation of higher penalties for those who have been found to breach workplace laws. This is in our interests as a sector committed to best practice – and ensures that our members can compete in a business environment that is a level playing field. “We will continue to work with the Fair Work Ombudsman and Fair Work Australia to ensure the franchising sector undertakes best practice in workplace relations. We have, and we will continue to beat the drum on the need, the pressing need for the extension of powers and additional resourcing of Fair Work Australia and the Fair Work Ombudsman to ensure compliance.”

WHAT DOES IT TAKE TO BE A GREAT LEADER?

is important because no-one really has all the answers.

Advice aplenty could be found from major business figures both from within and outside the franchising sector at the National Franchise Convention 2015.

“Test, fail, learn. Disrupt your own model, enable your staff.”

A full program of keynote speakers and Hall of Fame panellists dished out business tips and inspiration over the two-day conference at the Gold Coast.

Kramer is responsible for the Best & Less turnaround and came to the valued-based chain without any retail experience.

Here’s a taste of what they had to say: GENEVIEVE GEORGE, ONE SHIFT

HOLLY KRAMER, FORMER CEO, BEST & LESS

“I was so passionate about getting it right, but culture is critical to how you build the team. Diversity is valuable. Listen to your people. Communicate to your staff.

At only 24 Gen George has made her mark in business with her fast-growing recruitment site One Shift.

“Make the business profitable.”

“You have to practice what your preach,” she says.

1. You set the culture, you set the expectations of your team. 2. Happy teams = happy customers. 3. If you don’t embrace the power of new technology, your competitors will.

Focus on building a supportive team, and the more creative and innovative you can be, the better. Transparency among the team

Three foundations of good leadership:

NOV/DEC 2015 | 18 | WWW.FRANCHISEBUSINESS.COM.AU

“The integrity of the company is reflected in franchisees who are profitable. The franchise relationship is crucial, once you lose sight of that, anything can happen.” TODD SAMPSON, NON-EXECUTIVE CHAIRMAN, LEO BURNETT Take a different approach to problem solving, the advertising guru and star of tv show The Gruen Transfer suggests. And this can work at any level of business. ✱ Identify the problem. ✱ Assemble up to six eclectic people. ✱ Meet in a room for 20 to 30 minutes. ✱ Be open to genuine ideas without filters. “Creativity is the last remaining competitive advantage today,” he says. But it can be hampered by the other great influencer, fear. “The most spectacular leaders are often no braver than ordinary people, they are just braver for a little bit longer.”

FR1115_000_CIV

2015-11-04T15:12:44+11:00

FR1115_020

2015-11-10T08:27:27+11:00

Serving up

CONFIDENCE H

ospitality might be a highly competitive industry but the view across the sector is positive about business. That’s according to the Silver Chef 2015/16 Hospitality Industry Success Index (HISI) Report.

The survey reveals that despite a near-saturated market with many existing cafes and restaurants, nationwide business confidence is high. Silver Chef founding director Allan English says “Almost half of all restaurants and cafes surveyed feel confident their business will grow and expect profits to increase over the next 12 months. “Almost all hospitality businesses work off very thin profit margins but they are hanging in there, having a go and growing the economy at the same time,” he says. A report published in 2013 in Fairfax’s GoodFood analysed

expenditure patterns over the longer term, finding Australians have emerged as big spenders on eating out. It found where households spent around one-fifth of their weekly food budget on eating out in 1984, that figure is now closer to one-third. The HISI Report indicates that longer working hours means Australians are putting a greater reliance on restaurants, cafes and takeaway outlets. Check our articles on the sandwich market (p74) and burgers (p84) to see how these fast food categories are responding to the changing tastes of Australian consumers. The HISI Report also notes that consumers are now much more educated and active and thanks to the explosion of cooking shows and review sites like Zomato (acquiring Urbanspoon), everyone is an expert. “People are enjoying having a voice when it comes to directing food trends and this is being seen in the types of restaurants and

NOV/DEC 2015 | 20 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_021

2015-11-10T08:27:27+11:00

cafes that are emerging,” English says. “The industry is responding to these trends by opening up exciting new ventures from paleo cafes to juice and smoothie bars.”

TIPS FOR BUSINESS BOOSTS The report advises hospitality operators to embrace sustainability. “The global green movement is only gaining traction, so make sure you’re on the right side of the fence.” It also highlights the importance of understanding generational differences and needs, and recognising the increasing demand for dietary options like organic, vegan, allergy aware, kosher.

And the franchises scored again when it came to reducing wastage: 80 percent of franchises said this was their most popular way to cut costs. Loyalty programs did not rate well across the hospitality sector, with only 11 percent of cafes, and 11 percent of takeaway outlets open to introducing loyalty programs to boost revenue.

THE INDUSTRY SURVEY Almost a quarter of respondents surveyed are new business (less than 12 months old).

So what are the popular strategies for increasing revenue?

More than nine percent of the Australian workforce (more than 1,200,000 Australians according to ABS Statistics) is employed in the hospitality sector.

Marketing was listed by 90 percent of franchise brands as a key strategy, trumping the independents.

A total of 409 customers were surveyed to provide insights on the industry.

Franchised businesses also proved the best at upselling, with 63 percent of those surveyed promoting add-on items to boost profits.

Silver Chef provides hospitality funding to the restaurant, catering and franchise industries in Australia. This is its sixth report.

NOV/DEC 2015 | 21 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_022

2015-11-09T09:01:43+11:00

or many Australians owning a business is a long-held dream. And franchising is an opportunity for anyone to grasp the chance of business ownership.

business model, brand, marketing strategy, initial and ongoing training. There might be site selection and lease negotiation, mentoring through the network of existing franchisees. One of the advantages of the franchising method is the incentive provided for franchisor and franchisee – both share in the success of the franchise.

So what exactly is franchising? Franchising is a way of growing a business without the business owner investing in new outlets or business units. Instead the business owner or franchisor increases their brand presence by licensing to franchisees the right to operate a business or distribute goods or services for a specific period. In return, the franchisees pay the franchisor a fee. That might be an initial payment, it may be an ongoing cost (either a flat rate of a percentage of turnover), it can be a mix of the two. Some franchisors make their money through the sales of essential items to the franchisee. The

franchisor

provides

existing

Investing in any business is a risk, and franchising is no different. However the sector is regulated by the Franchising Code of Conduct, which is administered by the ACCC. This means there is some legal protection for franchisees. As part of the research and buying process, a franchisor must provide an information statement and a disclosure document to the franchisee. If the franchisee decides to go ahead with the business investment, they will sign a franchise agreement, a legal contract between the franchisor and franchisee, which outlines the obligations. Franchisees are entitled to a seven day cooling-off period.

At the end of the agreed period, the franchisee may have the opportunity to renew the franchise agreement for a further term.

WHAT DOES IT TAKE TO BE A SUCCESSFUL FRANCHISEE? ✱ Commitment ✱ Passion ✱ Resources ✱ Hard work ✱ Compliance

WHAT MAKES A GOOD FRANCHISE? ✱ A proven system ✱ Training ✱ Business support ✱ Marketing ✱ Operations manuals ✱ A positive, collaborative culture ✱ A shared vision ✱ Profitability Franchising works when everyone in the partnership is making a profit.

NOV/DEC 2015 | 22 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_000_CHEE

2015-10-26T10:33:43+11:00

Love your work! Make it a reality with The Cheesecake Shop.

Many people just dream about doing a job they love. Why not make those dreams come true by owning a franchise in The Cheesecake Shop. You can be your own boss! Bake tasty masterpieces all for the world to enjoy! And most of all you can enjoy your days working with those you love.

cheesecake.com.au/franchise

FR1115_000_EGN

2015-11-06T10:28:28+11:00

Egnatium is in the Business of Growing Businesses

SHORTEN THE TIME TO YOUR SUCCESS WITH WORLDâ&#x20AC;&#x2122;S FASTEST FRANCHISE SYSTEM

Strategy Management Competency Management Appraisal Management Learning Management Experience Management Take your own experience and business skills to the next level by becoming a one- stop shop for businesses looking fro sustainable growth.

Egnatium Franchisee Advantage: - Short lead time to get started with your franchise. It takes 30 days working days to get started with your Egnatium franchise business. - End-to-End Support Egnatium provides sales, marketing and operations support by providing continuous prospecting leads. - Simplify your business by only hiring one employee to help you in your business. - Increase your Return on Effort (ROE), as 50% of your revenue will be generated from software subscription. - Reduce your operating expenses with no inventory and you can work from home or YLUWXDO RIĂ&#x20AC;FH

CALL NOW TO GET A FREE FRANCHISE REPORT (07 3036 1152) +61 07 3036 1152

FR1115_025

2015-11-09T09:01:43+11:00

FIND YOUR

t’s what typical entrepreneurial dreams are made up of – identifying a niche market opportunity in an industry that you’re familiar with and starting a business as a result, writes Nathan Stanogias.

niche

The potential seems endless (and it probably is) but does that mean your market gap identification is profitable and sustainable? Not necessarily. It’s important to remember that as you explore your entrepreneurial prospects that many of today’s successful businesses were once considered niche but with expansion and meeting market demands they transformed into a mainstream system.

Sustaining a business that operates in a niche market can be difficult but it isn’t impossible. External factors – customer desires, market trends, economic shifts – all can impact your business, which will lead to business model revisions and adjustments. This is normal, expected practice and if you buy into a niche franchise business there are a few key points to consider.

NOV/DEC 2015 | 25 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_026

2015-11-09T09:01:43+11:00

Small business owners find that being recognised as a specialist, building a solid brand value and creating a unique customer experience are catalysts for success

WHAT EXACTLY IS A NICHE BUSINESS? Well, let’s begin with pulling apart the term “niche”. A niche is a small space – in a business sense it refers to a distinct, specific segment of a market. You’re not going after the whole market, in this regard, just a particular part of it. Whether you operate a stationary business or a mobile coffee van, small business owners find that being recognized as a specialist, building a solid brand value and creating a unique customer experience are catalysts of success for niche business operators.

IS YOUR NICHE BUSINESS ORIGINAL OR JUST NEW TO A MARKET? If the business you’re considering buying is truly, undoubtedly unique that’s targeting an untapped market the success potential is certainly high. But so is the risk factor, too. You need to do your research on the market and speak to professionals on the ground and your business’s target audience. What if you find out that a particular trend yet to surface will affect the success of your niche business? It’s things like this that help to shape your understanding on the sustainability of the business and, of course, if it is worth committing to in the long term.

THINK ABOUT YOUR PASSION While it’s great to talk about capitalising on a niche opportunity are you even passionate about the work you’re going to

do? If the answer is no, you should take more time to research businesses so you can find the right business that aligns with your personal needs and feeds your passion. Sooner rather than later you will regret the decision of joining (and buying) the business, your customers will see the resentment in your work and it will all be too late to reverse your move. So remember: take your time, find your passion and don’t be afraid to explore the things that can go wrong. Buying a business is a big decision – make it count.

HAVE A LOOK AT THE MARKET: WHAT IS EVERYONE DOING? There is so much information at our finger tips today. But if you treat the internet, for example, as a meritocracy then you’ll target all of the relevant information you need to satisfy your research and avoid all of the nonsense. Google every single detail you want to know about, do some reading on the industry’s news, seek out analysis, read a professional blog or subscribe to a YouTube channel. Do whatever it is that you need to in your research phase so you quickly become knowledgeable in the field across all bases. What else can be done other than reading around? Give existing franchisees a ring and ask them questions you want to hear answers to. If you can get a good grasp on what the industry is doing now, what it’s going to be doing in the next year and where it might be in five years, you’ll be in sound shape to make a judgment call.

NOV/DEC 2015 | 26 | WWW.FRANCHISEBUSINESS.COM.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

FR1115_028

2015-11-10T08:31:18+11:00

NOV/DEC 2015 | 28 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_029

2015-11-10T08:31:18+11:00

HOW FAR AWAY

IS TOO CLOSE?

BY PETER BUCKINGHAM Peter Buckingham is the managing director of Spectrum Analysis Australia Pty Ltd, a geodemographic and sales prediction modelling company. He worked for Caltex for 20 years in many areas including site selection process.

hen you are about to buy a franchise you must look at the competition both from other companies, and from the franchise brand, and ask what is a reasonable distance between stores?

Competitors are normally not a great problem, and in fact, as in the case of homemaker centres and certain types of shopping centres or shopping strips, neighbouring competition can actually be an advantage.

NOV/DEC 2015 | 29 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_030

2015-11-10T08:31:18+11:00

This is what we call “clustering”. Name a reasonably sized homemaker centre/precinct, and count the bed stores, furniture outlets and electrical retailers. Experience has shown that these retail outlets actually work best together, as the combined drawing power of the homemaker centre far outweighs the advantage of being out on their own. Over the years we have called this “friend and foe”. In many businesses – including quick service restaurants and direct factory outlets – being with others makes for a precinct, and therefore is an advantage (friend). Being out on your own makes everyone else a foe. That works well for competitive brands but you obviously want minimal competition from your own franchise that will negate any brand advantage you may have over the opposition. In the fuel industry, it is accepted that 75 percent of the sales for a new site will come from other sites in a 3km radius – the balance being the transient volume that moves just because they need fuel at the time. In businesses like Lottery sales, the 75 percent of business came from sales within 2kms, and when you look at the concentration of Lottery agencies, you see that they compete with each other on a very regular basis. Many franchise chains have market needs similar to the beds, furniture and other homemaker retailers, and the relevant travel distance is far larger than those mentioned above. So how can we deduce what is fair and reasonable? The problem is one where a potential franchisee wants half of Australia as a preferred marketing area (PMA), and the franchisor is trying to rationalise this to make an acceptable PMA which will allow a reasonable number of stores within each market. So how do we use data and analysis to find an answer?

CUSTOMER MAPPING The first thing we suggest when the issue is raised is to ask for and map the customer database. Once we have this mapped, our analysis involves looking at what radius we need to go out from the store to enclose 60 percent and 80 percent of the customers. Our view is a reasonable measure of the PMA is somewhere in between. In many cases we are asked to map the customer database of 10 or 20 stores, and come to a realistic conclusion as to what is a reasonable PMA in: 1. High density areas – normally more than 100,000 people in a 3km radius eg Bondi, Mosman/Neutral Bay (Sydney), Elwood,

South Yarra, Richmond (Vic) 2. Middle Suburbia – normally a population density of about 60,000-80,000 individuals in a 3km radius. For instance, the middle suburbs of Melbourne and Sydney, anywhere in Adelaide/Perth, and most of Brisbane 3. Outer Metro areas – normally with a population of fewer than 40,000 people in 3kms; outer metro growth areas such as Cranbourne, Doreen, Kellyville, Albion Park, Helensvale. Often this type of process for many brands may look like: Area

60% customer radius

80% customer radius

Suggested PMA radius

Inner

3km

5km

4km

Middle

4km

8km

6km

Outer

6km

10km

8km

So if we think of two adjoining sites, we normally accept the two suggested PMAs can overlap somewhat. In the inner area, we would probably be looking at separating sites about 5-7kms away from each other, sites in middle areas should be about 8-10kms apart, and outer metro locations at a distance of about 12-14kms. If you think in terms of a large market like Sydney (Newcastle to Wollongong), this will probably generate about 40 locations, for Melbourne/Geelong close to 32, and Brisbane/Sunshine and Gold Coast around 20. The reality is most franchisees fear other branded sites from within the network far too much. History has shown me that when another store opens within a few kilometres, this can be a franchisee excuse that the sky is falling, and their expectations of 50 percent loss of business in reality may only be 10 percent (which is still not great). In fact we look at sales of clients before and after a new store opens, and sometimes we are amazed that actually the new store opens, and the existing nearby store increases sales as well. Maybe this is because the market presence of two stores, which brings more advertising and action within the brand, outweighs the cannibalisation issue? My view is it is really the franchisor’s responsibility to have some logic to answer the potential franchisee’s concern.

SUMMARY Facts and data can answer these common questions, and if you are being told the cannibalisation effect will be zero or very small, ask the franchisor for the logic behind this argument, and do not just accept a “wet finger in the air” opinion.

NOV/DEC 2015 | 30 | WWW.FRANCHISEBUSINESS.COM.AU

FR0915_000_DOM

JOIN AU

2015-09-09T14:14:46+10:00

JOIN AUSTRALIAâ&#x20AC;&#x2122;S #1 PIZZA brand A proven brand with over 564 locations Australia wide. Almost double our nearest competitor.*

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

Ongoing training and support for franchisees and their teams. State of the art digital store management tools in the hands of every franchisee.

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

*Dominoâ&#x20AC;&#x2122;s store count 564, Pizza Hut store count 302 as at June 2015. Source GapMaps Pizza Sector Report June 2015.

LIMITED FRANCHISE OPPORTUNITIES AVAILABLE, GRAB YOUR SLICE NOW! Call 1300 131 888 or visit: dominos.com.au/franchising

FR1115_032

2015-11-09T15:16:15+11:00

How secure is your

FRANCHISE TERRITORY?

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

n many franchise systems franchisees are restricted to a particular location. However, in some franchise systems franchisees are offered either an exclusive territory or an exclusive marketing area. Both of these provide a level of protection from competition within the franchise network.

Exclusive territory means that no other franchisee or the franchisor, apart from exceptions below, can operate within such territory. Exclusive marketing area does not prohibit other franchisees from servicing customers in a particular territory but it does stop them from marketing to customers in that territory. Franchisees must understand the difference between the two and how it affects them. Even if an exclusive territory is offered,

there are various scenarios when either the franchisor or other franchisees can service customers within such territory.

A PERFORMANCE BREACH Breach of the minimum performance requirements within the franchise agreement: most franchise agreements will contain a provision that if the franchisee does not reach the minimum performance criteria listed in the franchise agreement

NOV/DEC 2015 | 32 | WWW.FRANCHISEBUSINESS.COM.AU

FR1113_000_SUB

2013-09-19T14:58:54+10:00

FR1115_034

2015-11-09T15:16:15+11:00

and the meeting(s) with the franchisee and any subsequent training offered does not result in the franchisee reaching the minimum performance criteria, then the franchisor may do one of the following: ✱ Reduce the franchisee’s territory ✱ Remove the exclusivity attached to the territory ✱ Terminate the franchise agreement (in the worst case). All potential franchisees are highly recommended to review any minimum performance criteria contained in the proposed franchise agreement, to assess how realistic it is to achieve it and to discuss any amendments required with the franchisor before signing on the dotted line.

ONLINE SALES BY THE FRANCHISOR These days no brand exists without a website and online presence. It does not, in itself, mean that the franchisor sells goods or services online. However, during the due diligence review of the franchisor’s system potential franchisees must discover whether the franchisor sells online, as such sales may compete within their territory or marketing area. Amendments to the Franchising Code of Conduct, which came into effect from 1 January 2015, introduced a new section into the disclosure document, in which franchisors must disclose certain information regarding their online activities. Potential franchisees must assess this section carefully to understand whether the franchisor operates in competition with them or whether the website and

other online activities are only used to promote brand awareness. The franchise agreement should also outline how the franchisor’s online presence affects the franchisee’s territory.

INABILITY TO SERVICE CUSTOMERS In the event that the franchisee is unable to service a customer within their territory for any reason, there is often an option in the franchise agreement for the franchisor to either send the customer to another franchisee or to service them directly by the head office. Before entering into a franchise agreement, potential franchisees need to consider the following: Are they offered a territory? If so, is it exclusive? ✱ Is exclusivity only in relation to marketing? ✱ If the territory is exclusive, is there a prohibition from seeking and accepting business from customers outside the designated territory? ✱ Are there any minimum performance requirements contained in the franchise agreement? If so, how realistic are they to achieve? ✱ What plans does the franchisor have for the adjacent territories? Once the answers to the above are obtained and the potential franchisee will be able to understand exactly what is on offer in relation to the territory and in which circumstances exclusivity may be lost. NOV/DEC 2015 | 34 | WWW.FRANCHISEBUSINESS.COM.AU

Potential franchisees must discover whether the franchisor sells online, as such sales may compete within their territory or marketing area

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

FR1115_036

2015-11-09T09:12:18+11:00

SUPPLY&

DEMAND

BY BIANCA SEVASTOS, BAYBRIDGE LAWYERS Bianca Sevastos is a partner at Baybridge Lawyers where she specialises in franchising and licensing. Bianca advises on all aspects of franchising industry compliance with the Code, day-to-day management of franchise systems and relationships with suppliers and franchisees.

