(Mar/Apr 2021) Feature – Franchising for Your Budget. BUSINESS FRANCHISE Australia and New Zealand

FRANCHISES FOR YOUR BUDGET

MEET SNAP-ON TOOLS FRANCHISEE

Emma Courtney ONLINE HELPS

SQUEEZE THE BEST VALUE OUT OF YOUR MARKETING BUDGET

BUDGETING

FOR AN EMERGING OR GROWING FRANCHISE GROUP

LOOK BEFORE YOU LEAP Business Franchise Australia and New Zealand 35

Resources at your fingertips!

CURRENT TITLES INCLUDE: Business FRANCHISE Australia and New Zealand magazine The Magazine for Franchisees, Bi-monthly publication The Australian and New Zealand Business FRANCHISOR magazine The Magazine for Franchisors, Quarterly publication Australian and New Zealand Business FRANCHISE DIRECTORY Annual publication The FRANCHISE GUIDE Annual publication CGB’s website also provides an additional advertising and information format and complements our publications.

www.businessfranchiseaustralia.com.au

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CONTENTS On the Cover 40 Cover Story: Meet Snap-On Tools Franchisee Emma Courtney

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48 Expert Advice: Online Helps Squeeze the Best Value Out of Your Marketing Budget

46 Expert Advice: Budgeting for an Emerging or Growing Franchise Group 52 Expert Advice: Look Before You Leap 38 What’s New: Announcements from the Industry

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40 Cover Story: Meet Snap-On Tools Franchisee Emma Courtney 42 Feature Article: Big Franchising Opportunities for Your Budget 46 Expert Advice: Budgeting for an Emerging or Growing Franchise Group Brian Keen, Founder, Franchise Simply

48 Expert Advice: Online Helps Squeeze the Best Value Out of Your Marketing Budget Tony Tran, Digital Media Specialist, FC Business Solutions

50 Expert Advice: Franchising on a Budget Robin La Pere, Franchise Consultant, No Ordinary Businesses and Franchises

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52 Expert Advice: Look Before You Leap Dr Sudha Mani, Senior Lecturer, Monash University

54 Snapshot: My First Gym - A Franchise Fit for the Future

A regular of Business Franchise Magazine, our special supplement in franchising showcases a different industry each issue To share YOUR SPECIFIC EXPERT INDUSTRY ADVICE or to FEATURE YOUR FRANCHISE in the next issue, please contact: Vikki Bradbury Email: vikki@cgbpublishing.com

Business Franchise Australia and New Zealand 37

what’snew!

HOME BUILDING FRANCHISE OFFERS LOW INVESTMENT AMID BOOMING INDUSTRY Harrington Homes—a family building business that has grown over 45 years to become Australia’s leading new home builder network—is now franchising its proven and profitable business model, allowing potential franchisees and investors to own a Harrington Homes Franchise in selected locations.

by innovative technology platforms and the newly introduced Buildertrend system, a platform that provides contracts, build quantities, quotes and costs.

As the home renovation boom is predicted to continue over the next few years, Harrington Homes are well positioned to continue to be the first choice for new home building projects with franchisees benefiting from the ongoing demand for home builders and building developments around Australia.

1) For experienced builders who have both a building and driver’s license that are ready to take their career to the next level.

The growing franchise network is backed

New franchise investment opportunities are available from $33,000+GST plus working capital. They have two types of business models for franchisees to own:

2) For investors to own a franchise and hire builders.

Franchisees will benefit from joining a growing and successful long-standing business that will provide ongoing head office

support and training, as well as marketing support, while being able to work from home.

Franchisees will also be able to use Harrington Homes national suppliers including Bunnings Trade, Beaumont Tiles, Haymes Paint, Lockwood and Tradelink, for their projects. www.harringtonhomes.com.au

NEW OPPORTUNITIES FOR BUSINESSES AND DISABILITY WORKERS: ATWORK AUSTRALIA 2021 provides a unique opportunity for businesses to rebuild even stronger workforces by recruiting employees with disability.

“Australians living with disability have often been overlooked in recruitment, with a 48% employment rate compared to 80% of the general public,” said Steve Carder, General Manager DES of leading Disability Employment Service, atWork Australia. “This is a missed opportunity as these workers have proven to be hugely beneficial to businesses’ productivity, staff turnover and bottom line.”

“Hiring a person with disability shouldn’t be seen as an issue to be overcome, but an opportunity to build stronger teams,” he added. “It’s well documented that employees with disability generate less turnover and a superior attendance over their peers.”

These benefits are echoed in other research, including a 2018 US study1 which showed that businesses were four times as likely to outperform their competitors’ shareholder returns if they prioritised the inclusion of those living with disability. These businesses achieved an average of 28% higher revenue, 30% higher profit margins and double the net income. Additionally, the average company that employs people with disability see staff retention go up by 90%6, which allows them to focus on their business and not ‘revolving door’ recruitment. atWork Australia’s Disability Awareness Training empowers businesses to build a more accessible and inclusive workplace and support employees with a disability. The cost-free sessions include an interactive

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Q&A webinar, and cover topics such as enhancing awareness and knowledge of disability, challenging attitudes, gaining practical tools and strategies to make the workplace accessible to all. www.atworkaustralia.com.au/recruiting-people-with-disability

STAGECOACH PERFORMING ARTS SETS ITS SIGHTS ON SYDNEY Since UK-born children’s services franchise Stagecoach Performing Arts launched in WA just over two decades ago, the brand has strived to become the country’s number one performing arts school. This year that dream will become reality as the brand searches for its first Sydney-based franchisee. And, in a first for the global franchise, the school will host all end of term shows and tours at one of the most famous performing arts venues in the country—the Theatre Royal Sydney.

