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Editor After a period of uncertainty waiting for the new Franchising Code of Conduct to come into effect on 1st January, we are now well and truly ensconced in 2015. If, like many others before, you have made the decision to own your own business, you have taken the first step by picking up this issue of Business Franchise Australia and New Zealand magazine. Another great source of information is the Franchising Expo, being held in Sydney 28th – 30th March at the Royal Hall of Industries, Moore Park in Sydney. As well as showcasing a range of different franchise systems under one roof, you can also speak to experts within the field, all offering expert advice and information. With a dazzling array of different franchise systems available in Australia and New Zealand, we feature a selection of them throughout the publication. Our front cover this issue is InXpress. Read on page 10 how, since being founded in 1999, they have developed their franchise and are now one of the world’s largest franchise systems for delivery and transportation services. Also included, amongst others, are
BUSINESS FRANCHISE AUSTRALIA and new zealand
HydroKleen. On page 60, you can read how they have breathed new life into the air conditioning industry, while reducing sickness and saving you money on your power bill.
VOLUME 9 ISSUE 3, march / april 2015
This issue, from page 42, we take a closer look at service-based franchises, alongside service providers. Like other developed countries, the majority of Australia’s economic activity today occurs in Service industries. These industries account for more than two thirds of GDP and about ten million jobs and included within these figures are the service franchise systems and providers, all of whom provide a service to other businesses and individuals within a wide range of categories. Our Expert Advice writers have come from all areas of franchising to help you in your franchising journey. From Louise Wolf from MST Lawyers who, on page 68, states the 10 questions you need to ask before buying a franchise to Greg Nathan at Franchise Relationships Institute on page 14 who says sloppy research is just as bad as no research. There’s a wealth of knowledge and experience waiting for you within this issue.
publisher: Colin Bradbury. firstname.lastname@example.org EDITOR: Joanne Tuffy. email@example.com SALES DIRECTOR: Vikki Bradbury. firstname.lastname@example.org SALES & marketing manager: Kathleen Lennox. email@example.com PRODUCTION: firstname.lastname@example.org ACCOUNTS: Renee Gould. email@example.com DESIGN: Jejak Graphics (03) 8790 8006 COVER IMAGE: inxpress
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The information and contents in this publication are believed by the publisher to be true, correct and accurate but no independent investigation has been undertaken. Accordingly the publisher does not represent or warrant that the information and contents are true, correct or accurate and recommends that each reader seek appropriate professional advice, guidance and direction before acting or relying on all information contained herein. Opinions expressed in the articles contained in this publication are not necessarily those of the publisher. The publication is sold subject to the terms and conditions that it shall not be copied in whole or part, resold, hired out, without the express permission of the publisher.
Business Franchise Australia and New Zealand 3
busi n ess fr anch ise aust r a l i a an d n e w ze a l an d
Contents march / april 2015 On the Cover 42 Feature
10 Cover Story: Inxpress Grow your Business with a Global Superbrand
28 Succession Plans that work
Success within the Service Sector
68 10 Questions to Ask Before
Labrina Tsekouras, Westpac
Buying A Franchise
Louise Wolf, MST Lawyers
In Every Issue
18 Yogurtland Australia
Announcements from the industry
12 Compliance is Key Warren Wilmot, FCA Chairman 42 Feature: Success within the Service Sector 94 Behind the Headlines
Jason Gehrke, Franchise Advisory Centre
36 Sherpa Kids 44 Clean Green Strata 52 Thexton Armstrong 54 ShopInsurance.com.au
96 Professional Services Listings
98 Franchise Listings
100 A-Z Franchise Directory
64 National Franchise Insurance Brokers 66 Franchising Expo 84 Zambrero
4 Business Franchise Australia and New Zealand
14 An Expert’s Guide to Picking Great Franchises
Greg Nathan, Franchise Relationships Institute
20 Financial Tips for Prospective Franchisees
Jamie Bishop, McLean Delmo Bentleys
32 When Franchisors go bust
Jason Gehrke, Franchise Advisory Centre
also in this issue: Appliance Tagging Services. .................... 100 Battery World......................................OBC, 100
Brazilian Butterfly.................................... 81, 100 Bucking Bull..................................................... 100 Cafe2U........................................................ 71, 100
38 A Rigorous Approach to Business Success
City Farmers Dogwash............................... 101
Crema Espresso............................................ 101
Peter Knight & Kate Groom, Smart Franchise
46 Opportunity for Big Business