NOV/DEC 2015 | 36 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_037

2015-11-09T09:12:18+11:00

hen you buy a franchise, are you legally bound to use the franchisor’s recommended supplier or services?

The process of starting a franchised business can be fraught with challenges. Franchisees have to consider many commercial risks before they decide to purchase a franchised business. These can include: ✱ What fees will the franchisor charge me before the business commences its operation? ✱ What will be charged during the term? ✱ Is there a marketing fund and what are its contribution costs? ✱ What other start-up and operational fees and expenses will I face?

THE USE OF PREFERRED SUPPLIERS One commercial risk that must be given proper attention prior to signing the franchise agreement is whether the franchisor requires its franchisees to use preferred suppliers from whom franchisees must purchase goods and services for the operation of the business. For example, a franchisee who operates a takeaway restaurant may be forced by the franchisor to use certain companies for the supply of food, beverages and ingredients used in the restaurant. Franchisors may require their franchisees to use preferred suppliers in their franchise network for various reasons: ✱ It allows the franchisor to set specific quality requirements throughout the network and permits individual franchisees to only source goods and services from any suppliers that satisfy those requirements ✱ It may result in financial incentives for the franchisor as they may receive rebates from the suppliers. The Franchising Code of Conduct requires franchisors to disclose whether they receive rebates, the name of the business providing the rebate and whether a rebate is shared with the franchisees ✱ Finally, having full control of the product range and consistency when the franchisor or its related entities is also the supplier

REVIEW THE FRANCHISE AGREEMENT AND DISCLOSURE DOCUMENT We recommend that franchisees thoroughly review the franchise agreement NOV/DEC 2015 | 37 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_038

2015-11-09T09:12:18+11:00

and disclosure document before entering into the franchise relationship with the franchisor to satisfy themselves about any franchisorâ&#x20AC;&#x2122;s preferred supplier requirements and to see whether the franchisor receives any rebates and whether these rebates are shared with the franchisees.

The franchisor may be able to negotiate competitive price arrangements with its suppliers in return for support and sales from the network

It is important to note that a franchisee must comply with the obligation to buy goods and services from preferred suppliers if the franchise agreement and disclosure document contain terms and conditions to that effect. If the franchisee breaches such obligation, the consequences could be severe as the franchisor may terminate the franchise agreement or may commence legal action against the franchisee for loss or damages sustained by the franchisor.

DETRIMENTS OF USING PREFERRED SUPPLIERS Franchisees sometimes view their mandatory supplier arrangements as detrimental to their franchised business as they can result in relatively higher costs for franchisees to buy goods or services. This is primarily so if the franchisor is not

successful in negotiating commercially competitive supply arrangements with its suppliers, in which case it is likely that franchisees will be facing higher costs than usual in running their franchised business. Although at face value this may seem to be the case, most suppliers that can supply at competitive levels would not be in a position to supply all year round consistent products to the entire network. These are the considerations factored in by the franchisor. A franchisor which forces its franchisees to buy goods or services from a particular supplier only may be engaging in â&#x20AC;&#x153;third line forcingâ&#x20AC;?. Third line forcing involves the arrangement where a franchisor supplies franchising services to its franchisees on the condition that they must buy goods or services from a preferred supplier. Generally, third line forcing is not permitted and may result in legal action from the ACCC. However, it is important to note that a franchisor may request the ACCC for an exemption whereby the franchisor is permitted to require its franchisees to use preferred suppliers only.

NOV/DEC 2015 | 38 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_039

2015-11-09T09:12:18+11:00

BENEFITS OF USING PREFERRED SUPPLIERS There may also be benefits to franchisees for using the franchisorâ&#x20AC;&#x2122;s preferred suppliers. For instance, the franchisor may be able to negotiate competitive price arrangements with its suppliers in return for support and sales from the network. Additionally, a franchisor may receive rebates from preferred suppliers which it will share with its franchisees, although franchisors are not legally obliged to disclose the value of rebates received or to share such rebates with franchisees. A central negotiation point also allows the network to operate efficiently and can alleviate complaints when dealing with multiple smaller suppliers.

RECOMMENDATIONS Franchisees should thoroughly review the franchise agreement and disclosure document before entering into the franchise relationship to see whether their franchisor requires goods and services to be sourced from preferred suppliers only.

If the franchise agreement and disclosure document state that such preferred suppliers must be used, it is important to ask the franchisor for specific details around these arrangements. If these arrangements are not satisfactory, it may be worthwhile to negotiate alternative arrangements with the franchisor whereby the franchisee is permitted to source goods or services from different suppliers or, alternatively, conceding to the franchisorâ&#x20AC;&#x2122;s supply arrangements subject to certain conditions being fulfilled. Additionally, franchisees should ask their franchisors about the rebates sharing arrangements from which they might benefit if they buy goods or services from approval suppliers. Preferred suppliers are used in many franchise networks and it is important for franchisees to ask the right questions and negotiate the appropriate arrangements prior to signing the franchise agreement. Accordingly, it is crucial that potential franchisees seek the right legal, accounting and business advice before they enter into their franchise agreement.

NOV/DEC 2015 | 39 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_040

2015-11-09T18:07:31+11:00

How can franchisees

make money? S

o you’ve decided that you want to buy a franchise. You’ve done a few Google searches, read a few magazines or blog posts and now you want in, writes Nathan Stanogias.

At this stage you have shortlisted a few potential suitors and you’ve zeroed in on their requirements: you know what uniform you might need to wear, how many hours you’re expected to work and the usual locations of the franchises. In spite of all this preparation and due-diligence you have done you still don’t know the answer to the most pressing

KNOW YOURSELF AND SEEK EXPERT ADVICE

should be run past experts for their advice and professional opinion.

question of all: will your franchise business make money? No franchise business, no matter how glorious or prosperous its track record might be, can offer guaranteed financial success.

Because a franchisor can’t guarantee financial success you need to choose a franchise that suits your skillset best – this is the most important point when pondering your potential franchise success. You will not, under any circumstances, make money in a business that you don’t like or lack the skillset in just because it’s – quote un-quote – successful.

“There are many elements for potential franchisees to evaluate when buying a franchise business. They should assess the financials and prepare a business plan, consider location of the business and how other similar businesses are performing in the area as well as the strength of the franchise network.

But there are things to consider and pay close attention to when buying a franchise as a new franchisee or as an existing franchisee before you sign on the dotted line.

National head of Mills Oakley Lawyers franchising team Warren Scott says that there are many things potential franchisees should consider when in the buying phase that

“The franchise agreement and lease (if there is a premises) are important long term agreements that need to be carefully reviewed with expert advice. Fit-out and refurbishment ob-

NOV/DEC 2015 | 40 | WWW.FRANCHISEBUSINESS.COM.AU

FR0915_000_YUM

2015-08-19T15:51:14+10:00

FR1115_042

2015-11-09T18:07:31+11:00

ligations can be particularly expensive so particular attention should be paid to these,” Scott says.

EVALUATE RISK In order to make money as a franchisee – or to put yourself in the best position to do so – you need to evaluate all potential risks associated with the franchise business. Doing research and risk assessing goes far beyond reading company PR, website copy and driving past the local success story. Potential franchisees are urged to familiarise themselves with all sorts of information that outlines the track record of the business, which requires some digging and thorough research. “In my opinion, well-established and large franchise networks afford the best opportunity for franchisees to obtain a large sample of historical data about how the business has performed over multiple locations. While this is no guarantee of performance of any particular fran-chise in a particular location in the future, the access to that information can provide some comfort to franchisees in developing their business plan for the business they plan to purchase,” Scott says. In

many

situations

where

there’s risk there’s reward, and the two are usually found together. It’s up to the franchisee to choose the best business (and personal) scenario for their financial prosperity because there is only so much a franchisor can do to help ignite success. “Often the best opportunities to maximise financial performance come with taking additional risk. New, small or growing franchise networks have many stories of those getting in early being the ones to profit most,” Scott says.

DO HOMEWORK AND PAY ATTENTION TO THE BUSINESS SIDE OF THINGS Generally, franchisees will be happy if they’re financially successful but money isn’t everything. It’s key for franchisees to align their skillset with their passion, otherwise success will be hard to come by. Business acumen is key – without question. Director of the Franchise Advisory Centre Jason Gehrke says that franchisees should be looking at the capacity of a franchise business’s cash flow and potential future cash flow. It’s not a matter of seeing and believing a franchise’s success, rather a matter of doing due diligence and making sense of the numbers yourself to ensure

it’s a business worth buying. “Franchisees should be looking at the business capacity to generate cash – and future cash flows. This will have a significant impact on the amount of working capital required. If a franchisee goes into small business without enough working capital they are at great risk of compromising their future success, struggling or failing very early,” Gehrke says.

THOROUGH DUE-DILIGENCE CAN’T BE STRESSED ENOUGH Gehrke explains that potential franchisees or current franchisees – who are looking to buy or expand their business portfolio – should do thorough due diligence. But what constitutes as thorough, and what steps should be taken? There are a few points that are not to be avoided, he suggests. “The obvious thing franchisees miss is feedback from current franchisees but a less obvious one is the proportion of existing outlets in the network which are currently up for sale. If there is a high proportion, in excess of 15-20 percent, that does indicate concerns within the profitability of the model or dissatisfaction of franchisees,” Gehrke says. Making more money as a fran-

NOV/DEC 2015 | 42 | WWW.FRANCHISEBUSINESS.COM.AU

chisee isn’t an easy task, but it’s achievable if franchisees do their homework and have business acumen. Financial success in business doesn’t just merely happen – money needs to come in and the money that leaves can’t out-weigh profits. “Go and spend some time working in a franchise to see what the lifestyle is in operating a franchise, which is fully consistent with the business. Spend an hour of your time undertaking in due diligence if you’re spending $1000 – that is my advice to potential franchisees. "If you’re investing $100,000 you should invest 100 hours in due diligence. “People often have misconceptions about how to make money out of business; it is very, very simple because there are only two ways: profits on the way through and capital gain on the way out. It is very simple. “Of those two things the only one that franchisee can really influence is the profits on the way through. Capital gain is dependent on external factors, profitability however, is more capable of being influenced by the franchisee. Focus on being profitable from early as possible,” Gehrke says.

FR0915_000_DRE

2015-08-10T09:24:35+10:00

Is this your Dream Job?

“It’s a proven model ... the returns have exceeded my expectations and I’m really enjoying the work” Brady Morris - Dream Doors Franchisee Sydney Northern Beaches

✓Be your own boss ✓Earn great money ✓Provide a great service Join one of Australia’s fastest growing franchises, with a proven model and comprehensive support every step of the way. Since launching in Sydney in March 2014, Dream Doors has already achieved spectacular success, with local franchises popping up all over the country. Proven results. Delighted customers. The unique Dream Doors ‘facelift’ concept makes it possible for Aussies to achieve a ‘new’ kitchen for a fraction of the usual cost - by replacing doors, drawer fronts and benchtops. The market response has already been extremely positive, with some Dream Doors operators exceeding $400k gross profit in their first year. Join a supportive network. From just $75,000 + GST + operating costs, you can join a highly successful business with over 73 franchises worldwide. With more than 14 years of international experience, we make everything easy – so you don’t need any previous experience to get up and running.

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

FR1115_044

2015-11-09T18:07:31+11:00

How long is A FRANCHISE TERM?

franchise term granted under the specific franchise agreement does not last forever; it will vary from one franchise system to another, according to the Franchise Council of Australia (FCA), the peak body for franchising in Australia.

But generally, most franchisees are granted about three to five years in the position with an option to renew for an agreed period. Things such as a payment of a renewal fee and an obligation to refurbish the business at the request of the franchisor are likely to be part of contractual obligations. A franchise agreement should be long enough to enable the franchisee to recover their monetary investment and repay loans associating with the initial purchase of

the franchise. This means that a franchise agreement can’t be – for example – a threemonth period,which doesn’t allow for the franchisee to effectively pay back loans. Most notably, a franchise agreement has to be fair and offer enough time for the franchisee to make money. There are occasions when a franchisee decides to exit the business before the end of the term they have signed up for. This means that if they decide to leave a franchise business, individual franchisees can sell up during the franchise term. But this isn’t an easy process so it’s important for franchisees to understand the finer points in their franchise agreement. Before going ahead with the sale of a franchise, franchisees need to ensure they contact their franchisor to have a discussion about the right steps to take. Above all, franchisees need to read their franchise agreement and high-light each and every step to be made to do the procedure

correctly (and legally). Seeking expert help is imperative because without it, it can be difficult to make sense of how to legally go through the procedure. But what happens, on the contrary, when a franchisee opts to renew their franchise agreement? In this case the franchisor is required to provide disclosure information which franchisees should seek legal advice on, especially if there are amendments to the franchise agreement that’s up for renewal. What else is there to consider in a franchise term? The term of the franchise may also be subject to lease specifications such as the term of the lease itself. Franchising lawyers have for long noted that an ideal franchise agreement should coincide with the term of the lease and any off-shooting options that are within the lease agreement. In all instances sound due diligence is required to fully understand the details of the franchising term.

NOV/DEC 2015 | 44 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_000_OPO

2015-09-10T15:51:49+10:00

++o t t n a __w

spice up yOur career? become an OPORTO franchisee! Serving delicious mouth-watering grilled Portuguese chicken and burgers since 1986, Oporto is a 100% Aussie-owned network with over 140 great locations within Australia and New Zealand.

With an average of 15 new stores opening every year, Oporto are looking

for people who are passionate about serving amazing food, providing exceptional service and are hungry for success! Does this sound like you? Yes? Then we want to hear from you, apply now to be a part of the amazing, progressive and dynamic Oporto team.

oporto.com.au/franchising

Bangers & Tash Pty Ltd. studio@bangersandtash.com.au

Contact: Client:

Jo Dickison Oporto

VERSION

Specials

Trim Size: 205mm (w) X 275mm (h) Visual Area: â&#x20AC;&#x201C;

FR1115_046

2015-11-09T09:19:18+11:00

What happens if I want to

LEAVE MY FRANCHISE

E ARLY? BY PRUE GREENFIELD Prue is senior associate, dispute resolution and insolvency, at M+K Lawyers. She has a wide range of experience in commercial litigation disputes and specialises in franchising matters, advising both franchisors and franchisees as to their rights and obligations.

he simple answer is franchisees are required to complete the term of their franchise agreements, however, there are some options to consider.

There are a number of reasons why a franchisee may wish to leave their franchise early including a change of direction, financial reasons or receiving an offer for the purchase of the business. It is importNOV/DEC 2015 | 46 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_047

2015-11-09T09:19:18+11:00

ant to consider your rights and obligations as a franchisee so you can make an informed decision. Your rights and obligations as a franchisee are governed by both your franchise agreement and the Franchising Code of Conduct known as the Competition and Consumer (Industry Codes-Franchising) Regulation 2014. This is a new franchising code that includes the right of the Australian Securities and Investments Commission (ASIC), to impose both civil pecuniary penalties

and issue infringement notices for particular breaches of the Code.

RIGHTS OF TERMINATION BY FRANCHISEE It is highly unusual for a franchise agreement to allow a franchisee to term-inate their agreement before the end of the term. Most franchise agreements are for a defined period of say five to 10 years with an option to renew for a further five to 10 years. The only right of termination a franchisee has under the Code is within seven NOV/DEC 2015 | 47 | WWW.FRANCHISEBUSINESS.COM.AU

days of either entering into the franchise agreement or making a payment under the agreement, whichever occurs first. This does not apply to a transfer or renewal of the franchise agreement.

LIABILITY TO THE FRANCHISOR FOR THE REMAINDER OF THE TERM In some instances, a franchisor may agree to allow you to leave your franchise early if you agree to pay an exit fee. This is usually based on the franchise

FR1115_048

2015-11-09T09:19:18+11:00

fees that would have been payable for the remainder of the term of the franchise agreement. A franchisor will usually require this to be paid as this covers the fees that they would otherwise have received, had the franchisee completed the full term of the franchise agreement. Your franchisor may also negotiate on a lesser sum depending on their policies. This is not an option that can be taken lightly and so if this is a path that you are considering it is important to properly communicate with your franchisor. Failure to do so may result in legal proceedings being issued and a damages claim being made against you.

TRANSFER OF FRANCHISE AGREEMENT

Many franchise agreements will offer the right of first refusal to the franchisor, which means that even if you have an interested buyer, you must first offer the business to the franchisor for the same amount that you have been offered

It may be that you have an interested buyer for your franchised business but remember, usually the franchise agreement sets out the process and the Code also imposes certain requirements. Many franchise agreements will offer the right of first refusal to the franchisor, which means that even if you have an interested buyer, you must first offer the business to the franchisor for the same amount that you have been offered by the interested buyer. The franchisor can then either take up this offer or provide their consent to the transfer of the business. This consent will be subject to a number of conditions including, but not limited to, that the proposed transferee is able to meet the financial obligations of the franchise and the selection criteria of the franchisor. There may also be a transfer fee that will be required to be paid by the franchisee. There is a strict process to be followed both under the Code and most franchise agreements and therefore legal advice should be sought before starting this process.

OBLIGATIONS UPON TERMINATION, EXPIRY OR TRANSFER A franchisee is subject to certain obligations upon termination, expiry or transfer of an agreement, some of which will continue. These obligations are designed to protect the franchisor’s goodwill. RESTRAINT OF TRADE An important provision to be aware of is that your franchise agreement may impose a restraint of trade on you which prohibits

you being involved in a competitive business for a certain period following the termination of your agreement, and within a certain area, which is usually the territory outlined in the franchise agreement. This is highly relevant to a transfer of the business which must be a transfer of the franchised business and cannot involve the sale of the business to a competitor. The relevant period of restraint of trade will usually also apply to franchisees once they have reached the end of a franchise agreement. RETURN OF FRANCHISOR’S CONFIDENTIAL INFORMATION Once an agreement has been terminated, has expired or transferred it is likely you will be required to return or delete all copies of the franchisor’s confidential information which can include customer lists and operating manuals. CEASING TO USE THE FRANCHISORS TRADEMARK AND SIGNAGE It is important to remember that your agreement will almost always require you to remove all of the franchisor’s trademark and signage. Failure to do so will likely result in a breach of the franchise agreement. EXERCISE OF OPTION TO PURCHASE ASSETS It may be that the franchise agreement will allow the franchisor to purchase the assets of the business; the price payable for these assets will usually be the fair market value. This can also include taking over the lease. Some franchise agreements also give the franchisor the first option to take over the lease. This option often allows the franchisor to either take over the management of the store or require the franchisee to close the store. There is usually a strict process to be followed so it’s wise to seek legal advice if the franchisor elects to do this. WHAT DO I DO NOW? The first step is to consider the reasons for wanting to leave your franchise early, then identify the options available to you. Above all, it is recommended that you seek legal advice. Due to the strict requirements of both the Code and almost all franchise agreements, together with the new penalty provisions, it is important to ensure you comply with your obligations to your franchisor.

NOV/DEC 2015 | 48 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_000_FCC

2015-11-09T11:21:55+11:00

Looking for a franchise that offers endless opportunity? Do you aspire to run your own business?

As a sales person are you ready to truly reap the rewards of your efforts?

Looking for a business opportunity in a rapidly growing market?

If this sounds like you then you should be First Class Capital’s next Franchise Partner.

First Class Capital is one of Australia’s most innovative lenders, specialising in the delivery of trade ﬁnance and working capital solutions to small business. We are on the lookout for business savvy sales professionals to join our already established national network of Franchise Partners to build their own successful business in the lucrative trade ﬁnance sector.

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

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

FR1115_050

2015-11-09T09:19:18+11:00

What other franchisees will tell you

ant to know what you should consider before you buy a franchise? Who better to ask than another franchisee? At the Franchising & Business Opportunities Expo in Melbourne, franchise buyers had that opportunity when franchisees from a wide variety of brands and business sectors participated in daily panel sessions.

and building wealth. Understanding your real drivers is an important step in finding the right business model to invest in. But, suggests Gutter-Vac franchisee Paul Reinsch, “be very careful if you just buy for money, there is lifestyle to consider too”. Reinsch moved from a long term IT role in the corporate world to take up a better lifestyle, working part time with his wife in the hands-on Gutter-Vac business.