“What better place to inspire the next generation of Australian performers than this

historical hub of the arts? Students who enroll at our new Sydney school will benefit from not only our singing, dancing and acting sessions but have the added excitement of putting on shows at this iconic location,” said Chief Operating Officer Andy Knights.

the coming months searching for the perfect franchisee for the Stagecoach Sydney Principal position.

Trafalgar Entertainment (TE), the parent company of Stagecoach, acquired the rights to the Theatre Royal Sydney in 2020. In January, TE unveiled new images of the almost completed renovations, featuring a brand-new circular entry drum and glass entrance.

“Many of our new franchisees have either worked in performing arts or have been performers themselves but experience in the performance sector isn’t crucial for our franchisees. Provided you are passionate about improving the lives of children and have the desire to develop a successful business of your own, you’ll enjoy the work and rewards of being a Stagecoach Principal,” added Knights.

In addition, Stagecoach will be spending

www.stagecoachfranchise.com

BUSINESS AUSTRALIA OFFERS TIPS ON Business Australia Chief Customer Experience Officer Richard Spencer said recent data showed that six out of 10 businesses reported sales losses of up to 75% compared to the same time last year, 18% reported consistent revenue, and only 9% enjoyed a growth in sales during the pandemic.

“Many businesses were faced with the challenge of re-evaluating how they operate,” said Spencer. “They were forced to re-shape their strategy, creating new products, services or delivery methods in a quickly changing environment.

“The businesses that are planning for a postCOVID world and how they repurpose their business to meet those demands are the ones that will be successful going forward.”

Richard Spencer shares his tips on futureproofing your business in 2021: Digital dominance: “Australia’s workforce

needs to be able to operate in today’s digital world and the digital world we will face in five years. Workers and business owners need to be digital, able to re-skill and adapt.”

Stay agile: “The most successful businesses are those that re-shaped their delivery to operate in the quick-changing environment.

That includes diversifying customer bases and serving essential industries where consumer demand is growing, such as health, education or manufacturing.”

Cost efficiencies: “Try to seek out ways to cut unnecessary expenses, for example, try negotiating more flexible terms with your suppliers or premises, compare utility prices, or move operations online if possible.”

Focus on the customer: “Being responsive to customer needs is critical to business success.

It can help to improve retention and sales volume while giving your brand some extra gloss. This involves things like surprising customers and over-delivering on promises.”

Plan with purpose: “The worst thing you can do now is withdraw inside yourself, or inside your own business. Make the most of this time to plan how to lead your business to a successful 2021.” www.businessaustralia.com

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C OV ER STO RY: S n a p - o n To o l s

MEET SNAP-ON TOOLS FRANCHISEE

Emma Courtney

Snap-on is an iconic brand within the automotive industry, but relatively unknown is that Snap-on also offers an attractive franchise opportunity for anyone with the right attitude who wants to step up towards becoming a franchise owner.

“Since becoming a Snap-on Franchisee, it has given me a sense of pride of being able to say I’m the director of my own company—it really has given me a sense of achievement.”

New franchisee Emma Courtney is a proud Kamilaroi and Bigambul woman born in St George, QLD. A qualified Heavy Diesel Fitter and a mother, Emma provided insight into her experience transitioning from being a qualified diesel mechanic and her journey towards becoming a Snap-on franchisee.

Why did you want to become a Snap-on Franchisee?

During my trade I was around cars and trucks and this grew my love for Snap-on and high-quality tools. I had a local Snap-on franchisee that would visit my workshop and he initially spoke to me and made me aware of this opportunity. I wasn’t looking at starting my own business, but this was a business opportunity that would allow me to become my own boss, manage my own time and still do something that I am passionate about.

Since becoming a Snap-on Franchisee, it has given me a sense of pride of being able to say I’m the director of my own company—it really has given me a sense of achievement.

What research did you do before becoming a Snapon Franchisee?

I already knew a lot about the brand—I’ve been a loyal Snap-on customer since starting in my trade because it is a well-known brand and they have a reputation for being the best tools in the world. I even got a Snap-on tattoo four years ago and upgraded to a 72” Masters Rollcab before joining Snap-on. So I already had faith in the quality of their tools and service.

I was familiar with the tooling through my exposure during my trade.

So my research was more on the business operation side. What really appealed to me the most was Snap-on’s transparency and I spoke with other franchisee’s and people inside the business who gave me a lot of information and insight.

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“The best part is that I have customers tell me that the Snap-on truck turning up to their workshop is the favourite part of their week. industry and being a qualified diesel mechanic allowed me to excel faster, so it all felt like second nature.

Importantly, I have the support from the whole Snap-on team. The diagnostic sales team will come with me to visit customers and I know I can call anyone from the sales team or any other franchisee at any time.

They gave me information about demonstrating the product, how to keep up to date with product information and understanding all the promotions. And this helped give me a lot more confidence that I was making a good decision.

What makes Snap-on a good investment for potential franchisees?

When I joined Snap-on was celebrating their 100-year anniversary, and I realised that this business has beaten everything thrown at the company over the last century and survived when a lot of other businesses haven’t.

The good thing with Snap-on is that because the brand strength is so strong, when you turn up at a workshop and technicians step onboard you know they are looking for high-quality tools. So this makes finding customers easy, as long as I turn up each week and provide quality service; then half my job is done.

The best part is that I have customers tell me that the Snap-on truck turning up to their workshop is the favourite part of their week. Even when I was on the tools, I used to always look forward to when the Snap-on truck would arrive. It shows how much people love the brand and they make it a stable business to be involved in.

Also, the relationship between the franchisee and franchisor really surprised me because they really care about your success. Compared to other franchise systems you don’t have to pay royalties or national advertising. All the marketing, advertising and promotions are done, you don’t need to cold call—everything is ready so you can run a very successful business.

What training and support was provided to you?