TRY BEFORE YOU BUY DO YOUR RESEARCH Every franchisee on the panel sessions was adamant that proper research is essential before you buy a franchise. And the research includes looking deeply into the chosen brands, getting legal and accounting advice and speaking to franchisees in the network. Kelly Marshall, a franchisee with First Class Accounts, says “I spoke to the three franchisees the franchisor recommended, but then I contacted another franchisee at random, to ensure I wasn’t just getting the views the franchisor wanted me to hear.” Ju Li knew he wanted to get into the courier business; he spent 10 years in hospitality before becoming a franchisee just a few months ago, and was keen to find an option that gave him more time with his young family. Li tracked the progress of Fastway Couriers for three years before committing to a franchise.

BE CAREFUL YOU BUY FOR THE RIGHT REASONS Common reasons for wanting to buy a franchise include achieving a better lifestyle, meeting the challenge of business ownership,

Ju Li took up the opportunity to ride with a Fastway Courier franchisee for a day to get a better feel for the daily demands of the role – the volume of work and the speed required to deliver top quality customer service. “You have to be familiar with the franchise,” he suggests.

CHECK YOUR NUMBERS Paul Reinsch recommends franchisees who are buying either a brand new territory or a greenfield site look carefully at any suggested turnover figures proposed by the franchisor. There is no trading history to review, so it’s important to consider how achievable these numbers might be. Get your accountant on board to check what will really work and speak to other franchisees in similar sites.

LOOK FOR A BUSINESS WITH POTENTIAL Silvio Del Vecchio swapped his corporate banking career for a Laser Clinics Australia franchise. Now the former banker has expanded to a second clinic. He picked the sector because of its growth potential. “I investigated the market and we haven’t even scratched the surface here,” he explains

NOV/DEC 2015 | 50 | WWW.FRANCHISEBUSINESS.COM.AU

FR0915_000_SUM_r

2015-09-14T10:33:34+10:00

FR1115_052

2015-11-09T15:09:41+11:00

Will you put YOUR HOME on the line?

ou want to buy a franchise but how will you finance the purchase price and start-up costs? Check these seven steps before you decide whether or not to mortgage your home for your business venture.

When you first took out your home loan it might have been a stretch to make the repayments but if your wages have risen the mortgage consumes less of your

income, even when the interest rates rise. There might be an occasional repair bill but from the outset most people have a clear idea where they stand financially. But starting a business means greater monetary uncertainty. Kate Groom, co-founder of SmartFranchise, says "For instance, the start-up costs tend to vary (even in a franchise), first year sales are quite likely to be different from your initial plan, and the costs of running the business may prove to be higher (or lower). On top of that, your personal

financial needs may change. "Of course dealing with uncertainty and risk is part of being in business. But the prudent business owner will seek to identify and manage financial risk." As Simon Ovenden, national manager, franchise banking at NAB, explains, using a property to help fund a business loan is common. â&#x20AC;&#x153;You will need equity behind you to get funding and mostly for Australian householders this is equity will be wrapped up

NOV/DEC 2015 | 52 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_053

2015-11-09T15:09:41+11:00

in your home and it is possible to use this equity to support a business loan. The ideal situation though would be where the applicant has the majority of their equity in cash as this reduces the debt burden on the business. “Some franchise brands (mostly those large and long term brands) have bank accreditations where the bank is reasonably comfortable with the risk profile of the particular brand and may not require fully supported (usually by using your home or other property) loans and rely more on the going concern value of the business.”

A good rule of thumb for buyers of franchise businesses is to aim for at least 50 percent of the total investment (including all hard and soft costs) in equity. “For example, if you need $500,000 to open for business, you should have $250,000 to put up: that could be $100,000 in cash, and $150,000 in equity,” Ovenden says. In terms of the calculation of the amount of equity in your home, a bank would ordinarily use the difference between 80 percent of the market value of the property and the amount of debt already

outstanding. So a million dollar property with an outstanding loan of $500,000 would equate to clear equity of $300,000 (80 percent of $1m minus $500,000) he explains. So should you consider risking your residence for the new business?

7 STEPS TO TAKE FIRST 1. CALCULATE YOUR NET WORTH Add up your assets, subtract your debts and you have your net worth.

NOV/DEC 2015 | 53 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_054

2015-11-10T16:46:07+11:00

2. GET A COPY OF YOUR CREDIT RATING Your credit rating will show whether or not financial institutions view you as a good risk. Financial institutions will do background credit checks, and it's really hard to hide poor credit. 3. EVALUATE YOUR CIRCUMSTANCES

It isn't just the purchase price you need to fund; costs can include legal fees, equipment, plant or fitout costs

Should you use cash to pay off other debts rather than borrow to purchase the franchise? This can include credit cards, student loans, store cards, personal loans and any other payment plans. If you can clear all other debts then this may be more attractive to a financier. 4. CONSIDER ASSET PROTECTION ISSUES Your home is probably your single biggest asset but there are risks to using it as security for a loan so ensure you understand these and make an informed decision.

assets? Many would-be franchisees turn to family members for a loan when they're raising money for a business - and this arrangement can have significant benefits on both sides. A lower interest rate, fewer add-on costs, and a more flexible approach to repayments are some of the benefits. But there's also a potential downside. "If the borrowers are struggling to make the repayments, they could feel a lot of extra emotional pressure," says Gess Rambaldi, a partner specialising in Business Recovery and Insolvency at Pitcher Partners. "The lenders might think they have a right to be much more involved in the business than the borrowers would like. And, of course, there's always the risk that the lenders will lose their money. All of this could put a lot of strain on the relationship." 6. UNDERSTAND ALL THE COSTS INVOLVED

5. ARE THERE OTHER OPTIONS? Would you be better off borrowing money from friends and relatives or using other

It isn’t just the purchase price you need to fund; costs can include legal fees, bank fees, ongoing franchise fees, equipment, plant

ü Unlimited push notifications ü Rosters - Xero and MYOB export features ü Visual merchandising sharing & compliance ü Video Messages ü Memos - ‘read’ verification stamps ü Training Videos (we also produce these) ü Quick Quizzes ü Gamification motivation on KPI’s ü LMS & SCORM integration

NOV/DEC 2015 | 54 | WWW.FRANCHISEBUSINESS.COM.AU

ü Graphs/ranking reports ü Surveys ü Feedback from Line Managers ü Store Audit and Analysis ü Performance reviews ü Incident reports ü Service requests ü On-boarding HR documents

FR1115_055

2015-11-09T15:09:41+11:00

sometimes they have to." Are you at the right point in your life to risk this? Andrew Graham, the national head of business solutions for RSM Bird Cameron, says “If you have other assets of value, such as investment properties in addition to your primary place of residence, then consider these assets as collateral for your new franchise. This may be a way of managing risk to protect your primary residence.”

or fitout costs. Working capital is essential to keep the business afloat until it starts turning a profit. And consider how you will repay any loans you do take out. "The business needs to earn enough on its own to pay down its debts," points out Ovenden. 7. SHOULD YOU STAY IN YOUR JOB? Think about either your or your partner maintaining their employment - a steady

pay cheque can take care of the mortgage while you establish your business.

WHAT IS YOUR APPETITE FOR RISK? Remember, if you borrow against your home then you risk losing it if your business fails. "This is really unpalatable for a lot of reasons," says Ovenden. "Bankers never want to go down this path but

Graham adds, “If you do mortgage your home, make sure you set the business up in a structure that protects your personal assets in the case of legal action or business failure. Shop around for the best interest rates, terms and conditions and type of finance that best suits your needs. This could include a combination of leasing, interest only or principal and interest borrowings.” If you decide to go ahead and mortgage your home, it is critical to get professional advice to ensure you have adequately protected yourself and your family from the consequences of business failure.

Want a

Change

for the better?

Want more control over your life, income and time? Then a franchise may be an option for you. 7R ¿ QG RXW DERXW

franchising WKH EHQH¿ WV costs

9 , 3 FD Q ¿ solutio QG D n to su it PRVW E XGJHWV

considerations

Call us today to meet with our experienced team. :H¶OO ZRUN ZLWK \RX WR ¿ QG D IUDQFKLVH RSWLRQ WKDW EHVW VXLWV \RXU QHHGV

Over the last 35 years, V.I.P. has helped over 4,000 people just like you enjoy more control over their life, income and time

13 2613

viphomeservices.com.au

1 st to franchise in home services | 3 rd company to franchise in Australia NOV/DEC 2015 | 55 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_056

2015-11-09T18:11:47+11:00

So you want to be

A FRANCHISEE?

antastic! Now here’s the hard part. You have more than 1160 franchised systems to choose from; probably even more now, because everyday in Australia there are people working to franchise their business. So how do you negotiate this minefield? Easy! Here are three tips to help you choose the right franchise system for you.

Now before we start let me tell you a secret. You, right there, are a platinum commodity in the franchising world. With so many franchise systems available in Australia, finding franchisees – people just like you – to invest in a franchise system is hard. Good franchisors look for people that are a fit with their brand, have passion for their brand and who are committed to running a successful business. If you have these qualities then you will be highly sought after by franchisors.

Don’t be rushed to make a decision, there are always new opportunities available. Do your due diligence on more than one opportunity and on more than one franchise brand because once you have signed the franchise agreement you are in for the long haul: the length of your lease and the franchise agreement.

can check your goals against those of the franchise system you are entering.

So you need to be sure that you can work in this system, no matter how it turns out, for the entire journey.

Well firstly this magazine is a great place to start. List all the brands that you feel an alignment with. Research these brands on the Internet.

1. KNOW WHY YOU ARE DOING THIS What are your passions, goals and skill set? This sounds a little obvious doesn’t it but it is really important that you clarify with yourself and your business partner WHY you are going on this journey. Is it to attain freedom and flexibility from the nine to five grind, is it to build wealth, is it to change the way people look at the world? It doesn’t matter what it is, what does matter is that you know WHY so that you

2. KNOW THE OPPORTUNITIES Once you are clear on your WHY and where you want to be, it is time to find the system for you. So where do you look?

Visit other stores in these brands and watch how they work. Not just for a couple of minutes but settle in and watch their staff and the type of customer that visits. What are the staff doing? Can you picture yourself doing this every day? Look at the product they are selling. Would you use it? Do you feel a connection with it? Would you be proud to sell it? One thing I know for sure, if you have any doubts now about what you are seeing, this will be the one thing that will cause friction in a franchise relationship.

NOV/DEC 2015 | 56 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_057

2015-11-09T18:11:47+11:00

BY ELIZABETH GILLAM Elizabeth is a mentor, speaker and author, and focuses on creating high performance franchisees through her business Franchisee Success. She has owned and operated three franchised food businesses with Boost Juice, Healthy Habits and Bucking Bull Carvery.

You as a franchisee cannot change any of the core products or the system. You are the face of the brand in your local area so you have to be as passionate about the product as the franchisor is. Once you find a brand that fits you then make an enquiry. The franchisor’s website will always have the process detailed for you. Chat with the salesperson. Attend an information evening or get the information pack. Don’t be rushed, take your time, read all the information, see where the next opportunity is and speak with other franchisees in that system.

then lose it. Take as much time as you need here and ask as many questions as you need. Delve deep to find out more about the franchisor. What is their experience, what operational support do they offer and what training is provided to the franchisee? What is the business model? Work out the potential profit that you can achieve in the time frame of the franchise agreement and absolutely know the key performance indicators (KPIs) that you need to meet every day from the very first day you trade.

Whenever I speak with franchisees in crisis the one thing they always say is that they wished they had done better due diligence. People get excited with the opportunity, the next phase in their life and they rush in.

Can you grow your empire by having multiple sites in this brand? Look into the business case on offer to you. Just because the franchisor is excellent, does not mean that every opportunity they offer is sound. You have local knowledge of the area you are purchasing your franchise in and this is why the franchisor is choosing to franchise. They could potentially own all the stores and set up all over Australia, but they have chosen to take on partners (franchisees) to grow with them.

I call this the ‘excitement head’. If you have it

Skills you bring to the table are local

3. DO YOUR DUE DILIGENCE

knowledge and the ability to manage, in detail, your particular store. To do this due diligence you must work with professionals. Find a lawyer and accountant who understand franchising and engage a business mentor with franchising experience to take you through the process. Franchising is different from owning your own business. It is governed by the Australian Competition and Consumer Commission and has its own code of conduct, which details how the franchise relationship should work. Trust me, however many questions you ask here will never be too many and will ultimately lead to your successful journey as franchisee. So as you start your franchise journey, remember this is a big decision. It is not to be taken lightly. I often compare it to getting married. Go on a lot of first dates, have a few flings and fun along the way but be careful when entering into the long term relationship, be sure it is the one for you.

NOV/DEC 2015 | 57 | WWW.FRANCHISEBUSINESS.COM.AU

FR0915_000_IND

2015-09-04T14:14:15+10:00

FOR SALE!

s r e h t o r B n a i Ind Restaurant Franchises available NOW

LATEST NEWS!

Indian Brothers are excited to announce the appointment of our new Master Franchisor for Western Australia. Please contact Tony on 0419941988 for all WA Franchise enquiries. We are also proud to be recognised as a finalist for the India Australia Business & Community Awards – Small Business of the Year 2015. We look forward to the winners announcement at the Gala Awards Ceremony on Friday 30 October.

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

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

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

Email: franchising@ indianbrothers.com.au or call now for details

Mike on 0488 777 277

BIT_Ad_2Sept15.indd 1

Enquire now for the best locations in Western Australia. Contact Tony (tonyv@indianbrothers.com.au) or 0419941988

3/09/2015 9:19 am

FR1115_059

2015-11-09T10:01:12+11:00

re you considering whether to buy a franchise or start up your own business? There are pros and cons to each - check out these benefits to investing in a franchise.

I feel part of a family. This is because I receive the support from the franchisor in all aspects of my business. I am not alone and therefore am able to be more successful in my business.

3. FRANCHISE SYSTEMS

First Class Accounts Craigieburn franchisee Trish Jones had been a management accountant for more than 20 years and when the company decided to relocate she seized the opportunity to change her career. Jones started her business in 2010 and has gone from strength to strength. She won the 2010 First Class Accounts Brand Ambassador Award and the 2010 First Class Accounts Best Emerging Franchisee Award and has recently been named 2015 Franchise Council of Australia TAS/VIC Franchisee of the Year with less than two staff. So what does Trish Jones regard as the five reasons for choosing a franchise?

1. BRAND STRENGTH I never realised the importance of the brand before I bought the franchise. Branding is everything when you buy a franchise business. You become a part of that brand and you must make sure that your marketing is part of that brandâ&#x20AC;&#x2122;s strategy and worthy of the brand. The brand defines your business and services to the public and gives assurance of quality to your clients.

2. THE FRANCHISE CULTURE I never knew how important the culture of the franchise was. I have found that it is one of the most important aspects of a franchise system. My brand, First Class Accounts has a dynamic and really caring and sharing culture. With First Class Accounts

A good franchise has systems in place that work for you. They help you to ensure that you are compliant, that there is continuity in your processes, and that the franchisor delivers on-going training and support when you need it the most. You are adopting a model that is already proven so you can be successful from the very start without having to develop your own systems through trial and error. This saves you time and money and in fact gives the opportunity to give better service for your clients.

4. SUPPORT I have found that it is a great advantage to be part of a franchise network as opposed to being an independent operator; there are systems in place, initial and on-going training, and on-support from your franchisor and from other franchisees who are keen to share their knowledge and advice with you. In addition the national marketing campaigns supplied by the franchisor keeps your brand top of mind and help you to grow your business.

5. VALUE FOR MONEY Buying a franchise is really value for money when you add up all of the costs of the training, support, and marketing and the peace of mind you get when you realise that there is a genuine benefit in the return on your investment. If you had to independently pay for all of the training, brand development, marketing and ongoing support you would be up for a fortune. However with a franchise network like First Class Accounts, all of these costs are included in the franchise structure and fees, making it practical and affordable.

NOV/DEC 2015 | 59 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_060

2015-11-09T10:01:12+11:00

A FRANCHISOR GOES BUST...WHAT NEXT?

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

hat happens if my franchisor goes bust or sells their rights? Is it the end of the world? No, however it is unsettling to franchisees and can create some concern and unrest.

The founder may then delegate the franchise support to a management team, take a step back and sell their rights in the franchise system. This can mean significant change to the brand, the system and culture of the system. The new franchisor or equity owners will be focused on ensuring a return on their investment. They may introduce new ideas that may be considered positive or negative by the franchisees.

Franchisees are often attracted to a franchise brand or system by the enthusiasm and vision of the founder, who may have been the face of the brand and quite hands-on, met and approved franchisees. The founder may have had a direct role and interest in supporting franchisees in the early years.

Change can be liberating but for some, change is the unknown and can be frightening. The way in which this change occurs and how the change is communicated by the original franchisor and its management team will largely determine whether franchisees react positively to the

change of ownership. Communication by the franchisor is just as important as acceptance by the franchisee. The new owner may be more diligent in enforcing franchiseesâ&#x20AC;&#x2122; obligations and require more accountability from franchisees in an effort to improve the system as a whole. This can lead to disillusioned franchisees. While some will stay for other franchisees it is the catalyst to get out. It is also the opportunity for the new franchisor to identify non-performing franchisees and negotiate their exit and develop those franchisees that can adapt and build on the brand and system. Most franchise agreements will have a

NOV/DEC 2015 | 60 | WWW.FRANCHISEBUSINESS.COM.AU

FR0915_000_GRO

2015-08-25T09:13:56+10:00

Grout & Tile restoration is now in HUGE demand in Australia! Want to be part of a winning team? GroutPro might just tick all the boxes... Low entry cost (everything included) No experience required (full training provided) High profit margin (up to $100 per hour regularly achieved) Multiple income streams Investment can be recovered in less than 5 months Award winning systems and procedures Ongoing support and training Large protected territories Perfect blend of income and lifestyle

...After

Before...

Interested? Like to find out more? Download our FREE info pack at www.groutpro.com.au or call 07 5515 0118 to register your interest.

FR1115_062

2015-11-09T10:01:12+11:00

provision that enables the franchisor to assign or transfer its rights to a third party without the consent of the franchisee. A franchisor can sell or assign its rights in a number of ways: ✱ By selling its rights to operate the system (the brand, intellectual property and assets) to a third party. ✱ By a transfer of its shares in the franchisor company or a majority of shares to a third party. ✱ The franchise rights may be sold to a third party that operates a number of different brands and systems under a corporate management model. ✱ The franchisor may be wound up and a liquidator appointed who will sell the franchise rights to a third party.

FRANCHISOR OBLIGATIONS As this is an important event that will effect the franchisees, the franchisor has an obligation under the Franchising Code to advise a franchisee in writing within a reasonable time (but not more that 14 days) of its change of ownership or control of the business, or a change in ownership of the intellectual property. It’s a good idea to request a copy of the agreement the franchisor signed with the new owners, however the franchisor is under no obligation to provide this to franchisees.

THE FRANCHISOR IN LIQUIDATION Franchisees often believe they have a right to terminate their franchise agreement where a franchisor goes into liquidation –

that is not the case. The franchisee has no right to terminate the franchise agreement except in the unlikely event the agreement includes an express right for the franchisee to do so. The liquidator takes control of the franchisor company and can enforce the rights against franchisees. The franchisee must continue to pay royalties and adhere to the franchise system. The liquidator will quickly try to find a purchaser to acquire the rights and in some circumstances, they may offer the rights to existing franchisees. Franchisees continue to be contractually bound to meet their obligations under the agreement and the liquidator can enforce the franchisor’s rights against the franchisee. The franchisee can only transfer its rights or sell the franchise business with the consent of the franchisor. So when a franchisor sells or goes ‘belly up’ the franchisee will be required to continue operating under its franchise agreement. Although a franchisee will continue to be bound by the terms of the franchise agreement, it should be borne in mind that the new franchisor will also be required to meet its obligations as a franchisor under the Code. In the case of a well established franchise system, a change in ownership may have little or no impact on franchisees. Although there will be a period of adjustment, franchisees should keep in mind that a new franchisor will hopefully be looking to improve the system and this will ultimately benefit everyone. NOV/DEC 2015 | 62 | WWW.FRANCHISEBUSINESS.COM.AU

The new franchisor or equity owners will be focused on ensuring a return on their investment. They may introduce new ideas that may be considered positive or negative by the franchisees

TP0115_007

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

FR1115_064

2015-11-10T08:33:55+11:00

What to expect from

FRANCHISEE TRAINING

hen you buy a franchise, training is a fundamental part of the purchase. So what can you expect from your training sessions? By Tammy Ryder, general manager of people, The Coffee Club.

Having worked my way from the Hungry Jacks drive-through into the role as general manager of people at The Coffee Club and Minor DKL Food Group, I’ve seen first-hand the importance of franchisee training. The benefits of engaging and inspiring people through ongoing education and clear career development pathways have been evident throughout every facet of my career in the franchise industry. More recently, there has been a distinct shift from classroom style learning and development to the benefits of mobile, online and readily accessible training programs that tend to engage the younger generations more effectively. Since implementing a new approach to The Coffee Club’s training in July

2014, every level of our business – from staff, franchisees and the broader company – is reaping the rewards. Furthermore, it’s often our strongest franchisees that credit their team of highly trained staff for their business success. We’ve introduced a new Learning & Development program and since then we’ve taken out top honours at the prestigious QSR Media Awards for “Training Initiative of the Year” in July, and have seen notable growth in our top 10 stores that have completed the new and improved training program.

must strive to maintain a high standard in customer service and food quality in 360 stores operating throughout nine countries. Evidently the key to maintaining this consistency is the quality of our franchisees, empowering them as business owners along with providing a robust framework they can use to educate their staff. While most companies train franchisees solely on the day-today business operations such as food, coffee and cleaning protocols, The Coffee Club also provides crucial information on how to run a business.

THE BENEFITS OF COMPREHENSIVE FRANCHISEE TRAINING

Through our L&D program overhaul, we wanted to equip our franchisees with the essential tools and knowledge to ensure they are successful – this includes training on how to manage their staff, tips around profitability and practical information on managing their books. We understand that many people come to The Coffee Club as franchisees after a change in career so it is important that we can provide accessible, mobile training on business management.

Consistency is key in all aspects of franchising. The Coffee Club

Added to this, once each fran-

If we can achieve high customer satisfaction in our stores, we build customer loyalty and repeat visitation that will have a direct impact on the bottom line for franchisees. In fact, we’ve had a six per cent increase in same store sales growth in the top stores that have undertaken the new L&D program.

NOV/DEC 2015 | 64 | WWW.FRANCHISEBUSINESS.COM.AU

chisee undertakes the initial training they receive regular access to webinars on emerging topics in the hospitality industry and newsletters with best-practice tips. Our franchisees are still provided a comprehensive suite of content on best-practice management of their day-to-day store operations to promote consistency between stores, however, The Coffee Club’s investment in a dedicated franchisee training program provides greater focus on people management skills and helps develop strong teams within each store. The feedback has been very positive with franchisees able to see the correlation between training and the impact on their business including transactions.

WHAT A FRANCHISEE CAN EXPECT FROM TRAINING ✱ Operational protocols ✱ Support systems ✱ Compliance requirements ✱ In-store training ✱ Staff management ✱ Business management ✱ Best practice tips

FR1115_000_BAT

2015-11-04T09:09:39+11:00

FR1115_000_RFG1_2

2015-11-03T12:52:44+11:00

OPEN AN AMAZING FRANCHISE TODAY FINANCE ASSISTANCE NOW AVAILABLE! FOLLOW YOUR DREAMS AND INVEST IN ONE OF OUR FRANCHISE SYSTEMS AND WE’LL MAKE THE REST EASY! Retail Food Group is offering finance options to open a store with one of these six iconic Australian brands.

Store shop costs range from $320,000 - $450,000 (depending on the brand and size of store).

• • • • • •

Additionally, you will need to provide your own start-up working capital costs, rent, bank guarantee, advisor’s fees, insurance and on-going operational costs.

Donut King Michel’s Patisserie Gloria Jean’s Coffees Crust Gourmet Pizza Pizza Capers Brumby’s Bakery

For a limited time only, if you contribute a minimum of $100,000 towards the cost of a new shop, RFG can provide finance options with the remainder of the shop costs (which will be repayable once you start trading).

Becoming your own boss will be one of the best things you ever do and we’ll be there to support you every step of the way! We have amazing opportunities available nationwide. Alternatively we can find a site that suits you.

FR1115_000_RFG1_3

2015-11-03T12:52:44+11:00

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

BE QUICK, FINANCE ASSISTANCE CLOSES SHORTLY * Conditions apply.

START YOUR JOURNEY TODAY

VISIT RFG.COM.AU OR FREECALL 1800 067 619

FR1115_068

2015-11-09T18:17:59+11:00

he numbers speak for themselves. Across Australia there are 1.2m pools installed in backyards; 25,000 new pools are built each year; the pool aftercare business is worth about $1.5bn in retail sales.

Owning a home with a pool is part of the great Australian dream. Even after the GFC, says PoolWerx founder John O’Brien, the pool business bounced back. “It’s so integrated into our lives now – people install pools for the family, for the aesthetics, and now as we’re ageing and more health conscious, they are installing lap pools.” Whether it’s for lifestyle or practicality, there’s no sign that the great Australian love affair with home pools will be drying up. And that’s good news for anyone looking to invest in a business with plenty of potential. O’Brien will go so far as to say the pool aftercare industry is immune to downturns. “If you’ve got a pool, it’s a living beast, you can’t ignore it. It consumes chemicals, it requires equipment, you can’t defer servicing.” He thought that in the GFC customers might return to maintaining their pools themselves. But it didn’t happen. “When people already have a habit, a routine, they won’t give up their free time,” he says. Even the trend for e-commerce hasn’t proved an obstacle for the business, which comprises retail and servicing. “It doesn’t work for the pool industry, you can’t send chemicals through the post. If you’re buying a piece of equipment online, how do you know what size it is? Who is going to install it? “We’ll size it, deliver it, and provide an extended warranty. We have a lot of defences against online.” NOV/DEC 2015 | 68 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_069

2015-11-09T18:17:59+11:00

NOV/DEC 2015 | 69 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_070

2015-11-09T18:17:59+11:00

STATEMENT POOLS ARE A TREND. IMAGES: NARELLAN POOLS

It’s a similar situation in pool construction although the digital world has sharpened the focus for pool building business Narellan Pools, which takes the customer from initial design through to installation. Peter Baily, newly minted chief operating officer, says simply, “You have to be the best”. That’s the aim of the family-owned firm which designs, manufactures and installs a vast range of pools.

POOLS ARE AN ASSET And that’s where the whole industry starts – inspiring, creating, fulfilling the dream of having a pool in the backyard. Baily identifies that today’s customers are more conscious of appearance – not just in the grandeur of statement pools, which are increasingly popular, but the addition of

second and third pools to showcase the home and cater for everyone’s preferences (lap pools, a shallow pool for kids, a spa). Even with the multiple building sites erecting apartment blocks across capital cities there is every sign that the pool business will continue swimmingly. “It’s very affordable to put a pool in," Baily says. Does a pool add value to a property? The dynamics have changed now, it’s not a risk, it's seen as an asset, he adds. An indication of how the business is forging ahead is the new manufacturing space opening in January in Picton that is three to four times the size of the previous New South Wales base. There is room to expand further on the site and include R&D facilities. Manufacturing and shipping is handled

from a number of interstate bases, each pool delivered by road. The workforce has grown too, and the reach of the franchised units around the country continues. With 27 franchisees there is room for just another 20, Baily predicts. There’s an export market in New Zealand which is growing, and the development of a global business through joint ventures around the world (with local manufacture) is a significant step. Canada is next in line. “We’re very strategic about international growth. We have done lots of homework, thought out the strategy and the model we will provide. Every system we’ve built we think, how can it work overseas? “In technical terms, quality and share of market for fibreglass pools, Australia leads the way,” Baily adds.

NOV/DEC 2015 | 70 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_071

2015-11-09T18:17:59+11:00

30% OF ALL POOLS ARE SERVICED EACH MONTH. IMAGES: POOLWERX

If you've got a pool, it's a living beast, you can't ignore it. It consumes chemicals, it requires equipment, you can't defer servicing Narellan buys resin and glass locally. Everything is Australian-made. A pool takes three days to install, says Baily, and each pool comes with a 25 year warranty.

and a few tools. You don’t have to be a builder.”

In the past franchisees have been the installers and they’ve had the requisite construction skills. Now though the company is looking to grant franchises to more sales-minded individuals, professionals who have a passion to own and drive a business, and who have leadership skills.

Once the pool is installed, then it’s time for a business like Poolwerx to step up.

“The best franchisees have teams of sales people and installers. They are two very distinct processes,” says Baily. The franchisor provides lead generation, so it’s fairly easy with the right set of skills to sell to clients, he says. “This is a business where you can get in really cheaply, you only need a computer

SERVICING THE DREAM

About 30 percent of pools are serviced on a regular basis says John O’Brien, that’s one a month. “It’s a day time business. People like coming home to have their pool fresh and clean. “We’re in the business of people having fun under the sun in their own backyard." Poolwerx too looks for a more professional profile in its franchisees than when the business started out. While the business has been built on pool servicing, and entry NOV/DEC 2015 | 71 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_072

2015-11-09T18:17:59+11:00

HOME OWNERS ARE CHOOSING THREE POOLS AS A FEATURE

level franchisees can still be a man in a van for a year, a retail store is an integral part of the business model. “We’re a hub and spoke model. The typical franchisee will have a store and three vans, and a $1m turnover. Now we look for middle managers with the capacity to run a million dollar business.

The apartment trend is favourable for the pool business as well. Every apartment block has a luxurious pool

“We want leadership skills and a strong drive to achieve. You can hire in technical knowledge and service,” says O’Brien. Technicians can learn the skills required at the company’s Queensland headquarters which houses a world-class training facility. Two fibreglass pools are set above ground “with every bit of technology attached”, says O’Brien. Much of the focus has been on residential but commercial clients account for nearly one third of the Poolwerx business. This can be divided into six categories: real estate, hospitality, hotels, strata units, institutions, federal buildings. The franchisees could also find themselves working with pool builders and on insurance claims, a clear advantage of having a countrywide footprint that can cater to national firms. The apartment trend is favourable for

the pool sector as well. “Every apartment block has a luxurious pool,” says O’Brien, and a licensed business like Poolwerx is best placed to fulfil the strict health and testing regulations. O’Brien has been instrumental in establishing in Australia a national accreditation for technicians, and this helps franchisees attract staff looking for a career path, he says. “Franchisees can bring someone in and groom them to become a store manager.” Like Narellan Pools, Poolwerx sees potential overseas. “We’ve bought four brands in four locations in the US. It’s about conversions right now. We’re very optimistic, and are aiming for 300 stores in five years.” Importantly for the Australian franchisees, O’Brien believes in finding the next opportunity for growth or an extra income stream. “About 80 percent of pools are now more than 20 years old. There is a massive need for renovation, particularly as baby boomers move into apartments and a younger generation moves into a family home.” Renovating a pool can be a $20,000 investment and can include lining the pool, painting, tiling, tiling the surrounding area, putting in a new deck, updating equipment.

NOV/DEC 2015 | 72 | WWW.FRANCHISEBUSINESS.COM.AU

FR0915_000_BUY

2015-09-04T15:25:11+10:00

• Enjoy Helping Others Succeed • Client Focused Business • Committed to Outstanding Service • Personal Development & Growth • Passion For Property Investing

FR1115_074

2015-11-10T17:28:32+11:00

Packed with

POT E N T I A L

re you a sandwich lover? Itâ&#x20AC;&#x2122;s hard not to be when there is so much choice in the market right now. Aussies certainly embrace the bread-and-filling option at lunchtime, and what has traditionally been the reserve of the local sandwich bar has become a multi-brand business. The Subway chain has had a lot to do with this development, and for its efforts it has claimed an astonishing 84 percent of the sandwich market.

NOV/DEC 2015 | 74 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_075

2015-11-10T17:28:32+11:00

So what’s happening with other franchises out there, and how are they competing?

PRODUCTS AND SERVICES SEGMENTATION (2015-16)

Four franchises which trade in the sandwich market have contributed to the debate.

WHAT’S YOUR CORE PRODUCT? Brumby’s GO: Brumby’s GO is dedicated to quality fresh snacks baked ready to go. Our top selling products are our gourmet sandwiches that are made using freshly baked bread and filled with a range of ingredients. Our most popular sandwiches are the Chicken Caesar and Ham & Salad. Healthy Habits: Our core product remains the humble sandwich on our larger ‘catering’ loaf. We are increasingly seeing some demand for half baguettes and we have worked more of that type of product into our range. The classic toppings like lettuce, tomato and cucumber remain very popular with little moderation. Schnitzel and chicken breast remain the most popular meat with customers, coupled with roast pork.

SOURCE: WWW.IBISWORLD.COM.AU HEALTHY HABITS

Liv-eat: From great coffee, salad bowls, new toasties and fresh juices the total sales units of product ranges have spread dramatically with a healthy trend in sales for all departments. We see higher salad and juice sales in summer with heartier soups, sandwiches and toasties achieving higher sales in the colder months. As expected we have also seen some decline in the demand for products with hi carb ingredients. Soul Origin: With every sandwich, wrap, baguette or salad, we really let the ingredients shine through. Fillings wise, we focus on healthy delicious combinations. Some of our more popular fillings include Chicken and Avocado and Chicken Schnitzel. We also serve a Roast Vegetable filling available in a wrap, panini and baguette that is also very popular. We also pride ourselves on high quality, artisan bread that is used in our baguettes and paninis, sourcing the highest quality suppliers we can find.

HOW DO YOU DIFFERENTIATE YOUR BRAND? BG: We use preservative free ingredients and work closely with our Aussie wheat supplier Manildra to ensure the brand continues to support hardworking Aussie farmers to bring top quality Australian product to our customers. HH: There is a level of commoditisation between all the sandwich offers. We differentiate ourselves from others

like Subway through a combination of better quality ingredients – particularly on meats and cheeses. We differentiate along two distinct dimensions: width of product range and electronic commerce. In terms of product range the fact that we provide salad, juices and smoothies means that we can offer a complete meal package. Offering meal combinations that combine small bread products (something customers want more of) with salads and juices has proven quite popular. As far as we are aware we were the first sandwich chain to deploy electronic loyalty two years ago and since then we have continued to innovate. We are looking at new solutions

now that offer online ordering through multiple channels as well as sophisticated consumer marketing. This will continue to be a differentiator of our brand. Most QSR, particularly small chains like ours, simply do not invest in reaching the customer outside of the purchase occasion. LE: One of the hardest questions to answer in our industry is differentiation and competitive advantage over competitors. There are no hero products in our industry or special methods, Liv-eat’s differentiation comes from market position and company culture. We position our brand above Subway in the market, but below

NOV/DEC 2015 | 75 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_076

2015-11-10T16:59:36+11:00

1 - THE POPULAR HALF BAGUETTE AT HEALTHY HABITS 2- HAM AND SALAD IS A STAR FILLING FOR BRUMBYS GO

the expectation of the healthy café with higher prices. We aim to offer a fresher more natural product that supports local business with a fantastic company culture between all stores. SO: Subway’s 84 percent market share is testament to the hard work they’ve put in promoting the brand in above the line media over the past 20 years in Australia. For a young brand like Soul Origin, we are reliant on in-store experiences and word of mouth. We strive to leave a great first impression through world-class customer service and high quality products. When looking to engage new customers, we aim for innovative activations that grab attention and communicate a very simple message. We have a major outdoor activity coming up in Sydney’s Martin Place where we will be constructing a giant billboard made entirely of fresh healthy fruit and vegetables spelling out our catch line “Eat Fresh-er” and giving away 3,000 salads for lunch.

HOW DO YOU WORK WITH FRANCHISEES TO ENSURE PROFITABILITY? BG: Our Brumby’s franchisees have on-the-ground support from their business development manager (BDM) and territory manager. Our BDMs work closely with our franchisees on all aspects of their business, from business planning to operations and local area marketing. This level of support ensures our franchisees have the necessary tools required to run a successful business. HH: We continue to invest in systems and processes to understand our franchisee’s

business. This includes even most recently providing tools to franchisees where they can input local fruit and vegetable supply to get cost of goods calculations specific to their store. This enables us to understand at a granular level what food costs are like and what parts of the menu to deploy for maximum profitability. Coupled with this, we offer our franchisees access to online rostering and labour tools to enable us to obtain insight into their rosters. By controlling labour and food costs and maximising marketing to grow top line sales we tend to see significantly better performance than independents. It probably shouldn’t be overlooked either that we tend to get better lease deals than an independent. LE: We work with each store to ensure the team understands the core principles of business. True understanding of these business principles seems to prove fruitful in success for each store in increasing profits and team functionality. From market research and competitor reviews, it seems to be the stores that lack this training and focus are the stores that struggle for sales, cost control and profits. SO: Our model relies on four key performance indicators (KPIs) and our franchisees are made aware of the significance of these numbers. Every KPI in every system throughout the world is a function of turnover. Our aim at the inception of a franchise outlet is to maximise turnover. Once this is achieved, bringing the other KPIs, food costs, and wages in line with the model is significantly easier. The last of the KPIs, which cannot be affected, rent, can be justified by achieving the sales target.

HOW DO YOU MAINTAIN FOOD STANDARDS ACROSS THE NETWORK? BG: To maintain food standards across all of our Brumby’s stores and to ensure product quality is kept at a premium, the brand has implemented an auditing system that analyses all aspects of the business. Brumby’s Bakery core products are made to set recipes, ensuring consistent quality across the network. HH: All store owners are trained in food safety both by us and also by a third party as they obtain their food safety supervisor certificate. We then provide all franchisees with access to a food safety toolkit which helps them understand their obligations and provides tools to ensure they remain on top of the obligations. Our audits then follow through on this to ensure full compliance. LE: From the moment a new team member enters the store, they are trained and monitored on their food handling skills. Having systems and procedures is key, as unqualified team members need to be trained to follow a system that works, delivering the same consistent and fresh product to each and every customer. We work heavily with store managers and supervisors to push the boundaries of amazing displays and presentation in our industry. Team culture and competitiveness is also encouraged to push the limits. With hard work comes rewards and recognition. SO: Being a young brand, we know that

NOV/DEC 2015 | 76 | WWW.FRANCHISEBUSINESS.COM.AU

FR0914_000_DODO

2014-08-29T13:36:43+10:00

Dodo Connect is on a nationwide search for franchise partners Help us grow the hundreds of thousands of existing Dodo customers already enjoying our great value products and services.

Be a part of Dodo Connect’s retail expansion to 150 major locations in Australia

Represent Dodo’s huge range of great value home services including telecommunications, energy and insurance

Enjoy the beneﬁts of our simple business format with low-cost entry

Reap the rewards of your sales success through the opportunity of earning uncapped income

Join the flock!

BROADBAND

MOBILE

03 9923 3514

MOBILE BROADBAND

MOBILE

INSURANCE

dodo.com/franchise

ELECTRICITY

GAS

franchise@dodo.com

TP0115_007

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

FR1115_079

2015-11-10T16:59:36+11:00

our reputation in the marketplace hinges on the experience customers have in store. With that in mind, our experienced Soul Managers (area managers) have exceptionally high standards when it comes to the production, display and taste of our products. They work with kitchen staff in store to give them the training they need to ensure all products available in store meet or exceed the high standards we expect. We also have dedicated communication and training tool called Soul Skool accessible by all Soul Origin staff that provides processes and guidelines for every single item we sell.

HOW WILL YOU DRIVE BUSINESS GROWTH? BG: The industry is constantly changing and providing the brand with new opportunities for growth and product innovation. We have an exciting year ahead with new product development and creative marketing campaigns. You always need to innovate and evolve to remain relevant. With the brand’s new look and feel gaining traction across the network, Brumby’s is well placed for growth over the coming years.

1 - A LIV-EAT STORE 2- FRESH INGREDIENTS AT SOUL ORIGIN

HH: Our focus is on doubling down on our core strength which was always made to order and this is really what is at the heart of the retail buzzwords like ‘metailing’ so we think we will be in a good position into the foreseeable future. LE: Growth is what you make of it… there is always strong growth in a business willing to listen and provide for its customers. As our mission states ‘’we are committed to making the world a healthier, happier place, one customer at a time…’’ so we see plenty of growth opportunity here. SO: We will be competitive in the marketing space, relying on new media and innovative formats, such as our giant edible billboard in Martin Place, to cut through the sometimes cluttered QSR competitive landscape resulting in increased brand awareness and increased brand preference.