When I joined I received a lot training. We did role plays, product demonstrations and the Snap-on trainers provided training on the features and benefits of the tools.

You can always learn about the tools, however being involved in the

The team at Snap-on is always checking to see how I am going. If I have a good week they call and you get recognition, and if I have a slower week then my dedicated Sales Development Manager will call me to see how I am going. It really is comforting to know that support is only a phone call away.

What has it been like since starting and what are your business goals?

The first couple of weeks were exhausting mentally, but in a good way. It was a lot of groundwork, but it was worth it. My customer base was very supportive and receptive, so this made it easier.

I also now have a few female apprentices that I look after. It’s been great to be able to mentor them and to be able to show them a career path by showing them I can be both a successful businesswoman and a mother.

My long-term goal is to have two Snap-on trucks and to become a multi-franchise operator, then I would like to hire another female that is ready to get into a Snap-on franchise.

What advice do you have for anyone considering a Snap-on franchise?

At first it was really daunting, but I’m really glad that I made the jump. It is rewarding being able to help customers.

Snap-on have been doing it for 100 years. So follow their advice, processes and build good routines. I believe it is important to keep the truck well merchandised, well stocked and to take pride in your personal presentation. It is important to look and be professional because you are in front of customers and at their places of work, so you need to respect that.

The advice I would have for anyone considering joining Snap-on is to go on a ride-along and talk to a franchisee to get a feel for the business. The key to your success is your attitude. You have to be 100% committed and turn up every day to help customers. www.snaponfranchise.com.au/

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“Emma loves the brand so much she even got a Snap-on tattoo”

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BIG FRANCHISING OPPORTUNITIES FOR

So, you are dreaming of running your own business and being your own boss, but you’re worried about taking a big financial risk?

One of the many benefits of franchising is the wide variety of business options available to suit even the most frugal of budgets.

your BUDGET

Many successful franchisees start out small.

Some are savvy entrepreneurs looking for a lucrative side hustle, others are stay-at-home parents or retirees looking for a flexible and fulfilling way to earn extra income.

Wherever you are coming from and whatever your ambitions are, if it’s your first foray into franchising, a small, low investment franchise is a great way to test the waters.

Is now a good time to become a franchisee?

There is no doubt that many businesses— large and small—have suffered during the global pandemic. While it may seem the worst of COVID-19 is behind us, the experience has taught us all that nothing is ever certain and the best we can try to do is be prepared.

Franchise systems offer a greater degree of support than small business owners trying to do it on their own. Franchisors offer a tried-and-tested business model with built-in operations, marketing and sales support.

They are also committed to keeping their franchisees afloat—after all, it’s in their best interest that your business succeeds.

“Franchise businesses have demonstrated

incredible resilience throughout the pandemic… it is pleasing to see increased optimism as trading conditions improve,” said Franchise Council of Australia (FCA) CEO Mary Aldred, who maintained that while trading conditions were tough in 2020, franchising systems showed resilience and tenacity as franchisees benefited from strong and sustained support from franchisors.

According to the FCA, 64 percent of franchise businesses that responded to a national survey said they were optimistic about business conditions improving in the next six months (following improved trading during the September 2020 quarter). Representatives of more than 100 Australian franchise systems covering 15,000+ franchised units contributed to the FRANdata ‘Pulse Check’ survey.

The survey responses showed that franchisors were able to support and assist their franchisees by: regulations and restrictions support programs

programs support the well-being of franchisees.

What do I need to get started in franchising?

It’s clear to see that franchising offers more security and support than going it alone and trying to keep your own small business afloat during turbulent times.

And once you have made the decision that franchising is for you, it’s easy to dive right in!

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Start-up fee and investment You will need to have some savings to start your venture. For small business opportunities you should be able to provide at least 10 percent of the franchise cost upfront. Some franchises offer low investment fees to get you up and running fast but require royalty fees and a portion of the profits you make. This latter option can be suitable for people just getting started in franchising who have little capital but big ambitions and are willing to share the success of their efforts with the franchisor.

Always do your research before signing a contract to make sure you understand the financial expectations.

A passion for the product or service While it’s true you don’t always need to be an expert in the subject of your franchise (for example, you don’t need to be a chef to own a restaurant or an athlete to run a gym) it is important to be driven by more than making money. To be successful, you will need to show passion and commitment to your business and the industry it represents.

So make sure the franchise opportunity you choose suits your interests, your personality and your lifestyle, not just your bank balance.

Do your homework Once you have selected the type of franchise you want to be a part of, do your research to learn all you can about the different franchises available within that category. Attend franchising expos, attend information sessions, talk to franchisees about their experiences, and devour as much information as you can—reading the Expert Advice articles in Business Franchise magazine is also a great way to start!

With varying investment rates and start-up costs, there are a wide range of franchises to suit most budgets. Some require more capital due to real estate, shop fit-out or equipment expenses, while other franchises can get you up and running at a fraction of the cost—there is not one-size-fits-all financing structure to franchising. But what you can expect to find across all of these franchises is a network of built-in structures, systems and support that will make your pathway towards business ownership a smooth one, with many franchises even offering financial plans and discounted fees to support budding entrepreneurs.