HOW IS INCREASED COMPETITION CHANGING HOW YOU DO BUSINESS? BG: Brumby’s Bakery is one of the leaders in the industry; it’s been 40 years since we baked our first loaf of fresh bread and since then, we have established ourselves as an Australian favourite. In the past 12 months we’ve been working through Project Evolution, the future of Brumby’s, and have developed a new look and feel

that is in line with changing consumer demands and offers a more authentic, local bakery experience. If anything, the recent rise of the independent bakery has reinvigorated the market and helped to educate consumers about what makes good quality bread, and consumers' appreciation for the preservative free, grain rich bread we’ve been baking for years. Brumby’s has built a reputation for delicious, freshly baked bread and we will continue to deliver on this value proposition for our customers. HH: Striving to remain relevant in a hypercompetitive industry means that we have to be disciplined. That means focusing on what matters and for us that is good value and quality coupled with a focus on achieving exceptional customer service. We believe, and our research proves, that if we do these things then we will satisfy a real customer need and remain relevant no matter what other players are out in the market. LE: Dealing with competition is part of every business. In our market the majority of increased competition comes from cafés, which have a higher price point than Liv-eat’s offering. This allows us to

distinguish our offering, experience and price point to our customer. Balancing these is the trick and keeping a keen eye on industry innovators is forever helpful. Food trucks offer a great experience to customers but a different experience to what we provide. We ensure that our values don’t clash and we continue to focus on our core values to build our business. We evaluate store positions and offerings to counter any adverse effects of any competitors whether they are a café or a food truck. SO: The rise of new competition in the form of food trucks or independents are great for our industry, it’s a testament to the demand for fresh and tasty food at affordable prices. As the competition becomes more and more cluttered, brands such as Soul Origin will reinforce their marketleading standards in regards to shop fit outs, ensuring our customer service is world class and that our processes and products are of the highest quality. Our marketing strategies will need to be world class with greater focus on brand purpose rather than product specific messaging.

NOV/DEC 2015 | 79 | WWW.FRANCHISEBUSINESS.COM.AU

FR0915_000_JUS

2015-09-15T11:13:06+10:00

IN - H O ME , SO CI AL & LI FES TYLE S UPPORT

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

Visit Visit our our website website to to learn learn more more about about franchising franchisingwith with JustBetter BetterCare Careand and view viewaa list list of of sites sites currently current available at:at: Just available www.justbettercare.com/franchise-me www.justbettercare.com/franchise-me or contact Paul Stearn, our Franchise Manager, on: (02) 9934 9929 or contact our Franchise Manager on (02) 9934 9950

Untitled-49 1

19/02/2015 11:36 am

FR1115_081

2015-11-10T16:59:36+11:00

THE HANDYMAN MARKET

he d-i-y and tradesman field is increasingly busy thanks to a steady rise in the number of households demanding maintenance and alterations to their homes. The market is set to grow revenue at an annualised two percent over the next five years.

TOTAL REVENUE $910.8M

Building installation services 36.5% (plumbing, electrical, alarm installation)

Building completion 19.9% (interior painting, tiling, carpeting)

Building structure services 11.2% (roofing, carport, sheds)

Gardening and other construction services 32.4% (lawn mowing, paving, fencing, gutters)

NOV/DEC 2015 | 81 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_082

2015-11-10T16:59:36+11:00

However, despite favourable growth conditions, competition will heat up. This means tradesmen will need to broaden their skill base to compete, and the decline of the high profit margins will continue. The increased competition over the last five years has resulted in more handymen lining up to become franchisees to boost their exposure and their competitive edge. Despite the growth, there will remain strong competition for franchise operators. In regional areas where word of mouth counts more than a brand, sole traders providing building and gardening services may have an advantage over franchisees. And so the quality of service, and price, will become crucial elements for a franchisee. The report reads “Franchises that provide quality services at affordable prices are generally able to retain existing clients, increase franchise reputation and potentially take business from rival franchises.” The report suggests there is a moderate level of market share concentration with three businesses - Jim’s Group, VIP Home Services and Hire A Hubby - accounting for 48.4 percent of market share. The rest of the sector is highly fragmented. IbisWorld’s report reads “Market share concentration has remained relatively stable over the past five years, as major players have had to contend with their own market saturation despite demand growth for handyman services. Over the coming years, this is not expected to

COST STRUCTURE BENCHMARKS < represents growth/ > represents decline

2.6% revenue = rental costs and utilities = 3.7% revenue = depreciation < 4.3% revenue = wages > = product/ equipment purchases <

10.8%

revenue

46.9% revenue = profit >

= other costs inc franchise fees, marketing, tax, admin, legal, web hosting <

31.7% revenue

P LAS T IC FAB R ICA T IO N

ILLUMINATE

your

BRAND with

SIGNAGE

LAR G E FOR M A T PRIN T IN G

S U P P LY INSTAL L & A TI O N

P R OJ E C T MANAG E

SI GN A GE CUSTOM MANUFACTURE

07 3352 6972 | www.bengadesigns.com.au NOV/DEC 2015 | 82 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_083

2015-11-10T16:59:36+11:00

change sig-nificantly. This is due to the difficulty of individual businesses to expand nationally, a franchisee is not likely to travel interstate to perform work. Due to the competitive nature of the industry, new national franchises will find it hard to break into the industry.”

MARKET SEGMENTATION

62.3%

In this arena the majority of the jobs are of a generalist nature, not demanding specialist work but still at a level higher than most consumers could perform. Consumer sentiment is a key driver of demand: a positive outlook gives consumers confidence to spend on repairing their property. While households are the major source of income, commercial property owners, builders and property managers can also provide business for the handyman.

22.6%

For those brands already operating in the market, it has been a lucrative time. The number of consumers who lack both the time and the skills to perform labour-intensive tasks has increased over the past five years, and while revenue for the next five years won’t match the three percent growth of 2010-15, it will sit at two percent and is expected to reach $1003.9m in 2019-20.

8.1%

KEY SUCCESS FACTORS The most important elements for a business in this sector: ✱ Having a good reputation ✱ Having a clear market position ✱ A qualified work force ✱ The ability to compete on tender ✱ The ability to expand and curtain operations rapidly in line with market demand

households

residential builders & property managers

non-residential builders & property managers

businesses

STATISTICS: IBISWORLD INDUSTRY REPORT OD5522, TRADESMAN AND HANDYMAN FRANCHISES IN AUSTRALIA

Own a Slice of La Porchetta! Join the largest Italian restaurant chain in Australia and New Zealand. You will love taking part of serving our guests quality Italian food, to order, using fresh ingredients. We are looking for passionate food lovers with a strong work ethic and drive to join our family. You bring the drive and commitment and La Porchetta will provide the proven systems, training and support to achieve success. WHY LA PORCHETTA?

“

La Porchetta’s not run like a corporation, but like a family business and you really feel you are part of the group.

“

Vito Ramondetta Franchisee

A proven profitable operation.

We are a much loved and recognisable national brand.

We have strong local area marketing support and advice.

Be part our dynamic and engaged family of restaurants that love people.

Join our team of restaurant owners who love getting together and share ideas.

We offer a flat fee structure that allows you to build your business faster.

Minimum Investment: Dependent on Site Conditions $300k+

Opportunities now available Australia-wide in key metropolitan and regional areas. Visit: http://www.laporchetta.com.au/franchising email: franchising@laporchetta.com.au OR call (03) 9460 6700.

Download our iPhone or Android App

Enquire Now

www.laporchetta.com NOV/DEC 2015 | 83 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_084

2015-11-10T16:59:36+11:00

a gourmet

affair

he burger has been a stalwart of fast food dining since, well, since fast food was defined as such. But tastes and times are a-changing. So can a simple burger still cut the mustard?

Whether it’s a humble beef patty or the glory of the local servo, the burger has been the go-to, speedy meal for countless Australians. The traditional calorie-laden burger and chips can still pull in the crowds, but there’s a more discerning customer who is influencing the fast food menu today.

ideas to find just the right one to tap into the food zeitgeist.

And major movers in the market are responding, testing fresh

“Changing consumer demands and competition from high-

NOV/DEC 2015 | 84 | WWW.FRANCHISEBUSINESS.COM.AU

As Euromonitor senior research analyst Julia Illera explains, in 2014 a number of established fast food operators trialled new outlet concepts, the most notable being KFC and McDonald’s.

FR1115_085

2015-11-10T16:59:36+11:00

TAKE A BITE

TOP 3 BRANDS’ MARKET SHARE:

THE INDUSTRY in 2015-16

39.2% McDonald’s

35 30 24.8% Competitive Foods

25 20 15 10

6.9% Grill’d

5 0 SOURCE: IBISWORLD FAST FOOD BURGER SHOPS IN AUSTRALIA, SEPTEMBER 2015

GRILLING THE BURGER MARKET 1. WHAT’S THE ECONOMIC OUTLOOK?

Cafes and coffee shops. Food trucks.

Consumer confidence boosts the market and it is expected to rise in 2015-16.

5. WHAT’S THE OUTLOOK?

2. WHO IS THE TARGET MARKET? Younger customers (24.5 percent aged under 24). The ageing demographic will have a negative impact. Time poor customers. A decline in average weekly hours is predicted from 2015-16. 3. HOW DO FAST FOOD BURGER FRANCHISEES MAKE MONEY? The sales of discretionary meal options. Higher profits from better operational efficiency, and reducing costs including an increase in casual staff to better refl ect peaks and troughs in trading times, portion control and minimised wastage. Premium brands compete on the quality of their products. 4. WHO IS THE COMPETITION? Sandwich and salad outlets.

Modest growth with an annualised 0.9 percent predicted through to 2020-21. Discretionary income is set to increase and this will support the market. Busier consumers will turn to fast food outlets for convenient meals. Burger shops will need to look to their image to capture a greater share of the customer’s spend as independent and niche operators lead the charge, boosting the number of fast food outlets. 6. WHAT ARE THE OPPORTUNITIES FOR REVENUE GROWTH? Menu options need to refl ect consumer preferences for healthier, premium and fresh products. The onslaught of social media and consumers posting images of food and restaurants means there needs to be a greater focus on premium menu items.

7. WHAT’S ON THE MENU? Burgers remain dominant but this segment has declined: 51.1 percent Breakfast items are down: 12.4 percent Drinks are increasing: 10.8 percent Sides remained steady: 8 percent Wraps, salads, desserts etc are on the up: 17.7 percent 8. HOW MUCH IS SPENT ON WAGES? For every dollar spent on capital costs, $11.93 is paid out in wages. Staff salaries account for the second-largest share of industry revenue: staff are required for customer service, order processing, food preparation and cleaning. Wages have declined over the last five years as franchisees employ more casual staff. 9. WHAT’S SHAPING THE INDUSTRY NOW? There are three distinct trends: Cuisine diversity Healthier eating Premium products SOURCE: IBISWORLD INDUSTRY REPORT FAST FOOD BURGER SHOPS IN AUSTRALIA, SEPTEMBER 2015

NOV/DEC 2015 | 85 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_086

There is a more customerfocused, gourmet flavour to today's bun-free or traditional burger, and the category still represents 32% of the total food sector in Australia

2015-11-10T16:59:36+11:00

end restaurants moving to wards more casual options resulted in these operators experimenting with new concepts and offering customers a more up-market experience. “For example, KFC opened a new outlet in Sydney designed by award-winning design firm The Great Indoors, and following a similar look to KFC Fresh stores in Canada.” The new concept included new menu items such as salads, burgers and wraps featuring ingredients such as basmati rice and red quinoa. This shift towards a more gourmet, casual dining offer was not a success in its Parramatta location, however, with KFC closing the store earlier this year after a failed attempt to gain a liquor licence that would allow it to compete with neighbouring venues. The granddaddy of the burger business, McDonald’s, also invested in a new concept and introduced customised burgers under the tagline Create Your Taste. The new venues also offer table service and customers can use tablets to order and select the burger’s ingredients.

“McDonald’s Create Your Taste concept was supported by an advertising campaign that summarised McDonald’s evolution in Australia, includ-ing the changes the company made to adjust to local tastes,” says Illera. These steps into a more upmarket sphere follow the multi-national brands gentle shift away from core product – the nod to the predominantly female, salad-eating customers of the 21st century. “In 2014 food and drink offerings in Australia were healthier and more diverse,” says Illera. “Drink offerings continued to be seasonal with a number of fast food operators launching summer and winter drink ranges. In terms of food, ancient grains, paleo diet, green smoothies and low-carb menus were commonly found. “For example, burger fast food operator Grill’d launched a lowcarb burger in November, which claimed to have a wholesome nutritional profile, as it includes ingredients such as free-range eggs, almond meal, organic coconut cream, tapioca flour, raw honey and psyllium husk in the bread. “Simil-arly, Sydney burger operator Ribs

NOV/DEC 2015 | 86 | WWW.FRANCHISEBUSINESS.COM.AU

and Burgers launched the “naked Aussie” range, featuring a burger wrapped in a lettuce leaf instead of a bread bun.” There is a more customerfocused, gourmet flavour to today’s bun-free or traditional burger, and the category still represents 32 percent of the total fast food sector in Australia. According to Euromonitor, the burger fast food category was valued at $4.93bn in 2014, and experienced three percent growth from 2013. Over the period 2009-14, the category has experienced a 3.7 percent compound annual growth rate (CAGR) in value terms, a four percent CAGR in terms of transaction numbers, and a 3.1 percent CAGR in terms of growth in outlet numbers. So would you be wise to invest in a burger-based fast food franchise? Well, it’s clear the branded business has captured the market. “Much of this growth has been through chained burger outlets; independents haven’t experienced notable annualised growth during 2009-14,” says Illera.

FR1115_000_LEA

2015-11-03T13:05:34+11:00

I DID IT. â&#x20AC;&#x153;Owning a Leather Doctor franchise has become a financial vehicle for us to retire early. Working our own business gives us the freedom to use our time as an investment, creating our own perpetual income. Our focus on an early retirement is to help serve the world through humanitarian work, creating a better life for others.â&#x20AC;? - David & Pauline Williams Franchisee

Exciting new brands are now available following the same winning system, The Leather Doctor, The Timber Doctor and The Fabric Doctor. This is real opportunity.

I_DID_IT_DAVID&PAULINE_275x205mm.indd 2

Call 1300 453 284 or visit www.myleatherdoctor.com.au You can do it too.

2/11/2015 2:53 pm

FR1115_088

2015-11-09T10:10:36+11:00

THINGS I HAVE LEARNED SINCE BECOMING A FRANCHISEE PARUL MEHTA has been a franchisee with First Class Accounts since 2001. She is an award winning franchisee and was named the 2015 FCA Queensland Franchisee of the Year with less than two staff.

arul Mehta came to Australia in 1996 to start a new life and found her future lay in franchising.

Initially she worked in her family restaurant business but it wasn’t her passion. However without Australian work experience she could not find a job so Mehta turned to franchising as a way to start up her own business. In 2001, with the support of her father-in-law, she was able to purchase the First Class Accounts Sunnybank Hills franchise. Four years later she won the Firsts Class Accounts ‘Go Getter of the Year‘ Award and in 2011 she received the First Class Accounts Platinum Award for achieving high monetary success in her business. Last year Mehta was honoured with the First Class Accounts Business Performance Award and recently was named the Franchise Council of Australia 2015 Queensland Franchisee of the Year with less than two staff. During the 13 years Parul has be able to develop a business that fits her lifestyle, enabled her to spend quality time raising her two children and given her financial independence.

Now she shares the five things that she has discovered since becoming a franchisee. 1. THE CONFIDENCE TO RUN MY OWN BUSINESS When you work for other people you work under their guidance and report to them on your activities. As a franchisee, even though we are given systems and procedures to follow, which are our guidelines, we still need to prove our own ability and have the competence in our field. This support and our own efforts gave me the confidence to run my own business. 2. PUBLIC SPEAKING CONFIDENCE I was never a very good public speaker and when I had to address a group of people I was nervous and unsure. As a franchisee I was encouraged to speak by the First Class Accounts field manager and I found myself rising to this challenge. Without cue cards and after much practice I addressed the group and found my voice. Over the years I have spoken on a number of occasions and have even been able to be relaxed and humorous. I was rewarded by others telling me that they enjoyed my speech and that they found my story interesting and funny. 3. FINANCIAL INDEPENDENCE Since becoming a franchisee I have ach-

ieved financial independence. I was so excited when I was able to purchase my first new car after being in business for only a couple of years. In addition I have been able to make some investments, take time off for holidays and have quality time to be with my family. 4. A NEW LIFESTYLE My business has allowed me to be confident and comfortable to take a year off to give birth and to stay with my second child. I did not suffer any financial loss and was able to resume my career after the long break. My franchisee business has given me a lifestyle that I can count on and my family life is strong because of this. I can support my children’s schooling, extra curricula activities and plan for their futures without worry or stress. 5. FAMILY LOVE AND SUPPORT Throughout these years the most important thing that I have learned is that I have the love and support of my family. My father and mother-in-law’s initial financial investment which allowed me to purchase my business, my parents love and encouragement, my children’s understanding and flexibility regarding my time, and my husband’s unstinting love and support. I know that I could not have achieved this success without them.

NOV/DEC 2015 | 88 | WWW.FRANCHISEBUSINESS.COM.AU

FR0115_000_WAT2

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

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

Tired of working on the tools or in an ofﬁce for someone else? If you love the outdoors and have a passion for customer service, you could be running your own successful franchise business with Swimart.

1 Own

2 Own a Swimart

YOUR OWN Swimart Store

Mobile Pool Services business

With over 30 years experience in the industry and a huge network of independently owned stores, we’re Australia’s leading pool and spa specialist. A Swimart franchise offers: - Strong gross proﬁts and low operational costs - Low ﬁxed fees - Comprehensive training - Professional support including marketing, TV advertising and business training.

A brand new business opportunity from Swimart. - In specially selected regional and rural areas - At last, the chance to open a business in the area you love to live in! Get with the strength When you become a Swimart franchisee, you’ll beneﬁt from: - Strong brand awareness and a powerful marketing program including TV advertising hosted by Susie O’Neill - Comprehensive initial and ongoing training through the Swimart Training Academy - Exclusive Territory - The backing of a franchisor with 30 years in the business. - Customer database of pools in your area.

ng “Nothing beats achievi success in the pool” Susie O’Neill

To ﬁnd out more, call Chris Fitzmaurice on 02 9898 8608

swimartfranchise.com.au SWI2243-R

ISL 207 ADW i dd 1

14/04/14 7 56 AM

FR1115_090

2015-11-09T10:10:36+11:00

MAKING

WAVES

here’s a new mobile business in the franchising scene: Waves Detail Pro, a mobile car detailing system from Queensland.

Managing director of Waves Detail Pro Daniel Fuchs explains how Waves is capitalising on the mobile franchising industry. “Our passion started in the mobile detailing industry, for us now it’s all about franchising as a business model to take a market share in an industry that we believe is not being done professionally. So our focus is offering super high degree of quality training to ensure that our franchisees are satisfying all the needs of the user: right from the person who wants the

car wash right through to the person who wants the new car protection package. “We call those ‘multiple profit centres’, which means we have happy franchisees because they have a super high earning potential using their multiple skillset and it’s also great for the end user because they’ve got a one-stop mobile shop – and that’s really important for credibility and authority,” Fuchs says. Recruiting the right people for the job can be a difficult task in any franchise business. With a long list of preferred characteristics already in mind, it can make finding the right person to welcome to the team a gruelling process. For Waves, the mobile detailing industry is one that sorely needs a revived business witha refreshed model catering to all sorts of vehicle lovers. Finding the right franchisees is crucial for the business to work

as intended: to create and build on relationships with customers while providing what Fuchs calls a world-class mobile detailing service. “We’ve just developed an online strategy for recruitment, working with a couple of different companies to bring that online and especially through Facebook marketing and social media. Social media is huge for us, no one in our space is really utilising it in a big way. “We look for motivation in our potential franchisees but we most importantly want people who love people. We’re services based – it has to be first and foremost about satisfying the needs of the individual and developing a relationship. There needs to be a certain degree of people skills and reliability,” Fuchs says. The car wash and detailing industry is worth over $525 million.