ANDREW BARTON laundromats are an excellent long-term investment. Because

of the reliability of their Speed Queen machines an investor can expect reliable running for 15 years or more without the need for significant reinvestment, so once the initial set up costs have been recouped the additional profits become even more attractive. Learn more: www.andrewbarton. com.au BATTERY WORLD is a leading battery retailing franchise business embarking on a new era of rapid expansion. By providing quality and in-demand products and services, franchise partners have an opportunity to build a business under the banner of one of Austrailia’s leading and trusted brands. Learn more: www. batteryworld.com.au/franchise-opportunities FANTASTIC SERVICES offers a range of services for the home and office including cleaning, gardening, handyman, pest control, removals and more. Fantastic Services develop a customised franchise plan

for franchisees, matching your individual needs, skills and financial resources. Learn more: https://joinfantastic.com.au FASTA PASTA is Australia’s largest, independently owned group of fresh pasta Italian restaurants. Fasta Pasta offers franchisees extensive initial training and ongoing support covering areas such as front of house, kitchen, bookwork, PPS and management skills. Learn more: www. fastapasta.com.au/franchising HOME CARING provides professional and compassionate personalised home care services. Home Caring seeks communityminded high achievers with a health background who want to build a solid financial future combining their local networks with the comprehensive training and support of the Home Caring brand.

Learn more: www.homecaringfranchise. com.au INXPRESS is a global express logistics franchisor with over 380 franchisees in 14 countries providing freight consultative services to SMEs. InXpress has established strong relationships with courier partners, leaving you free to concentrate on sales and building your business. Learn more: https:// au.inxpress.com/franchise-opportunities LASER CLINICS AUSTRALIA is the largest retail cosmetic clinic company globally with a Medical Advisory Board made up of Leading Dermatologists and a Medical Director at the forefront of innovation, new technology, safety and ethical standards. To share in the success of the growing aesthetics industry, learn more: www.laserclinics.com.au/franchiseopportunities MAGNETITE offers double-glazing, thermal insulation and soundproofing to reduce energy use and noise in existing buildings. A Magnetite franchise offers a

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FRANCHISE OPPORTUNITIES FOR ALL BUDGETS

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More franchises to explore…

7-Eleven www.7eleven.com.au/franchising.html Appliance Tagging Services www.appliancetaggingservices.com.au/ franchise-outstanding-support Aramex www.aramex.com.au/franchising/courierfranchise Checkmate Safety https://checkmate.net.au/checkmate-safetyfranchises-for-sale

secure and long-term business opportunity; on average, Magnetite franchisees have been trading for 15 years. The initial investment is based on the size of the territory. Learn more: www.magnetite.com.au/franchising/ magnetite-franchise MY FIRST GYM is a growing kids’ health franchise that aims to inspire kids to fall in love with fitness by creating ‘moments of magic’ in their clubs and using the MyMovementBuddy app to help track progress. If you are looking for a franchise that is not only commercially successful but improves the lives of others through health and fitness, learn more: https://myfirstgym. com.au/about/franchising/ NURSE NEXT DOOR provides in-home support services enabling people to remain in their own homes, on their own terms. With no requirement for a healthcare background, Nurse Next Door is looking for franchise partners with a tender touch and the tenacity

of a bulldog. In return they offer step-by-step support as you grow your business. Learn more: www.nursenextdoorfranchise.com.au PACK & SEND is a retail service centre operation providing convenient freight packaging services to businesses and consumers and offers online freight solutions for pre-packed parcels. With an everincreasing demand to send goods throughout the world, there are no limits to your success with a Pack & Send franchise. Learn more: www.packsend.com.au/own-a-franchise RETAIL ZOO represents four unique retail brands: Boost Juice, Salsa’s Fresh Mex, Betty’s Burgers & Concrete Co., and Cibo Espresso. The Retail Zoo website walks you through current franchising opportunities with each of these brands, a checklist of what you need to get started and step-bystep instructions on applying for a franchise.

Learn more: www.retailzoo.com.au/ourbrands

Deck Seal https://deckseal.com.au/franchise.html Ecomist Australia www.ecomist.com.au/franchises-available. html Gecko Sports https://geckosports.com.au Infinity Martial Arts http://infinitymartialarts.com.au/franchiseopportunities Jim’s Pool Care www.jimspoolcarefranchise.com.au Just Cuts https://franchising.justcuts.com/franchising Little Big Sports www.littlebigsport.com.au/franchiseopportunities Listen To Your Body https://listentoyourbody.com.au/own-a-ltyb Roll’d https://rolld.com.au/franchise www.ryco247.com/franchise Safety Navigator www.safetynavigator.com.au Snap-on Tools www.snapontools.com.au/franchise Snap Printing www.snap.com.au/own-a-franchise.html SuperGreen Solutions https://supergreensolutions.com.au/ franchises The Lott www.thelott.com/about/franchise

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BUDGETING

FOR AN EMERGING OR GROWING FRANCHISE GROUP As Greg Nathan from Franchise Relationships Institute states in his book Profitable Partnerships, ‘Happy franchisees are profitable franchisees and profitable franchisees are happy franchisees’.

But getting franchisees to a point where they understand what it takes for them to be profitable can be tricky. I believe success starts right at the beginning, when a prospective franchisor defines exactly what their franchise group will look like and who will do what, and

then managing budgets to make sure it all works.

There is a process which starts at concept stage and keeps going all through the life of the franchise, changing with the times.

Managing this process through thick and thin is the clear responsibility of the franchisor. This is one of the key features that attracts astute people to the franchise sector, and why it is such a standout success.

Let’s look at how this process works.

Franchisor cashflow budgets First, set the group up around the people involved. Whether you are reviewing an established franchise group, converting an existing business to the franchise model or developing a group from a business concept, the first step is always the same: work out who does what.

On the surface this sounds simple. But we have found that quick assumptions just don’t work.

People have unique characteristics and skill sets, which means we are great at some things and not so great at others. The key is to find people who can do the core technical tasks and who will keep the customer happy.

So, ask a series of questions to work out who really does what and what support is needed

“Individuals interested in franchising should understand the franchise business and assess the working relationship with the franchisor before committing to franchising.”

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“Once you’ve got the people plan, it’s time to measure it against the money. And the more accurate the base, the better your cashflow budgets are going to be.”

Once you’ve got the people plan, it’s time to measure it against the money. And the more accurate the base, the better your cashflow budgets are going to be.

So, wherever possible, the first thing we ask for are cashflow budgets based on an existing business or franchise group. Then we ask for budgets to be prepared for franchisee initial set up costs, and all marketing and other contribution plans.

This material is then used to set up threeto-five-year cashflow budgets for a proposed franchisee business and the new franchisor business. Yes, we believe you will be converting your business from one business into a minimum of two new business entities and both need to be planned together carefully so they work in unison to get the job done.

Once you are happy with the budgets, contact a franchise consultant and franchisesavvy accountant to discuss your findings.

What is their opinion on the fee structures you need to put in place for your initial fees, marketing and other contribution fees, ongoing support requirements and royalties, and the number of franchisees required to make it profitable?

Are your franchisees likely to make enough to give them a healthy profit so they stay happy and profitable after they have paid all their expenses and their payments to the franchisor?

Capital expenditure This is a critical issue for all in business, highlighted by the pain suffered during the challenges of 2020 when cash flow dived into negative for so many.

Each new franchisor must be aware of the need for additional capital to fund the franchising process and the operation of the company while the group is growing—until the critical mass has been reached to allow reasonable withdrawal of funds. This could take months or even years, depending on your business model and your success in recruiting franchisees and a throng of happy, loyal customers.

And don’t forget the investment needed to recruit the ideal franchisor management and support team around you. This is a red-light area for those who’ve not taken the time or received the appropriate advice to produce accurate financials and forecasts. Something a typical entrepreneur may dismiss with a

Brian Keen | Founder | FRANCHISE SIMPLY

wave of the hand, saying, ‘Don’t waste my time with this stuff! I want to get on with the excitement of growing the business’.

Our impressive ‘franchise-savvy’ experts from The Grow CFO Co, Deborah and Jeremy Harris, describe this beautifully when telling our clients “Think about it this way – revenue is vanity, cash flow is reality.”

The growth trap Have you ever been on holiday and had to dig into your savings? Join the crowd! It’s the unexpected costs and little indulgences that cause the problem.

In a new franchise group, such issues involve a delay in sourcing your first franchisees, incurring unexpected advertising expenses, bringing in a broker, the resulting lost revenue—the list can grow alarmingly.

Which brings me to the painful reference of your treasure chest to handle any contingencies. It may be cash in the bank, better still savings, or a credit line with the bank. As Jeremy brutally reminds us, “Wealth is the number of days survival forward.”

Post-Covid, a minimum six-month buffer of working capital is my recommendation: calculate it now—you’ll be alarmed.

Review and update Once you are up and running, review and update your budgets at least every three months and adjust necessary elements of the franchise group and your budgets as required. Think of these budgets as your strategic spending plan—they are an integral part of managing both the franchisor business and the way franchisee businesses are supported into the future.

Franchisee cashflow budgets We all know it is good business practice for every business be managed within the framework of clear goals laid out in a succinct three-to-five-year business plans with realistic cashflow budgets.

Franchised businesses are no different. In

fact, business planning for franchisees is probably even more important because such plans provide a sound basis for the franchisor to review performance within the group and help franchisees grow their business.

Ask each franchisee from the day they begin to prepare cashflow budgets and business plans for their business/es for the next three-to-five-years. Make sure they contain clear goals and KPIs for important aspects.

Provide templates so the plans cover the issues required but not specific figures and never promise levels of achievement.

Drawing on historic results or clearly qualifying notional figures is the way to go.

And for comfort, check with your financial and legal advisers.

Then plan meetings around the review of these plans every six to twelve months.

This way franchisee performance can be measured against a personal and fair bar which reflects where each franchisee is in their journey, the characteristics of their personality and the potential of their territory. It also means that training, coaching and support can be supplied more meaningfully to help each grow by focusing on agreed areas that need attention.

Franchising is about people and the relationships between the two sides and, to work, it has to be based on clear shared goals, with well managed money being one of the essential foundations. Good cashflow budgeting from beginning to end will really help the relationship flourish.

Brian Keen has been involved in the franchise industry for more than 30 years and, today, is the Founder of Franchise Simply. His on-the-ground business experience as a multi-unit franchisee, franchisor and consultant helping many of the big names create their own franchise systems and growth over the years has been fed into Franchise Simply, helping today’s SMEs grow their business by franchising. www.franchisesimply.com.au brian@franchisesimply.com.au

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to keep franchisees successful at looking after clients and bringing in the money. Then set up initial cashflow budgets and fee structures to make sure the money works.

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ONLINE HELPS SQUEEZE THE BEST VALUE OUT OF YOUR MARKETING DOLLAR There is no disputing that 2020 was, using the words of Her Majesty, Queen Elizabeth II, an annus horribilis. So how do we ensure that 2021 is a year of growth for your business?

One important step is to pay extra attention to your marketing and deriving the very best value for every dollar spent.

A lot of businesses, when they went into lockdown, were already committed to marketing campaigns that were physical – billboards, print catalogues etc. Mediums that may have delivered great results in previous years, but were now rendered impotent as cars no longer travelled freeways and people just didn’t want anything in their letterbox. What 2020 showed us is that when it comes to marketing, we need to consider a

range of delivery platforms for any campaign that we promote. We need to be flexible, not only in the delivery platform but also in the messaging. In March last year, people didn’t want to hear from you as a business unless you were solving a problem for them and any marketing messaging that ignored the pandemic was judged harshly.

As a result of the lockdowns, businesses have rightly pivoted to the online space to sell their products and services. The online world became the saviour of many businesses and the increased focus of so many Australians, as they were forced to work and shop from home.

But now, in 2021, Australia is emerging with hope that this pandemic is under control; that vaccines will return life to near normal; and with signs that the economy has awoken from hibernation, stretched and gone for a brisk run. (Disclaimer: this is the case as I write this. I learned last year that the world changes in a heartbeat and you can’t rely on the status quo.)