NOV/DEC 2015 | 90 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_000_MAD

2015-11-09T10:33:07+11:00

• • • •

! Franchise_Magazine_Advert_175x245mm.indd 1

qUIrE No w

4/11/2015 10:28 am

FR1115_092

2015-11-09T10:10:36+11:00

A breath of

fresh air

fter 15 years working as a diesel fitter in a coal mine, Queenslander Terry Comiskey decided it was time for a change.

He had spent six years saving money and searching for the right franchise business that would suit his pocket and his skills. Then he came across the GutterVac website. “Gutter-Vac ticks all the boxes for me,” he says. “I can work for myself, I can operate outdoors and build a business in my local

area. Even so, I reckon it’s dealing with customers that I am looking forward to the most.”

will set him up for years to come. “This is for me and my future and I will work very hard to build it into a household name.”

Having toiled underground for so long, Comiskey’s first day on the job saw him working on a roof at an aged care facility in Yeppoon.

WHY BUY A FRANCHISE?

WHAT IS THE BIGGEST CHALLENGE AS A FRANCHISEE? “I’m still taking it all in and feel I couldn’t tell you yet what’s the biggest challenge of becoming my own boss. Give me three months and I’ll tell you.” Comiskey sees his new role as a franchisee

He explains it is the back-up in a franchise system that really appealed to him. “I looked at franchises because they give you support and help you work out things that come up in day to day operation of a franchise. “Gutter-Vac is excellent with support and help which is always good when you are starting up. I’m very happy with my choice and I feel it is up to me to make it work.”

NOV/DEC 2015 | 92 | WWW.FRANCHISEBUSINESS.COM.AU

FR0715_000_YOU

2015-06-24T11:17:38+10:00

Grow your business through property investment with Property Club Franchises offered for the first time • nearly 5,000 Property Millionaires Club members and counting “Property Club is wholly dedicated to providing Australians with the opportunity of a better life through property investment. To celebrate 21 years in property, we are offering a limited number of Property Club franchises. This is a unique offer to be part of an organisation that has over 80,000 members and we’ve helped more people create million dollar property portfolios than any other property investment organisation with almost 5000 members now in our Property Millionaires Club. Take advantage of this exclusive opportunity by contacting us today.”

TRY E BEFOR YOU BUY

Kevin Young Founder and Director of Property Club

Visit www.propertyclub.com.au/

property-club-business-opportunities/ Call 1300 663 282 FRANCHISE FULL - New file.indd 1

3/06/15 4:30 PM

FR1115_094

2015-11-09T16:49:22+11:00

How Australian Skin Clinics

GREW AND GREW

eb Farnworth-Wood heads up the fastgrowing Australian Skin Clinics business that has been ranked seventh in the BRW Fast Starters list for 2015. In this Q&A she reveals her tips for managing a speedy expansion in a franchise set-up.

Q. WHAT WERE YOUR EXPECTATIONS WHEN YOU STARTED THE BUSINESS? A. I saw an opportunity to change the way consumers experienced and viewed the cosmetic industry and set out to make

that a reality. We spent time developing the model, creating efficiencies and concentrating on the treatment offering. Our original plan was to run one pilot site for 12 months and then assess whether it had worked. My expectations were well and truly exceeded with our first clinic being so successful that within a few months we opened another. Q. WHAT ROLE HAS INNOVATION PLAYED IN YOUR GROWTH AND SUCCESS? A. I’ve learned that owning a successful business isn’t necessarily about being the first, it’s about being the best. The best at what you do. We’re always looking for ways we can innovate our offering. The obvious innovations are the technologies we use, our focus on research and develop-

ment and the way we deliver treatments, but there are less obvious innovations too. We have had to be innovative at every single step, from restructuring the business model to equipment, training and marketing. Our forward thinking mentality and organisational culture of innovation and excellence has seen the company grow rapidly since opening our first franchise clinic just four years ago. Q. WHAT HAS BEEN THE BIGGEST CHALLENGE FOR THE BUSINESS? A. I had to learn about franchising quickly, but I love learning new things, so I found this to be a positive experience. We launched post GFC at a time when

NOV/DEC 2015 | 94 | WWW.FRANCHISEBUSINESS.COM.AU

FR0915_000_GLO

CMAR0107-FRANCHISE-MAG-FP-AD-FA.indd 1

2015-09-09T10:20:26+10:00

4/09/2015 2:14 pm

FR1115_096

2015-11-09T16:49:22+11:00

banks were not lending money, so we selffinanced our growth.

FOUNDER DEB FARNWORTHWOOD

Our team grew from seven to 27 in the space of a few months. This presented a challenge in terms of training, development and organisation but it was essential to be able to support the brand as it expanded. Q. HOW HAVE YOU MANAGED SUCH FAST GROWTH? A. We made sure we spent time developing the model, creating efficiencies and concentrating on the treatment offering. I am a believer in careful planning and coming from a background of both health and multi-site retail businesses, I had a clear picture of what we needed from the onset. Every spare dollar along the way has been re-invested in either equipment or staff to ensure that our support structure meets the needs of the franchisees. We have managed to secure an effective supply chain providing value for our franchisees and also established a training academy to strengthen our recruit-

ment process. Q. HOW HAS THE BUSINESS FUNDED ITS GROWTH? A. We currently have no debt and have self-funded this journey. In the early days there were times when I didn’t draw a salary or when I tipped my personal bank

account back into the business but I always knew it would pay off in the end. Q. WHAT ARE THE DANGERS OF SWIFT GROWTH THAT YOU’VE MANAGED TO AVOID? A. The dangers of rapid growth include poor cash flow, falling standards and cust-

BUILDING, EQUIPPING AND MAINTAINING YOUR BUSINESS

Smarter Products and Service to keep your BUSINESS MOVING

CONSTRUCTION, SUPPLY & SERVICE | FREECALL 1300 720 622 | PO BOX 137, ZILLMERE QLD 4034 NOV/DEC 2015 | 96 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_097

2015-11-09T16:49:22+11:00

omer dissatisfaction and we have sought to avoid this. Even early on we were described as “hyper gazelles” because of the pace at which we were growing. In fairness though, I had deliberately overstaffed the franchise office so that there was no danger that we wouldn’t cope. I hired a team who shared the vision, understood the system and replicated what I had taught them. My team are an amazing group of individuals who have pulled together and overcome every hurdle. We have more sophisticated systems and structures than many established franchises and are constantly striving to do better. Q. HOW LONG DO YOU EXPECT THIS RATE OF GROWTH TO CONTINUE? A. Beauty treatments have been around for centuries - Cleopatra was known for her goat’s milk baths. The current accelerated growth comes at a time when it’s now OK to spoil yourself. There is great emphasis on looking good, combined with technological advances in treatments. I believe that the industry will continue to develop

new technologies and products, but the current rapid growth will continue for 10 to 15 years.

to have options 3. Learn everything about everything you can - you don’t know when you will need it

Q. HOW HAS THE COMPANY CHANGED IN ITS FOUR YEARS?

Q. HOW HAS THE COMPANY’S CULTURE HAD AN IMPACT ON THE BUSINESS SUCCESS?

A. Size is the obvious one - we’ve gone from a staff of 16 to over 200. Our clinic model has changed only subtly but our standards, training and philosophies remain the same. Our head office team has gone from seven to 27 in the last 18 months and we now have our own training facility (The Advanced Skills Academy) and even our own shop-fitting company. Q. WHAT IS YOUR BUSINESS PHILOSOPHY? A. I believe that to be successful in anything you have to love it but also that you don’t need to be the biggest but definitely the best. I have a three point policy to life: 1. Never have regrets - just make sure you make the best decision you can based on all the information available at the time 2. Always have plan A, B and C - it’s good

A. Culture is very important and we invest heavily in maintaining it. All our systems, including training, meetings and communications are geared towards improving our fun factor. The staff post selfies on our internal communication hub and we employ a number of gamification strategies to keep fun in the work place. Q. IF YOU HAD THE TIME AGAIN WHAT WOULD YOU DO DIFFERENTLY? A. I would be less hard on myself! I am my own biggest critic and need to give myself more space. Q. WHAT HAS BEEN THE BEST LESSON LEARNED? A. Employ the right team, set expectations high and you will achieve your goals.

NOV/DEC 2015 | 97 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_098

2015-11-10T16:47:03+11:00

THE

Q&A with Serge Infanti

INSIDER

THE INSIDER

who taught me the importance of trying to be EPIC every day.

SERGE INFANTI, MANAGING DIRECTOR, FOODCO - JAMAICA BLUE/MUFFIN BREAK

Q. IF YOU HAD AN UNEXPECTED THREE HOUR LUNCH BREAK, WHAT WOULD YOU DO?

Q. WHAT’S THE FIRST THING YOU CHECK ONLINE IN THE MORNING AND WHY?

A. I’d be outdoors; I’d go for a walk around Centennial Park which is near our office.

A. I usually look at our group and specific stores’ sales performance and I also check our centralised community website, Cubes.

Q. WHAT’S YOUR SIGNATURE DISH?

Q. WHO DO YOU ADMIRE IN THE FRANCHISING SECTOR AND WHY? A. I admire many people but they’re not necessarily in the franchising sector. For me, franchising is simply another vehicle that delivers the basic fundamentals of business through leadership, meeting what the customer values, and returning a satisfactory return for all investors. I try and do so through a value system of excellence, passion, integrity and camaraderie – that is, EPIC. The people I admire most are those

A. Hmmmm, as a foodie this is tough as I have many and I can’t split them - linguine marinara, gnocchi Bolognese and vitello tonnato. Asking an Italian this question is like asking a child in a toy store to pick their favourite toy. Impossible! Q. HOW DO YOU STAY FIT AND HEALTHY? A. By running between meetings, which does happen regularly, and I also do some gardening and bike riding which doesn’t happen enough.

NOV/DEC 2015 | 98 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_000_POS

2015-11-04T14:04:05+11:00

Dream to start your own Business? The Business Behind Your Business Graphic Design & Web Services Printing & Copying Services Packing & Shipping Services Mailbox Rental Services Business Support Services Marketing Solutions Services

Create I Print I Ship I Support I Grow

• • • • • • • • • •

PostNet Area Representative (Western Australia) Tjandra Setiawan: 0405 458 188 tjandras@postnet.com.au

Established and Proven Franchise System Over 750 Franchises Worldwide In Industry Since 1983 Franchising Since 1992 Multi Products/Services Franchise Five Days Week Business - No Weekend Work No Experience Necessary Minimal Employee Base Low Inventory Business World Class Comprehensive Training & Ongoing Support

PostNet Area Representative (Queensland) Gary Khoo: 0449 997 893 garyk@postnet.com.au

PostNet Australia Pty. Ltd. Robin Lau: 0490 338 427 / 0415 189 593 robinlau@postnet.com.au

www.postnet.com.au / www.postnetfranchise.com.au

FR0915_000_MAR

2015-11-06T15:03:53+11:00

SPECIALIST FRANCHISE LAWYERS The new Franchising Code of Conduct commenced 1st January 2015 and the ACCC has indicated they are actively monitoring compliance in the industry! Minimise your risk and ensure your compliance to avoid fines and penalties. We are assisting local and international Franchisors. We provide advice in relation to: 1. International Franchisors and assist overseas companies to establish business in Australia 2. Master Franchising Rights 3. Dispute Resolution - Solution and Strategies 4. Franchisee Advice - Fixed Fee Reports 5. Sale or Purchase of Franchise Systems 6. IP/Trademark Advice 7. Company Structure & Tax Advice 8. Business Modelling - Licensing and distribution 9. Employment Law We have a network of franchise consultants to assist our clients to establish their franchise system. Member: IFLA (International Franchise Lawyers Association) and US Commercial Service and FCA (Franchise Council of Australia) We oďŹ&#x20AC;er fixed fees based on the scope of work, so our clients can budget with certainty for their legal costs.

Contact: Robert Toth p: +61 03 9604 9410 m: +61 412 673 757 e: rxt@marshmaher.com.au

Marianne Marchesi p: +61 03 9604 9416 m: +61 402 212 954 e: mim@marshmaher.com.au

FR1115_101

101

2015-11-10T17:03:59+11:00

STAR PERFORMERS

et’s celebrate! We love to see top performers recognised, and the Franchise Council of Australia recently honoured franchising’s best at its Excellence in Franchising Awards gala dinner at the RACV Royal Pines Resort on the Gold Coast.

ing as she was inducted into the Franchise Hall of Fame. Boost Juice’s international arm was also successful on the night, taking out the award for Excellence in International Franchising for its international expansion strategy.

THE WINNERS The big winner on the night was Boost Juice Bars, which was named Australian Established Franchisor of the Year. “Winning an award like this means a lot. Being recognised by your peers is fantastic and it’s also good to know that we’re heading in the right direction,” said Boost Juice Bars CEO Scott Meneilly. Boost Juice founder Janine Allis, who has grown the business from her kitchen bench to a franchise of more than 400 stores across 13 countries, was recognised for her outstanding contribution to franchis-

Australian Established Franchisor of the Year – Boost Juice Bars Australian Emerging Franchisor of the Year – Laubman & Pank International Franchisor of the Year – Fastway Couriers Australia Multi-Unit Franchisee of the Year – Irene and Ian Hughes, Poolwerx (WA) Single Unit Franchisee of the Year, two or more staff – Britt and Ben Diggins, Bakers Delight, Sturt Mall, Wagga Wagga (NSW)

Single Unit Franchisee of the Year, less than two staff – Brent Giblin, Mister Minit, Shellharbour (NSW) Franchise Woman of the Year – Marlies Hobbs, Paleo Café Field Manager of the Year – Laxman Bhardwaj, Chocolateria San Churro (VIC) Excellence in Marketing – OPSM Excellence in International Franchising – Boost Juice International Franchise Innovation – Specsavers Franchisor Social Responsibility – OPSM Franchisee Community Responsibility and Contribution – Alexandra Lincoln, John Bleakley and Kim Taylor, PRDnationwide Real Estate, Toowoomba City (QLD) Franchise Hall of Fame Inductee 2015 – Janine Allis, Boost Juice Bars

NOV/DEC 2015 | 101 | WWW.FRANCHISEBUSINESS.COM.AU

102

2015-11-10T17:35:46+11:00

IMAGES: DIPH PHOTOGRAPHY

FR1115_102

The awards comprised 14 categories (including Supplier of the Year). To get to the finalist stage, each submission was assessed by a selection of expert judges drawn from the franchising sector and entrants were required to highlight their challenges, goals and achievements. Each category had specific criteria that included aspects such as planning, leadership, franchise citizenship,training, risk management, professional development and systems management.

FR1115_103

101

2015-11-10T17:03:59+11:00

For the franchisee, field manager and franchise woman of the year awards there were regional events to find state and territory winners to go through to the national final. And what a night it was! Supporters, friends, family and the franchising community celebrating in a beautiful setting, with entertainment, post-awards dancing and an after-party. Congratualtions to all the finalists and the winners on the night.

FR1115_104

104

2015-11-09T16:35:25+11:00

LEGALESE

How

UNFAIR CONTRACT MARIAN NGO

TERMS PROTECTIONS will affect you

is a lawyer in the corporate advisory and franchising team at MST Lawyers.

here is plenty of documentation to work through when you buy a franchise: the disclosure document, franchise agreement, any leasing contracts. And now thereâ&#x20AC;&#x2122;s a new legal element to consider in franchising as the Unfair Contracts Term comes into effect.

The Australian Consumer Law and the Australian Securities and Investments Commission Act 2001 contain provisions which protect individual consumers from unfair contract terms in a standard form contract. The protections are available where one party to a contract for goods, services or land is an individual and the individualâ&#x20AC;&#x2122;s acquisition is for personal, domestic or household use. For example, a consumer entering into a contract with a telecommunications provider would be protected by the unfair contract terms provisions, if some of the terms in the contract are proven to be unfair.

2. the contract is a small business contract; and 3. the term in the contract is unfair. If the above requirements are satisfied the unfair contract terms provisions will also apply to a wide range of other contracts, such as supplier contracts, lease agreements and manufacturing contracts. However this article focuses just on franchise agreements.

The Bill extending the unfair contract terms protections to small businesses passed parliament on 20 October 2015. The Bill will come into force one year from the day the Bill receives Royal Assent.

SO WHAT DOES THE BILL MEAN FOR FRANCHISEES? The Bill gives courts the ability to declare terms contained in standard form contracts between businesses void, if they are deemed unfair. It is acknowledged that small businesses, like consumers, are vulnerable to unfair terms in standard form contracts.

It is expected that many franchise agreements will fall within the definition of small business contracts

When in force, these laws will extend to unfair terms in franchise agreements if the following requirements are met. 1. the contract is a standard form NOV/DEC 2015 | 104 | WWW.FRANCHISEBUSINESS.COM.AU

FR0915_000_SPE

2015-09-15T15:31:29+10:00

FR1115_106

104

2015-11-09T16:35:25+11:00

LEGALESE

WHAT IS STANDARD FORM?

agreements will fall within the definition of small business contracts.

Typically a standard form contract is not subject to negotiations between the parties, in this case the franchisee and franchisor, and is offered on a ‘take it or leave it’ basis. Other elements of a standard form contract can be if the contract is prepared by (in franchising) the franchisor, before any discussion with the franchise buyer or where the terms of the contract do not take into account any particular characteristics.

In counting the persons employed by a business, casual employees are disregarded unless employed by the business on a regular or systematic basis. Again, this increases the likelihood of franchise agreements meeting the criteria, as many franchisees employ casual staff members, especially in the retail and hospitality industries.

THE MEANING OF A SMALL BUSINESS CONTRACT A franchise agreement will be deemed a small business contract if:

Whether or not the terms of a contract are unfair will depend on the particular circumstances of each contract. Australian Consumer Law states that a term of a consumer contract is unfair if it:

✱ at the time of entering the contract, at least one party to the franchise agreement is a business which employs fewer than 20 people; and ✱ either the upfront price payable is less than $300,000 regardless of the term or, as is more likely in franchising, the contract is for more than a one year term and the upfront price is less than $1m.

✱ would cause a significant imbalance in the rights and obligations arising from the contract; ✱ is not required to protect the legitimate interests of the advantaged party; and ✱ would be detrimental (whether financial or otherwise) if it was applied or relied on.

Most franchise agreements are for a five or 10 year term and the upfront price payable to the franchisor is very often less than $1m. Once the new laws have taken effect, it is expected that many franchise

All three of the above elements in the unfairness test must be proven for a court to decide that a term is unfair. The courts must also consider the contract as whole and whether the term in question is

WHAT DOES UNFAIR ACTUALLY MEAN?

NOV/DEC 2015 | 106 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_107

104

2015-11-09T16:35:25+11:00

LEGALESE

expressed in reasonably plain language, legible and presented clearly. Potential terms that may be unfair include terms that permit only one of the signatories to: ✱ vary the terms of the contract; ✱ renew or not renew the contract at sole discretion; or ✱ terminate the contract without reason.

WILL THESE PROTECTIONS APPLY TO CURRENT FRANCHISE AGREEMENTS? Provided that the above requirements are met, the unfair terms protections will apply to standard form, small business contracts signed after the date that the laws take effect. It is important for franchisees and franchisors to note that the laws will not only apply to new contracts, but renewals or variations to existing franchise agreements. It is important to note that if some of the terms in a contract are found to be unfair this will not invalidate the entire contract. To the full extent possible, the remaining terms will be enforceable.

WHAT DOES THIS MEAN FOR FRANCHISING? The new laws will not take effect until at least one year from now.

for ady

Cho

Existing franchisees may see amendments to their franchise agreements trickle through when the time comes to renew their franchise agreements. Alternatively, franchisors may choose to refrain from acting on potentially unfair terms across the franchise network, to maintain consistency in how franchisees are treated. Other businesses that sell goods and services to franchisees using standard form contracts, such as suppliers of stock or equipment, may also be caught by the new laws. As a result, some terms of their standard terms and conditions may no longer be enforceable. Where franchisors are seeking to establish supplier agreements to secure favourable terms, it will be necessary to check whether the agreements could be deemed as standard form, small business contracts. The inability to enforce terms with suppliers of the franchise system could have impacts to the franchise network, not just the franchisor.

ure

a fut

s’

et a s swe

‘a

However, franchisors should begin reviewing their franchise agreements as amendments may be required to ensure that vital terms of the franchise agreement are not at risk of being deemed unfair and unenforceable.

? e t a l co

Intimate dessert and coffee lounge • Long established South Australian Icon • 9 fantastic stores & growing • Proven business model • Handmade award winning products • Excellent training and support • Master Franchises available • Prime locations available •

FRANCHISING

NOW For more information contact Duncan Powell on 0407 059 603 Email: duncan@cocolat.com.au http://www.cocolat.com.au/franchise-opportunities

NOV/DEC 2015 | 107 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_108

108

2015-11-10T08:39:50+11:00

TRENDS

THE ROLE OF

I N N OVAT I O N IN FRANCHISING

ANDREW TERRY Professor of Business Regulation, The University of Sydney Business School

here are no doubt those for whom the title of George Ritzer’s book, The McDonaldization of Society, resonates as they watch the relentless expansion of franchising. For these people - I have their names! - franchising is the antithesis of innovation. Franchising is, to them, simply the expression of formulaic uniformity - the routine rolling out of a distinctive business concept across city, state, and even national borders which is harmful to cultural diversity. The standardised, predictable and uniform look and feel of both the product and its delivery is not always welcomed.

Standardisation and uniformity are of course inevitable in business format franchising - they both characterise and drive its development. While we may take this practical reality for granted today we should not forget that the development of franchising little more than half a century ago was a massive innovative development. The US House of Representatives Committee on Small Business has described franchising as “one of the greatest inventions of western capitalism”. William Davis, author of The Innovators, has described franchising as “the most dynamic business arrangement since the emergence of the corporation”. Franchising was born from need and innovation, as a solution to the challenges that those seeking to develop disciplined distribution systems faced, and its ongoing development is one of continuing innovation. The writer has written elsewhere that franchising’s capacity for reinventing itself - to continually adapt to changing circumstances and market conditions – is a major factor in its increasing global influence. New forms of franchising have evolved from the original model to address particular distribution challenges - master/sub franchising, area development franchising, co-branding/combination franchising, multi-unit franchising, multi-concept franchising, multi-brand franchising, community franchising, social franchising, freedom franchising being the obvious examples. It is franchising’s capacity for adaption and innovation which drives its relentless development. Innovation in franchising is of course not limited to the franchising strategy itself – it is an essential prerequisite for all franchise systems. Australia’s 1000+ franchise systems today serve every industry sector. The low hanging fruit has long been picked. A prospective entrepreneur wanting to establish a hamburger or pizza

chain for example will have to do more than simply offer hamburgers or pizzas. Prospective franchisees and customers demand much more. The concept needs to be shaped by and infused with innovation across all aspects of the operation. It is in this process of course that an answer to the McDonaldization movement lies. Without franchising – without a strategy that enables small business to compete effectively against a limited number of larger and entrenched competitors – the marketplace would be a lot blander, more concentrated with fewer competitors, and offer much less diversity. William Davis suggests – and few in the franchise sector will disagree – that although innovation is the most exciting part of business life it can also be one of the most frustrating but “there is nothing to compare with the thrill of finding a new idea and turning it into a concrete reality”. While no sector or type of organisation has a monopoly on innovation the franchising sector is well placed to exploit the innovation advantage. The entrepreneurial underpinning of franchising supports and nurtures innovation. Large companies of course can, and do, innovate – in fact the massive R&D outlay required for innovation in some sectors effectively means that small companies will not lead the innovation game. But the bureaucratic structure that characterises many large corporations frequently acts as an obstacle to innovation. The smaller franchising company, headed by a founder with entrepreneurial flair, is usually more agile, more responsive, more flexible and more willing to try new ideas and develop innovative strategies to establish and entrench a market share. That new franchising systems develop to compete with the older, established and entrenched systems speaks loudly to the power of innovation.

NOV/DEC 2015 | 108 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_000_ZOO

2015-10-26T10:41:41+11:00

YOUR FRANCHISE. YOUR MUSIC.

Experience the effect great music has on your customers with custom branded playlists from Zoo Music. Subscribe to Zoo Musicâ&#x20AC;&#x2122;s 6 million song music catalogue and enjoy custom playlists created to suit your franchise style and customer base. Choose from Dance, Smooth Jazz, Top 40, Lounge and more. Add special branding and advertising options and you have your own music channel. Call the friendly team at Zoo Business Media and find out how you can get great music INCLUSIVE of public performance licensing from just $21 per week.

zbm.com.au

THE ZOO BUSINESS MEDIA GROUP

FR1115_110

108

2015-11-10T08:39:50+11:00

LEADERSHIP

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

Tips for a WINNING

STREAK W

hen you are considering a franchise purchase, what can you do to ensure your franchise gamble pays off?

When I was a kid my friend’s grandfather, Bob, was a retired racetrack grounds man and lived and breathed racing. Friday nights were spent at the trots and Saturday was race day. I tagged along to the races as an inquisitive eight year old and learned a lot during those expeditions. Bob used to say, ‘Just remember kids, life is full of gambles’. Going into business is a gamble. Even with the support of a franchise system – there are no guarantees a business will work. There are forces outside our control that can bring a business to its knees, or a ‘lucky break’ can propel a business to a level of success not thought possible.

From Bob, I learned ways we can stack the race in our favour and take informed risks. Maybe some of these tips will help you as you prepare to enter the race.

KNOW THE RACE Derby, stakes, oaks, hurdles, handicaps, maiden races and invitation races … the different races all have different rules, different ways to win. Bob’s advice always started with knowing the race you are running. ✱ How well do you know the race you’re about to join? ✱ What are the rules? ✱ Do you know how you ‘win’ the race? Is profit your measure? The satisfaction of being your own boss? Lifestyle? What does success look like for you? ✱ Do you understand and know the rules for running a business in Australia? What about the rules your franchisor will expect you to follow?

NEVER BET MORE THAN YOU ARE WILLING TO LOSE

Do you understand and know the rules for running a business in Australia? What about the rules your franchisor will expect you to follow?

It's a gamble, a roll of the dice. NOV/DEC 2015 | 110 | WWW.FRANCHISEBUSINESS.COM.AU

Back in the day we were each given $2 at the beginning of the night and Bob placed our bets for us [things were different then]. Here was the catch: we could spend the entire amount on lollies or we could bet with it. At the time $2 would buy a mountain of lollies. It was a tough call. I was conservative and would usually bet half and keep half for lollies. My friend would go hard, throw the entire $2 on a single race and either be the source of envy if she won, or suffer the torment of watching me eat my lollies if she lost!

FR0915_000_SNO_r

2015-09-11T14:50:35+10:00

JOIN THE

DREAM TEAM

Vendor finance now available* *Available to approved applicants.

We are looking for dynamic people who love dealing with others and are passionate about retailing. The Snooze brand has a strong history of over 30 years in retailing and has built a very solid franchise system. We provide franchise partners with a stable platform to start their business and offer support across the entire business including: • Marketing and Promotional Support

• Product Development and Buying Power

• Proven operating system that includes comprehensive product and sales training • Business Management support from our on the ground field team • Assistance in site selection and property negotiations • Business finance available to approved applicants

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

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

458455_Franchising Development Ad [175x245]_V2.indd 1

11/09/15 2:08 PM

FR1115_112

108

2015-11-10T08:39:50+11:00

LEADERSHIP

✱ How much are you willing to lose? ✱ Do you know the point when you will cut your losses and leave the race? ✱ What are the consequences of losing the gamble? ✱ What if you win? What will you do with your winnings?

DO THE RESEARCH Bob spent the lead up to every race researching and analysing the past performance of the horses, the trainers, the tracks and the jockeys. He knew so much about it. He could sprout facts about wins, losses, average earnings and stable mates. Bob asked questions of everyone from the guy selling tickets at the gate, to the jockeys and the trainers. ✱ How are you tapping into the knowledge, skills and experience of those already in the race? ✱ What about those who have been there and done that? Past franchisees or franchisors are a fantastic source of information. What can you learn from them? ✱ What other source of intel is

available to you? Think about all the people who have a business relationship with the franchisor. Have you spoken to suppliers who work the franchise? What information can you glean from the banks? Do the landlords value the brand? ✱ What about customers? What sort of online profile does the franchise have and are social media comments generally favourable? ✱ What filters do you have in place to fact and sense check the information that is shared with you?

FOLLOW YOUR INSTINCT From Bob I learned the importance of making an informed decision, gathering facts, analysing statistics. But no amount of analysis ever trumped Bob’s gut feel – if the statistics and numbers didn't feel right, he always followed his intuition.

big decisions? ✱ Do you have the confidence to back yourself?

PREPARE FOR WINNING AND LOSING Bob was fond of saying, ‘Sometimes lady luck is with you, and sometimes she’s visiting with someone else’. Despite our best efforts sometimes things go wrong, a gamble doesn’t pay off. Other times we win big. ✱ Do you have a good support network to help you through the losses? ✱ What about a cheer squad to help celebrate the wins? And keep you grounded when you’re riding high? My early gambling decisions were based on the colour of the horse and haven’t really evolved in the last 30 years.

Go on, back yourself.

But my business gambling strategy has certainly evolved.

✱ How aware are you of your gut feel? ✱ Do you have a process to make

The key is to do your homework, understand your boundaries, and enjoy the race.

NOV/DEC 2015 | 112 | WWW.FRANCHISEBUSINESS.COM.AU

I learned the importance of making an informed decision gathering facts, analysing statistics

FR1115_000_RED

2015-11-09T10:45:34+11:00

FR1115_114

114

2015-11-10T08:58:03+11:00

DIRECTORY

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.

directory of government and business associations, planning templates, business videos, and businessÂ 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

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.

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.

VISIT: WWW.ACCC.GOV.AU

Franchise Business is also the official directory of the FCA and lists franchising opportunities available in Australia and New Zealand. Potential franchisees looking to move into the franchising sphere can explore by location opportunities that currently exist in the market and enquire about the franchisor or brand.

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 finder, events calendar, grants and assistance finder, a

Financial, legal and business guidance are key components of the independent, authorative editorial that helps potential franchisees make their purchasing decision.

Users also have access to franchise consultants and advisors who can assist prospective or existing franchisees or franchisors with any legal, financial, education and training, IT and other services. VISIT: WWW.FRANCHISEBUSINESS.COM.AU

NOV/DEC 2015 | 114 | WWW.FRANCHISEBUSINESS.COM.AU

FR_Subs_FP_V2

F R0 1 1 5 _ 0 0 1

2015-09-15T14:29:21+10:00

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

F R0 3 1 5 _ 0 0 1

2 0 1 5 - 0 3 - 0 3 T1 7 : 5 7 : 1 8 + 1 1 : 0 0

F R0 7 1 4 _ 0 0 1

2 0 1 4 - 0 7 - 0 3 T2 2 : 3 5 : 0 1 + 1 0 : 0 0

Sweet indulgence

YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE | WWW.FRANCHISEBUSINESS.COM.AU MAR/APR 2015 VOL.28/NO.2

YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE | WWW.FRANCHISE.NET.AU | JUL/AUG 2014 VOL.27/NO.4

SOUL

WHAT TO LOOK FOR IN A FRANCHISE AGREEMENT

TRADER

AUSTRALIA’S TASTE FOR DESSERT DESTINATIONS

Investing with passion

The new rules in franchising

Should your family bankroll your business?

Cheat’s guide to scams

6 TIPS FOR FINANCIAL CONFIDENCE:

DON’T PLAY THE BLAME GAME:

STEP INTO A NEW LIFE:

p.48

p.26

p.90

Get your money into shape early

Working with your partner

Gyms get fit for the future

Sandwich THE

SPECIALIST AUS $6.95|NZ $7.95

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

P.120

AUS $6.95|NZ $7.95

WWW.FRANCHISE.NET.AU

BEWARE!

P.36

SECTOR REPORTS, WHAT YOU NEED IN YOUR LEASE, LOCAL AREA MARKETING TIPS

TREND REPORTS, MARKETING TIPS, LEGAL INSIGHTS

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

HOME LOANS

P.28

WWW.FRANCHISEBUSINESS.COM.AU

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

WWW.FRANCHISEBUSINESS.COM.AU

LAW ENFORCER

JUL/AUG 2014

MAR/APR 2015

JAN/FEB 2015 AUS $6.95|NZ $7.95

FRANCHISING

YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE | WWW.FRANCHISEBUSINESS.COM.AU JAN/FEB 2015 VOL.28/NO.1

FRANCHISING

Franchising Franchising Franchising

HOME ADVANTAGE: WAYS TO WORK AND SUCCEED AT HOME P.54

WHERE IS THE PROFIT? EVALUATING THE FRANCHISE OPPORTUNITY

SPACE PATROL: HOW SECURE IS YOUR TERRITORY? P.66

P.28

AUSTRALIA’S MOST TRUSTED TITLE IN FRANCHISING Ensure you get every copy! The leading publication for those looking to buy into the $144 billion franchising sector. Each issue you’ll receive: • Independent and essential financial, legal and business advice • Market sector and industry reviews • Inspirational success stories

SUBSCRIBE for just

$45

and take the first step towards becoming your own boss

Call us on 1300 360 126 or visit www.franchisebusiness.com.au

FR1115_116

114

2015-11-10T08:58:03+11:00

GLOSSARY

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

SITE: a brand

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

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

NOV/DEC 2015 | 116 | WWW.FRANCHISEBUSINESS.COM.AU

FRXXXX_House_Ad_V2

2015-09-15T15:06:27+10:00

Visit the home of Franchising magazine online at FranchiseBusiness.com.au

nload Plus dow guide: E E R F r u yo the Choosing chise right fran • Access information and resources in our Knowledge Centre • Research franchise opportunities • Filter opportunities by location, category and investment level • Get mobile! Our mobile compatible site makes it easy to enquire wherever you are

FR1115_118

114

2015-11-10T08:58:03+11:00

CHECKLIST

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

Are you confident in the franchisor?

What are the franchiseeÂ and franchisor obligations?

Have you seen a disclosure document?

What training is available and who pays for it?

Have you evaluated the financial returns?

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

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

What marketing will the franchisor implement?

Have you worked out your operating costs?

Who pays for the marketing?

Do you know the term of the agreement?

What is the dispute resolution process?

Is the business operating from fixed or mobile premises?

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

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

Can you assign the franchised business?

Are you restricted in your product purchase?

How can the franchisor or franchisee terminate the Franchise Agreement?

Are you required to reach a minimum performance level?

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

NOV/DEC 2015 | 118 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_119

114

2015-11-10T08:58:03+11:00

CHECKLIST

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

✓

Book franchisee training

✓

Sign the lease or licence agreement

Research your market

✓

Lease vehicle

Conduct due diligence on your franchisor

✓ ✓

1-3 MONTHS AHEAD

✓ ✓ ✓

Speak to franchisees

✓

Read the disclosure document

✓

Research the location

✓

Do a business plan

✓

Get legal and accounting advice

✓

Organise finance and working capital

✓

Decide on and set up your business structure

1-4 WEEKS AHEAD

✓ ✓

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

✓

✓ ✓ ✓ ✓ ✓

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

NOV/DEC 2015 | 119 | WWW.FRANCHISEBUSINESS.COM.AU

FR_Journey_FP_V1

2015-04-30T11:56:58+10:00

START YOUR

JOURNEY Thinking about buying a franchise? Leverage our countless years of knowledge and industry expertise to help find the right franchise for you!

Download our FREE 6 step “Buying a Franchise” education journey at Franchisebusiness.com.au/subscribe

FR1115_121

121

2015-11-10T09:07:40+11:00

A-Z LISTINGS

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

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

Establishment costs: $90,000

Start up costs from: $47,000 + GST

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

PROFILE: Looking for a franchise with on-going repeat business, large territories and access to an existing client base to get you started? ATS are Australia-wide specialists in Electrical Testing and Tagging in accordance with AS/NZS 3760:2010. Providing expert technical, admin, business and sales support, access to our National client base and comprehensive on and off-site training, ATS are committed to helping its 45 franchisees grow profitable and successful businesses. No prior electrical experience is required - just a passion for safety and a commitment to growing your business. With low entry fees and minimal franchisee administration, an ATS franchise may just be the opportunity for you.

Phone: 1300 793 209 Contact: Alex Forbes franchise@batteryworld.com.au www.batteryworld.com.au

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

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

Start up costs from: $200,000 + GST PROFILE: Join the leading battery retailer in Australia! Battery World is embarking on a new era of rapid expansion and provides franchisees the chance to be your own boss but have the security of a national market leader with 18 years of stable growth behind it. Count the number of batteries you rely on every day. Now, multiply it by 9,117,033* households. Whatever figure you come up with it’s a very compelling reason to join Battery World, the nationally established franchise that a growing number of Australians rely on for their everyday battery needs. Battery World stores carry a product range of over 8,000 batteries for everything from mobile phones and laptops to vehicles and boats. With over 88 stores throughout Australia we are the largest and most comprehensive retail franchise network focused on the battery category. Franchises are currently available in NSW, VIC, WA, QLD, SA and TAS for motivated individuals with strong communication skills and a passion for retail. (*Source: Australian Bureau of Statistics, number of private dwellings in Australia 2011)

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

Phone: +61 41 220 5380 Fax: +61 2 6291 6710 Contact: John Longmire john@blackdotsolutions.com.au http://www.blackdotsolutions.com.au/ PROFILE: Black Dot Solutions is here to help you manage your world! Introducing the Communicate. Interact. Motivate. (C.I.M) App based platform.

PROFILE: Benga Designs specialise in the design, manufacture and installation of custom made signage for retail shopfitting and national franchises, including but not limited to 3D illuminated signage, plastic fabrication, large format printed graphics and vehicle wraps. We also produce a large range of “point of sale” products such as banners, flags, A-frames and corporate stationery. Our success has been directly attributed to Benga’s refined project management skills. We pride ourselves on the attention given to upfront planning, communication and liaising with our clients and shopfitters. Benga Designs is a proud member of ASOFIA, ASGA, BAA, DIA and FCA.

Key features include: • • • • • • • • •

Instant communication with front line staff Interactive eLearning experiences and induction processes Auditable compliance tools Documents and video library including remote form submission Gamification of key performance indicators Innovative customer engagement and marketing Fully customisable to your brand No lock in contracts Readable on all devices

Join our growing number of franchise partners already using the C.I.M platform. For an obligation free consultation contact Black Dot Solutions today and don’t forget to ask us about our marketing App which turns every customer into a mystery shopper!

NOV/DEC 2015 | 121 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_122

121

2015-11-10T09:07:40+11:00

A-Z LISTINGS

Phone: 1300 99 55 12 Contact: Gavin Trewin gavin@buyaustralianproperties.com.au www.buyaustralianproperties.com.au /welcome/ Start up costs from: $75,000 plus GST

Phone: 1300 Cafe2U (1300 223 328) Fax: 02 9451 2105 Contact: Os Castaneda, Sales & Franchising Manager franchises@cafe2u.com.au www.cafe2u.com Start up costs: $130,000

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

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

PROFILE: Cafe2U is Australia’s first and most successful mobile Café system. With over 250 franchises worldwide the business is rapidly growing due to a simple and proven business model. Cafe2U franchisees now have access to the unique “Acceleration Package” which fast-tracks success. This includes an experienced Franchise Development Manager to launch the business alongside the new franchisee in their own exclusive territory. Cafe2U builds a customer run that delivers a minimum of $500.00 a day before the Franchisee operates solo. The business is HACCP certified and has a ‘no compromise’ attitude when it comes to quality. This includes the Mercedes vehicle, commercial equipment and fitout, branding and marketing strategies and dedicated events co-ordinator. If you are ready to take control and enjoy working with people, a Cafe2U franchise provides you the perfect system to create your own destiny.

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

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

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

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

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

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

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

Apply online today in less than 10 minutes.

Call us for an obligation free discussion.

Phone: 0407 059 603 Contact: Duncan Powell duncan@cocolat.com.au www.cocolat.com.au

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

Start up costs: $200,000 +

PROFILE: “Now Franchising” At Cocolat we pride ourselves in our handmade artisan Products – Deserts, Chocolate Truffles, Gelato and Coffee. Our Team of Chocolatiers and Bakers use only the finest of ingredients in our full production kitchen based in the beautiful Adelaide Hills. Cocolat is a popular South Australia Icon which has just opened up their first store in St. Ives, Sydney.

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

Now Franchising throughout NSW, VIC, SA, QLD, WA, NT and TAS.