So now is the time when you should be moving full steam ahead with your marketing campaigns. It’s not the time to cut your marketing spend, but it is the time to ensure that you get best value for your marketing dollar. And this means getting forensic: last year? new marketing efforts? work than reward?

If you can’t quickly access the answers to these questions, then you need to put in place the automated systems to provide you with the data you need. There’s no point spending money on any aspect of your business—including marketing—if you can’t measure your return on investment.

Because of the increased engagement by the population with online, it’s a good strategy to ensure that you have a strong presence there, but at the same time, making sure that you are driving value from every dollar spent. and SEO (Search Enginge Optimisation) of your website.

Acquisition). A report by Facebook revealed that some industries in 2020 saw the highest conversion rate for dollars spent since 2017. Calculating your CPA lets you work out what percentage of the profit made from a lead is spent on obtaining it. This data helps you plan how much you can spend on a campaign and lets you dial it up or down, depending on results. message and focus on just promoting your

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FE ATUR E : FR A NCH ISES FO R YOU R BU DG E T “Even if you are doing it tough as a business, it is false economy to cut marketing from your budget. The trick is to look at how to derive the best value from your limited dollars, and online is usually the answer.”

Tony Tran | Digital Media Specialist | FC BUSINESS SOLUTIONS

core products. Develop a strategically targeted social media content plan for your most popular items, by using data from sales reports and website analytics.

This way you can get your services and products in front of people who are actively looking. resources by having someone do the same process every month to generate a report and put it on your desk. Set up an automatic recurrent process that means you have that report—automatically—in your inbox at the start of each month.

Direct Email (EDMs). An EDM is cheap and some delivery plans are free if you are still building your database. EDMs promote your brand, your products and can, when cleverly constructed, build relationships. help laser focus your spend. For instance:

comprehensive, searchable collection of all ads that are currently running on Facebook apps and Instagram. You can have a look at what your competitors are doing and see what is working for them. free plans to get started) to see what keywords work well for driving people to your website and where you may be able to expand your reach.

(CRM) like Hubspot that offers free tiers: this will allow you to track your sales and only pay as your business grows.

I urge every business to investigate government grants as a way to fund some of your digital marketing. The Australian federal and state governments have many initiatives to support businesses, and in 2020 we helped a lot of them to secure grants that allowed them to effectively market their products and services, in a way they wouldn’t have been able to, without the financial assistance.

In summary, even if you are doing it tough as a business, it is false economy to cut marketing from your budget. The trick is to look at how to derive the best value from your limited dollars, and online is usually the answer. By using a systemised approach and with a strategy driven by statistics, data and artificial intelligence tools, you can create a focused presence that is talking directly to those people who are actively looking for the types of products and services you provide.

Tony Tran has been in the IT industry for the better part of the last decade, working across both small to medium enterprises and also to some of Australia’s largest retail brands. As a senior product manager, he has overseen the development of large enterprise web platforms that help maintain businesses with their operational excellence. He has been appointed the security officer at varying software development agencies to ensure the scalability, robustness and safeguarding of systems from thirdparty attackers. Specialising in web development, Tony has ensured businesses follow best practises across web security, analytics and marketing.

To discuss how Tony’s expertise can help tak your business to new heights, contact: 03 9533 0028 tony@fcbs.com.au www.fcbs.com.au

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FRANCHISING ON A

IT MAY BE EASIER THAN YOU THINK TO GET INTO YOUR OWN BUSINESS Always dreamed of owning your own business but think you can’t afford a franchise?

Think again.

A limited budget doesn’t mean you have to give up on your dream to become a business owner. It’s a matter of selecting the franchise opportunity that’s right for you and then working through the many options available for getting started and taking control of your future.

The good news is that right now, buying a franchise is more affordable than ever because of three factors – the amazing diversity of franchise opportunities, the record-low interest rates currently on offer and the keenness of franchisors to keep growing despite uncertain times.

Borrowing costs are at a record low Let’s say you’re considering a retail franchise for $300,000. Most franchises require you to put some of your own money in or at least have at least part of the cost in liquid assets – that is, cash or assets you can easily sell for cash. So, let’s also say you have $50,000 of your own and need to borrow the rest.

A quick survey of loan comparison websites shows that you could possibly get an unsecured five-year fixed business loan for

“Buying a franchise is more affordable than ever because of three factors – the amazing diversity of franchise opportunities, the record-low interest rates currently on offer and the keenness of franchisors to keep growing despite uncertain times.”

Robin La Pere | Franchise Consultant NO ORDINARY BUSINESSES AND FRANCHISES

that amount for as little as 4% per annum or just over $1,000 per week, but if you have equity in your home and can secure the loan over that equity and extend the loan term over, say, 20 years, you could slash your interest to around 2% per annum or under $300 per week.

Don’t have fifty grand? Don’t stop reading!

The thing to remember is that probably the most important consideration for a franchisor in selecting a franchisee is finding the right person, a person who has the drive and ability to build a strong business. A prospective franchisee may have wads of cash but if they’re not the right person, they’re not going to be successful and may end up damaging the franchise as a whole.

If you’ve got your eye on a franchise and think you’re the right person, here are some strategies for getting in for less than you may have thought.

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- Start small, think big I have several clients in service franchises who offer a range of entry options, starting from as little as $4,000. They’ve told me that it’s an increasingly common approach for people getting into their own businesses to start with a lower-cost option, build it up and then either sell it and move on to a bigger franchise or use their cashflow to purchase multiple franchise units. For this approach to be successful, you have to be disciplined and work hard but it is possible to do very well out of a small initial investment.

- Ask the franchisor if they provide vendor finance or a guaranteed income Many franchises will lower the barriers to entry for the right people. It always pays before you start approaching banks for a loan to check whether franchisors offer finance or the ability to put a small deposit down and pay off the initial franchising costs as your business grows. If you’re

- Find a franchise using the Chick-fil-A model If you’ve never heard of Chick-fil-A, it’s because they don’t yet have any franchises in Australia and New Zealand, but this fast-food chicken sandwich restaurant is now the third-largest chain in the United States after McDonald’s and Starbucks in terms of sales. The difference between Chick-fil-A and other franchises is that it costs franchisees only $10,000 all up to buy in. The franchisor pays for all startup costs, including real estate, restaurant fitout and equipment. For that reason, Chick-fil-A gets more than 20,000 inquiries for franchises every year, but only accepts between 75 and 80 new franchisees. The catch is franchisees must pay ongoing royalties of 15% of sales plus 50% of the pretax profit after royalties. So although the average sales of $US4.6 million for each of Chickfil-A’s restaurants are three times more than KFC’s restaurants, franchisees take home an average of only US$200,000 of that. Not that that’s anything to sneeze at. Although you can’t buy a Chickfil-A franchise here, you can buy other

franchises which offer low upfront costs but high ongoing costs. A classic is Kumon Education Centres which charge the lowest initial franchise fee in the business – just $1000 – but the trade-off is the 40 – 50% fee on enrolments.

- Find out how much love the banks have for the franchise Bankers recognise that the risk involved in lending to people buying into established franchise models is low, so for what they call accredited franchises, they may be willing to lend to you up to 70% of the purchase price secured only against the business, not your home or other asset.

- Find a business partner Getting into a franchise with a partner can bring more business expertise and support as well as cash into the business, but my advice is to be very careful who you get into bed with and be sure to document each partners’ roles, responsibilities and share of the rewards in a good shareholders’ agreement.

- Find an investor An investor is someone who contributes capital to a business but doesn’t normally get involved in its day-to-day operation, although they will expect to play a part in any major decisions and, of course, get a share in the business and a return on their

investment. As with a business partner, it is essential for the avoidance of potential conflict to document the details in an investors’ or shareholders’ agreement, even if the investor is a family member or friend.

- Be prepared to compare and negotiate on costs I have found over many years in franchising that the notion that you can’t negotiate with franchisors is a myth.

Franchisors, like all business people, must be pragmatic in order to survive and thrive. If you’re the right person in the right place and time, who knows what kind of deal you could make? You don’t get if you don’t ask, and you’ll never lose anything by asking.

Robin La Pere is a franchise consultant with more than 20 years’ experience as a franchise manager, CEO and owner as well as a consultant, coach and speaker on franchising. Based in Auckland, New Zealand, he works with clients throughout Australasia and internationally. He is a specialist in business model development, strategic planning, process improvement, innovation and franchise recruitment marketing. www.noordinary.co.nz

“The thing to remember is that probably the most important consideration for a franchisor in selecting a franchisee is finding the right person, a person who has the drive and ability to build a strong business.”

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currently employed and can’t afford to lose your regular income once you purchase a franchise, look for franchises that offer a guaranteed income for the first few months after startup.

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LOOK BEFORE YOU LEAP

Historically, decreasing employment opportunities lead to an increased interest in entrepreneurship for many. The motivation to be independent and the experiences of a tough labour market encourage people to consider other options, specifically starting a business of their own.

opportunity to start a small business with the support of the franchisor’s brand and expertise. The franchise brand provides an immediate leg-up for the new franchisees.

The franchisor also offers the much-needed know-how to manage a small business.

Franchisors’ expertise help franchisees streamline their processes. The franchisors’ ‘tried and tested’ business model can be a great way to leverage the market for potential franchisees.

Franchisor-franchisee relationships are long-term relationships. But, not all such relations are ‘marriages made in heaven’.

The path to success for new franchisees is not straightforward, especially as there is considerable difference among franchise systems.

The franchisees also contribute to the success of the system with their capital, capability, and time.

Prospective franchisees should conduct careful due diligence in their choice of franchise systems. Else, the pathway to success could easily turn into a recipe for disaster.

However, individuals may have the capital or the expertise to start an independent business, but not necessarily both.

Franchising has the potential to offer the delicate balance between being independent and yet mitigating some of the risks of starting a new business. Potentially, the franchisor-franchisee partnership is a recipe for great success.

The numerous challenges of starting an independent small business without prior experience motivate individuals to consider franchising. Franchising offers an

Thus, it is not surprising that there is an even greater interest in franchising. As with prior downturns, there has been a significant increase in franchise enquiries.

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The need for careful consideration

Individuals interested in franchising should understand the franchise business and assess the working relationship with the franchisor before committing to franchising.

The Parliamentary Enquiry delivered its report Fairness in Franchising in March 2019. The report focused on efforts to improve the working relationship between

Dr Sudha Mani | Senior Lecturer | MONASH UNIVERSITY

The document is an easy-to-use tool to help prospective franchisees consider more than one franchisor. Prospective franchisees should use the ‘Key Facts Sheet’ to compare franchisors. Using the ‘Key Facts Sheet’ encourages franchisees to take a more well thought out approach to franchising.

However, this should only be used as a screening tool. Prospective franchisees should get professional help to examine the franchise disclosure documents and contracts carefully before committing to the franchise system.

Beyond the ‘Key Facts Sheet’ In addition to the information suggested in the ‘Key Facts Sheet’, prospective franchisees should also seek to understand–franchisors’ selection criteria and the ongoing support. In a large-scale study of over 1000 franchisors shows that selection and support reduce the risk of franchisee insolvency.

The selection criteria assess the franchisees’ ability to kick-start the franchise operations.