NOV/DEC 2015 | 122 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_123

121

2015-11-10T09:07:40+11:00

A-Z LISTINGS

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

Phone: 1300 131 888 Contact: Ashleigh Williams Franchise.recruitment@dominos.com.au www.dominosfranchise.com.au Start up costs: $250,000

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

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

Phone: 1800 373 263 04 57575727 Contact: Cam Hadlow cam@dreamdoors.com.au www.dreamdoors.com.au

Phone: +61 7 3036 1152 Contact: Karen Prescott karen.prescott@egnatium.com www.egnatium.com Start up costs: $100,000

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

Phone: 1300 FASTWAY Fax: 02 9264 4966 fastway.com.au Start up costs from: $25,000

PROFILE: Egnatium is a trademark designed by Egnitus Holdings Pty Ltd. Egnitus Holdings Pty Ltd is a leading B2B franchisor that has established a reliable network of franchisees within Australia, South East Asia and the Middle East. We are one of the first ever companies to provide a combined set of productivity solutions including software, consulting, coaching implementation and training, aiming to become a global player in B2B productivity solutions and to ensure that our clients can benefit from a global network with a local presence. Through a suite of packages on: • Learning management • Strategy management • Experience management • Competency management • Appraisal management Used separately or combined, you can have the help and support to achieve success by improving and increasing productivity.

Phone: 0447 891 158 Fax: (02) 8079 6174 Contact: Greg Prussia greg.prussia@firstclasscapital.com.au www.firstclasscapital.com.au Start up costs: $40,000 + GST

PROFILE: Run your own rewarding business and take control of your future as a Fastway Courier Franchisee. As a market leader in nationwide courier services, our multi-award winning franchisees enjoy: t Guaranteed income package* t Low start up costs t No weekend work t Ongoing business support & training t Exclusive territories t Perpetual franchise agreement with no ongoing fees

With over 28 existing Franchise Partners and growing, First Class Capital is offering franchise opportunities nationally for savvy business and sales professionals wanting to build their own successful franchise in the lucrative trade finance sector.

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

PROFILE: First Class Capital is one of Australia’s most innovative lenders, specialising in the delivery of trade finance and working capital solutions to small business.

A background in finance is not necessary but an enthusiastic, hungry to succeed personality is. As a Franchise Partner you receive comprehensive training, access to state of the art online systems, regular regional and national advertising campaigns, as well as on-going mentoring and support. This ensures that as a Franchise Partner you have all the tools you need to build your own successful business.

NOV/DEC 2015 | 123 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_124

121

2015-11-10T09:07:40+11:00

A-Z LISTINGS

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

Phone: 1800 689 550 Fax: 07 5591 9021 Contact: Maria Taylor Maria.taylor@rfg.com.au www.gloriajeanscoffees.com.au Start up costs: $320,000 - $450,000

Start up costs from: $350,000

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

Phone: 07 5515 0118 Fax: 07 5500 3716 Contact: Geoff Biddle mail@groutpro.com.au www.groutpro.com.au Start up costs from: $39,950 + GST & vehicle

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

PROFILE: Gloria Jean’s Coffees is tireless in the pursuit to serve the highest quality coffee, while making each and every guest feel like they are returning home when they step into any of the brand’s coffee houses. After opening the first coffee house in Australia, the business model was perfected for international growth. Gloria Jean’s Coffees footprint has grown to over 800 coffee houses in 40 markets worldwide. Gloria Jean’s Coffees vision is to be the most loved and respected coffee company worldwide, and with the biggest international footprint of any of RFG’s Brand Systems the brand is well on its way to making this vision a reality.

Phone: 0419 290 800 Contact: Jonathan Frearson Fbs71@outlook.com www.harbourwatertaxis.com Start up costs: $68,000 + GST

PROFILE: A water taxi business operating on the busy waterways of Sydney Harbour. This is a unique opportunity to own equity in a proven purpose built vessel. There are no staffing costs, no franchise fees and no leases for premises or equipment. Harbour Water Taxis Pty Ltd offers you a positive cash flow business with additional opportunities to develop your managerial, business development and operational performance skills in the future as the business grows. On water experience (Coxwains ticket) an advantage. You must be customer focused and have excellent communication skills and be prepared to work evenings and weekends.

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

Phone: 0427 208 462 Contact: Steve Potter franchising@indianbrothers.com.au www.indianbrothers.com.au Start up costs from: $160,000

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.

Start up costs from: $64,990 +GST PROFILE: InXpress provides a revolutionary concept delivering customers with express freight advantages to gain a competitive edge in the marketplace. InXpress is an authorised sales partner for the world class courier company, DHL. Domestically, InXpress partners with companies such as Toll and TNT to offer a complete suite of courier and freight solutions, providing increased value and service, saving valuable time and money. Operating in 15 countries with over 250 franchisees globally, InXpress is now accepting applications to grow the Australian business. Benefits to franchisees include: • Low entry costs • Low risk • No inventory/warehousing

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

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

NOV/DEC 2015 | 124 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_125

121

2015-11-10T09:07:40+11:00

A-Z LISTINGS

IN -HOM E , SO C IAL & LI FESTY LE SU PPO RT

Phone: 02 9934 9950 Fax: 02 9934 9900 Contact: Franchise Manager franchise@justbettercare.com www.justbettercare.com

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

Start up costs: $130,000 + GST

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

PROFILE: A reputation for service excellence! Just Better Care is Australia’s largest in home healthcare franchise group. As an established market participant we have built a leading industry brand and are well positioned across both the Aged Care and Disability sector. In protecting the strength of the Just Better Care brand we are very selective in franchise recruitment. Ensuring our franchise owners share a strong determination to develop successful businesses and are genuinely passionate about providing exceptional services is what has set us apart. With compelling demographic market and political changes this industry is well set for exciting growth into the future.

PROFILE: We believe in making this easy and convenient for all our Franchisees. That’s why we offer a fixed franchising fee, flexible finance options and ongoing business, operational and marketing support to all our Owners. It’s no wonder almost half of our Franchisees own two or more salons each! Our business model has been tried, tested and refined over 25 years, helping us become the largest hairdressing company in the Southern hemisphere. And, did you know, you don’t have to be a hairdresser to own a Just Cuts™ salon? Our latest innovation, the Just Cuts™ Kiosk Salon, also allows you to buy into a new lifestyle from just $85,000. Designed to function as a smaller, compact, satellite site within high traffic shopping centres, they’re a great opportunity for those looking to take the first step into franchising or a fantastic way for existing owners to expand. Find out what Just Cuts™ can do for you – give Luke Manning a call today.

Phone: 03 9460 6700 Fax: 03 9460 3099 Contact: Brendan Flanagan franchising@laporchetta.com.au www.laporchetta.com

Phone: 1300 453 284 Fax: 07 5564 9045 Contact: Casey Reid recruitment@theleatherdoctor.net.au www.myleatherdoctor.com.au

Start up costs: $300k + (site dependant) PROFILE: Join the largest Italian restaurant chain in Australia and New Zealand. You will love taking part of serving our guests quality Italian food, to order, using fresh ingredients. We are looking for passionate food lovers with a strong work ethic and drive to join our family. You bring the drive and commitment and La Porchetta will provide the proven systems, training and support to achieve success. WHY LA PORCHETTA? • A proven profitable operation. • We are a much loved and recognisable national brand. • We have strong local area marketing support and advice. • Be part our dynamic and engaged family of restaurants that love people.

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

Join our team of restaurant owners who love getting together and share ideas. We offer a flat fee structure that allows you to build your business faster. Minimum Investment: Dependent on Site Conditions $300k+

START YOUR

JOURNEY Thinking about buying a franchise? Leverage our countless years of knowledge and industry expertise to help ﬁnd the right franchise for you!

Download our FREE 6 step “Buying a Franchise” education journey at Franchisebusiness.com.au/subscribe

NOV/DEC 2015 | 125 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_126

121

2015-11-10T09:07:40+11:00

A-Z LISTINGS

Phone: 02 8197 3080 Contact: Michael Savvas Michael.savvas@madmex.com.au www.madmex.com.au

Phone: 03 9604 9400 Fax: 03 9600 3313 rxt@marshmaher.com.au mim@marshmaher.com.au www.marshmaher.com.au

Start up costs: $400-$600K PROFILE: Healthy, fresh, authentic and high-quality Mexican food in a fast casual environment. Voted the best Mexican restaurant nationwide in the Lifestyle Food Awards, Australia’s best fresh Mexican restaurant, Mad Mex is expanding and looking for passionate and enthusiastic franchisees. Serving gourmet, restaurant quality food in a fast paced environment, Mad Mex is ideally positioned neatly between high end restaurants and food court operators. Mad Mex enjoys the best of both worlds! Fast enough to create a high volume takeaway business but a unique and high quality product offer that is sufficient to command a premium price point. Mad Mex believes in creating a complete Mexican dining experience, so our locations are typically licensed and we provide a range of Mexican beers, tequilas, and our famous $8 margaritas. Our target market is at the high end of the fast food market; and we want our customers to feel good about eating at Mad Mex every day, both in terms of value and quality.

PROFILE: Robert Toth and Marianne Marchesi Well recognised and published franchise specialists with over 30 years combined industry knowledge and experience. Providing advice in relation to: 1. International Franchisors 2. Master Franchising 3. Dispute Resolutions – solutions and strategies 4. Franchisee Advice 5. Sale/Purchase Franchise systems 6. IP/Trademark Advice 7. Company Structure & Tax Advice Fixed fee to upgrade franchise documents for 2015 Code Compliance.

Phone: 1300 961 588 Contact: Luxottica Franchising Team franchising@luxottica.com.au luxottica.com.au/franchising

Phone: 02 8905 8401 Contact: Gary Glen Gary.glen@qsrh.com.au www.oporto.com.au

Start up costs from: $250,000

From approx.: $500K

PROFILE: OPSM is a highly respected and market-leading franchise brand with nationwide opportunities available to both business professionals and optometrists. From a single store in Sydney to over 400 OPSM stores across Australia and New Zealand, our passion has remained constant. We love eyes. When you partner with OPSM you’ll benefit from award winning systems, support, training and business development programs; and be part of an innovative, professional network. An OPSM franchise makes great business sense. You can benefit from scalable and multi-site scenarios, backed by proven business systems and the reassurance that you’re working with world-leading technology and products.

Phone: 02 9822 5622 / 0437 575 200 Contact: Jenna Backhouse franchise@packsend.com.au www.packsend.com.au Start up costs from: $160,000 - $170,000 + working capital (ex GST)

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

Phone: 02 9930 3023 Contact: John Nero au-pizzahut.franchising@yum.com www.pizzahut.com.au/franchise Start up costs from: $300,000 - $340,000

PROFILE: Servicing one of the world’s fastest growing markets, PACK & SEND is an award winning, full service logistics operation servicing corporate and small business clients, as well as householders.

PROFILE: Pizza Hut is the leading global pizza franchise, with over 14,000 restaurants throughout the world and is part of the quick service restaurant, Yum! Restaurants International.

Established for 20 years with over 100 Australian stores – along with international networks in New Zealand and the United Kingdom – there is no other franchise system like PACK & SEND!

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 cutting-edge technology and a thriving e-Commerce network, customers can simply send anything, anywhere through an array of sales channels. With the exponential growth of online purchasing, the parcel and freight industry is among the top to benefit.

With exciting new store opportunities available throughout Melbourne/Regional Victoria, Perth/Western Australia, Regional New South Wales, Northern Territory, South Australia and South East/Regional Queensland there has never been a better time to join.

Our innovative approach and developed infrastructure creates a future-forward franchise platform with ‘no limits’ to success.

NOV/DEC 2015 | 126 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_127

121

2015-11-10T09:07:40+11:00

A-Z LISTINGS

Phone: 1300 977 988 Fax: 1300 977 988 Contact: Robin Lau robinlau@postnet.com.au postnet.com.au

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

Start up costs: $150,000

Start up costs from: $49,000

PROFILE: PostNet offers full-service digital printing and finishing services. We provide everything from wedding invitations and graduation announcements to business cards, brochures, flyers, catalogues, posters, banners and vehicle graphics. We also offer marketing solutions including direct mail, email marketing, graphic design, website creation, business services and private mailboxes rental services. PostNet Neighbourhood Business Centre helps our customers to pack and ship anything to anywhere using the major courier carriers — FedEx, DHL, TNT and E-Go. So many services, one stop solutions provider, that’s PostNet ! We’re The Business Behind Your Business.

PROFILE: Property Club was estalished in 1994 as The Investors Club, and has grown to become one of Australia’s most successful property investing organisations. By educating and assisting members to purchase carefully selected investment properties in Australia, Property Club has worked together with investors and property vendors with over 19,000 properties purchased to date. Success of the Club is evident through the 4,700+ members of our Property Millionaires Club. Property Club now offers an opportunity to join our existing 21 Franchisees. Full training, supported by a dedicated team of head office staff and property researchers will be provided to successful applicants.

Create I Print I Ship I Support I Grow

Phone: 02 8905 8401 Contact: Gary Glen Gary.Glen@qsrh.com.au www.redrooster.com.au

Phone: 07 5591 3242 Fax: 07 5591 9021 Contact: Michael Marr Michael.marr@rfg.com.au www.rfg.com.au

PROFILE: Founded in 1989 as the owner and manager of around 50 Donut King and bb’s Café stores, and Listed on the Australian Securities Exchange (ASX) since 2006, Retail Food Group (RFG) now has a strong portfolio of world class franchise systems with an extensive global footprint. RFG is the owner, developer and manager of Donut King, Brumby’s Bakery, Michel’s Patisserie, Gloria Jean’s Coffees, It’s A Grind, The Coffee Guy, Café2U, Pizza Capers Gourmet Kitchen and Crust Gourmet Pizza Bar franchise systems.

From approx.: $600K

PROFILE: An Australian iconic brand, Red Rooster® provides Australians with fresh not frozen… roasted not fried… quality roast chicken every day of the year. Over the past 43 years Red Rooster has grown to become the largest Roast Chicken QSR operator in Australia with 360 stores nationally. Growth has been a result of the right people, dynamic product range, buying power, comprehensive marketing, strategic support and world class training. With one of Australia’s most recognised brand identities and a well-established franchise support network, Red Rooster offers exciting business opportunities. For enquiries on Franchising opportunities please visit our franchise enquiries page here.

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

Phone: 1300 4 REDCAT (1300 473 322) Fax: 03 9696 1553 info@redcat.com.au www.redcat.com.au

Start up costs from: $50,000 PROFILE: Redcat provides end-to-end, point of sale, accounting and business management solutions that gives users total control of their business. Redcat supplies integrated software and hardware solutions that can manage sales, staff, stock, payroll, through to accounts, GST, customer loyalty, and web based multi-site reporting to provide a complete business management system. Franchised groups can benefit from their flexible centralised management capability that permits multiple levels of control and reporting. Redcat are also able to provide online ordering systems. Customers order and pay through a uniquely branded app, the order is then automatically integrated into the point of sale system.

PROFILE: Snap-on Tools Australia & NZ is a mobile franchise operation putting high quality tools and equipment into the hands of mechanics, engineers and technicians across the country. Snap-on Tools is a wholly owned subsidiary of Snap-on Inc., a developer and manufacturer of innovative and technologically advanced tools with an established network of solid franchise operations across the globe. After more than 25 years in the Australian market, Snap-on continues to solidly perform, providing robust financial results for its network of over 170 franchisees. Extensive training and ongoing support is provided - no previous mechanical experience required. Snap-on offers an exclusive finance package to assist new franchisees.

NOV/DEC 2015 | 127 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_128

121

2015-11-10T09:07:40+11:00

A-Z LISTINGS

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

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

Start up costs from: $450,000

Start up costs from: $350,000

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

• 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.

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

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

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

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

For over 47 years, the SUBWAY® brand has been helping individuals build their own independently operated business – run by people just like you! From step one, throughout the entire franchise process, the Subway® system provides training and guidance that aids in the operation of each restaurant.

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

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

Phone: 02 9723 1011 Fax: 02 9727 6771 Contact: Nick Avgerinos franchise@cheesecake.com.au www.cheesecake.com.au

Phone: +64 21 409 391 Contact: Blair Larsen blair.larsen@tdda.com www.tdda.com PROFILE: The Drug Detection Agency (TDDA) is rapidly establishing itself as the largest and most dominant provider of workplace drug detection services in Australia & New Zealand, with a fast growing list of major corporate clients. With workplace drug screening becoming a necessity for most businesses for safety, legal and productivity reasons, the opportunities are endless to win contracts with Local, State and National businesses. You will also benefit from a comprehensive 100 day training program; Australasia wide business networks; State Office support and large-scale clients that need services in your area. TDDA wants highly motivated and business oriented individuals to join the team to share in the success of this proven business model. If you are seeking a next generation business opportunity with huge potential then contact us now to find out more.

Start up costs from: $200,000 - $800,000

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

NOV/DEC 2015 | 128 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_129

121

2015-11-10T09:07:40+11:00

A-Z LISTINGS

Phone: 13 26 13 Fax: 08 8220 4588 info@viphomeservices.com www.viphomeservices.com Start up costs from: $25,000

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

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

Phone: 1300 655 559 Contact: Jonathan Payne joinus@xpresso.com.au www.xpresso.com.au www.facebook.com XpressoMobileCafe Start up costs: $125,000 + GST including our FAST TRACK Program which guarantees your income! PROFILE: Xpresso Mobile CafĂŠs operate in areas nationally where there are little to no fixed location cafĂŠ options for the workforce in commercial and light industrial precincts. We supply premium Di Bella Coffee products â&#x20AC;&#x201C; both hot and cold. FrappĂŠs, energy drinks, cold brew coffee products, bottles of water and food options such as gourmet cookies that are designed to compliment the enjoyment of an awesome espresso coffee. An Xpresso Mobile CafĂŠ is perfect for corporate and school/community events. Ask us about our unique school fundraising programs!

A-Z

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

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

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

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

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

Phone: 0414 669 101 Contact: Stephen Spitz stephen.spitz@xpressodelight.com.au www.xpressodelight.com.au Start up costs from: $59,990 + GST

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

We also stock Di Bella Coffee specialty capsules that fit the â&#x20AC;&#x2DC;Nespressoâ&#x20AC;&#x2122; pod machine. Both of these services are unique to Australia!

L I S T I N GS

FOR A-Z LISTINGS ENQUIRIES CONTACT:

NATIONAL SALES & MARKETING MANAGER DAVID STRONG ON 02 8484 0905 DAVID.STRONG@CIRRUSMEDIA.COM.AU

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

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

NOV/DEC 2015 | 129 | WWW.FRANCHISEBUSINESS.COM.AU

FR1115_130

130

2015-11-10T17:06:10+11:00

ADVERTISING INDEX

INCORPORATING FCA NEWS

* INDICATES FCA MEMBER

AFEA Home Nurseries

106

La Porchetta

83*

Appliance Tagging Services

Leather Doctor

Baskin-Robbins

11*

Mad Mex Fresh Mexican Grill

91*

Battery World

65*

Marsh & Maher

100*

Benga Designs

82*

Oporto

45*

Black Dot Solutions

Pack & Send

Buy Australian Properties

73*

Pizza Hut

41*

Cafe2U

38-39*

Postnet

Cashflow It

7* 115, 117, 120*

Property Club

Cirrus Media

19*

Redcat

113*

Civic Managed Services

107*

Red Rooster

15*

Cocolat

Retail Food Group

66-67*

Construction Supply & Service

77*

Snap-on Tools

Dodo Services

Snooze

111*

Domino’s Dream Doors

43*

Specialised Events

105*

Egnitus

St Louis

17*

Fastway Couriers

131*

Subway

33*

Ferguson Plarre Bakehouses

78*

Sumo Salad

51*

First Class Capital

49*

Swimart

89*

Gelatissimo

35*

The Cheesecake Shop

23*

Gloria Jean’s Coffees

95*

The Drug Detection Agency

132

Groutpro

61*

VIP

55*

Indian Brothers Restaurant

58*

Xpresso Delight

27*

InXpress

63*

Xpresso Mobile Café

97*

Just Better Care

Zoo Business Media

109

NOV/DEC 2015 | 130 | WWW.FRANCHISEBUSINESS.COM.AU

FR0715_000_FAS

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

FR0915_000_TADDA

2015-09-15T12:07:05+10:00

There’s a lot of money in drugs.

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

Take a video tour on our website