But there is also a need for franchisor’s ongoing support that complements the initial selection. franchisors and their franchisees. The Australian Government has since released a response to the Fairness in Franchising report. The Government has also released a “Supporting Guide: Changes to the Franchising Code” in November 2020.

Together these efforts should help strengthen franchising in Australia.

Franchisor selection criteria Prospective franchisees should try and understand the franchisors’ selection criteria.

Some useful questions here are: experience?

The Supporting Guide document is a fantastic additional resource for prospective franchisees.

franchisees to have a formal education?

What is the expected level of education?

The document includes a ‘Key Facts Sheet’—a simple questionnaire to help interested franchisees. For individuals interested in franchising, the mock-ups in the ‘Key Facts Sheet’ provide useful guidance on some key questions prospective franchisees should ask franchisors.

franchisees’ financial net worth in their decision?

For some prospective franchisees, the selection criteria may seem onerous.

However, the selection criteria signal the need for both expertise and capital needed to operate the franchisees.

Franchisors may be required to provide some version of this ‘Key Facts Sheet’ to prospective franchisees in the near future.

Interested franchisees don’t have to wait for new regulations to ask the right questions.

Franchisors without clear selection criteria may be willing to enrol individuals into the system without due process, which can destabilize the complete system. Having competent peers is beneficial to everyone

involved. The selection criteria also provide some guidance on the franchisor’s expectations.

Franchisor ongoing support Franchisors can provide ongoing support in different ways. Some of the questions that franchisees can ask on ongoing support are: national meetings? How often are these meetings scheduled? the role of the franchisee association? before the opening of the outlet? Is this training mandatory? How much does it cost? training? Is this training mandatory? How much does the training cost? franchisees contribute to the newsletter?

Opportunities to engage with other franchisees on an ongoing basis can contribute to franchisees’ success and well-being. These ongoing connections with the franchisor and other franchisees’ in the system provide an opportunity to learn and share best practices. Both formal and informal exchange of information has favourable implications for franchisees and franchisors alike.

Individuals taking a cautious step towards entrepreneurship should carefully consider various franchise opportunities in the marketplace. Asking the right questions can help franchisees succeed in the right franchise system.

This is an opinion piece by Dr. Sudha Mani. She is a Senior Lecturer at Monash University and Member, ACCC’s Small Business & Franchising Consultative Committee. Her expertise is in the area of governance of franchisor-franchisee relations and their performance implications. Dr. Mani applies advanced econometric methods to work with big data. Her research has appeared in highly prestigious Financial Times top 50 journals. She has contributed to the Australian Parliamentary Inquiry Committee’s report on the Franchising Code of Conduct and was a keynote speaker at the National Franchise Convention 2019.

Sudha.mani@monash.edu https://research.monash.edu/en/persons/ sudha-mani

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“Prospective franchisees should get professional help to examine the franchise disclosure documents and contracts carefully before committing to the franchise system.”

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S N A PS H OT: M y F i r s t G y m

A FRANCHISE FIT FOR THE FUTURE

With its lower-than-average start-up fees, minimal staffing costs, early potential profits and a highly engaged market, My First Gym (MFG) offers a robust and supportive business model with lots of room to grow.

MFG Co-Founder Daniel Newton spoke to Business Franchise about big opportunities for budding franchisees.

Daniel, tell us about yourself, your business and the birth of My First Gym. I’m a fitness industry veteran, multisport enthusiast and passionate family man. My career in the fitness industry spans over 20 years, working across multinational health club brands such as Gold’s Gym USA, Fitness First Health Clubs and Snap Fitness.

I am very passionate about delivering health & fitness to communities and have found it my personal mission to bring new and exciting ways for people to exercise to the market, which led me to the children’s fitness sector, an untapped, but very relevant market to inspire movement.

Our first MFG corporate site was opened in September 2017, with the franchise program beginning in April 2018 and we’ve been helping children live healthier and more active lifestyles ever since.

What service do you provide?

We are a one-stop fitness shop for children.

This is primarily a class membership model, but our service also includes birthday parties, school holiday camps and a very unique whereable technology offering; MyMovementBuddy, specifically made for kids. Our mission is to be the leader in children’s fitness and give every community (including parents) access to our programs.

We currently have eight clubs in Queensland and two in New South Wales, with more in the pipeline. We are expanding into the international market with MFG New Zealand set to open in the near future.

What type of person would ‘fit’ your franchisee profile?

Our franchisee selection program allows for a broad experience and background profile. We look for character: the desire to lead and passionately represent the MFG brand; experience: a track record of business operations and management or business ownership and exposure to health club membership models or a likeminded industry background; time & engagement: dedication to being physically present; and financial: $200k minimum in NET cash assets.

Franchise owners will enjoy the benefits of an extensive support system. Our franchisee program focuses on all aspects of setting

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“I am very passionate about delivering health & fitness to communities and have found it my personal mission to bring new and exciting ways for people to exercise to the market.”

up a club, recruitment and training of staff, and sales and marketing. Our training is concentrated in the first 90 days and then evolves into an ongoing support and training program to ensure consistent and sustaining performance.

What’s your focus for the year ahead?

During the Covid-19 crisis, our business was able to adapt quickly, to deliver ‘on demand’ classes during the home lockdown period and ensure our little members and their families had access to their programs.

But once the doors opened again, the immediate increased usage and the surge in membership across all clubs demonstrated the unquestionable need for our facilities, coaches and inspiring movement programs.

In July 2020, MFG was acquired by a new ownership group with a range of highly credible and qualified professionals, joining our engaged industry veterans. With this new ownership team, as well as recent record-breaking operations results, MFG is set up for a big future. We now have 10 operating sites and have a clear focus and mission to make a real difference in the lives of families and continue our rapid growth in 2021. www.myfirstgym.com.au/about/ franchising