John O’Brien, PoolWerx Corporation
56 Business to Business Franchises: A Strong Growth Sector
Rod Young, DC Strategy
Domino’s.................................................... 27, 101 endota Spa. .............................................. 31, 102 Fasta Pasta...................................................... 102 Fastway Couriers.................................. IFC, 102
FC Business Solutions................................... 17
Dr Michael Schaper, ACCC
90 You Get What You Pay For
Christina Andrews, DC Strategy Lawyers
72 The new Franchising Code: What you need to know
Frog Rent.................................................. 35, 103 Gold’s Gym...................................................... 103
Hairhouse Warehouse............................ 2, 103
Jumo! Swim Schools................................... 104
Franchisee in Action 24 Dream Doors Australia 76 Hairhouse Warehouse
Just Cuts........................................................... 104 Just Lashes. .................................................... 104 Luxaflex Window Fashions................ 29, 105 Primal Pantry................................................... 105 RedCat. .................................................................. 1 Rent the Roo............................................79, 105
Scrooz........................................................ 83, 105
40 Spray Pave Australia
Seven Seas Seafood Cafe......................... 105
80 Local Appliance Rentals
Skewerz Kebabz............................................ 106
82 V.I.P. Home Services
Snooze..................................................... IBC, 106
Taco Bill............................................................. 107 The Drug Detection Agency...............89, 107 The Interface Financial Group.................. 107
Have Your Say 86 Hairhouse Warehouse – La Porchetta – Back in Motion
Voyages................................................................ 41 Xpresso Mobile Cafe.................................... 108 Yellow Express....................................... 59, 108
what’snew! 9D Action Cinemas ride opens at Westfield Garden City, Brisbane 9D Action Cinemas has opened a new 6 seat action ride cinema at Westfield Garden City, Level 2, near Starbucks. This exhilarating amusement ride boasts the latest technology in dynamic, multi-dimensional family entertainment in Australia. Patrons experience dramatic movement in every direction while secured in the Ferrari style seats. The movement is synchronized with the animated 3D movie being screened with surround sound, while dramatic effects such as rain, wind, snow, lightning, bubbles, fog and leg whips create a frenzy of sensations. Enjoyed by adults and children alike, patrons actually feel like they are part of the movie. There are many movies to choose from and each ride lasts between 6 and 9 minutes. Typical favourites are Roller Coaster, Snow War with great rides for younger children. Prices range from $7 for infants, $12 for students and $15 for adults, however, substantial savings are available for 2 successive rides for different movies and families of 4 persons get the special family rate of only $40! “The technology is leading edge and the systems and machinery are especially designed for Australian conditions” said Nigel Corne, the Managing Director. “This is the ultimate simulator amusement ride
and safety and care have been our primary concerns. Video monitors outside allow parents to watch their children on the ride if they are not brave enough to experience it themselves!” said Lyndel Gayle, the Franchisee. The latest Household Survey showed the average Australian spent $1,236 on goods and services, an increase of 38% or $4,343 per week since 2004. One of the largest increases was in recreation, up 41% or $47 per week. This highlights the growing opportunity for 9D Action Cinemas franchises as the focus is on the recreation market. 9D Action Cinemas are located in major regional shopping centres or tourism precincts.
New powers for ACCC will strengthen franchising industry Changes to the mandatory Franchising Code of Conduct came into effect on 1 January 2015. The Australian Competition and Consumer Commission has new powers to: - issue infringement notices of $8,500 for body corporates ($1,700 for individuals and other entities) and - seek penalties of up to $51,000 in court for serious breaches of certain Code provisions. “The ACCC welcomes these changes to the Franchising Code as valuable additions to our arsenal. Rogue operators should be on notice that the ACCC can now seek significant penalties for serious breaches of the Code,” ACCC Acting Chair Dr Michael Schaper said. “However, these new powers will go unnoticed by the vast majority of franchisors and franchisees who do the right thing.”
The changes introduce a good faith obligation into the Code. This obligation requires both parties to a franchise agreement to remain loyal to the contract that they have signed. Acting dishonestly, for an ulterior motive or in a way that undermines or denies the other party the benefits of the contract would breach the good faith obligation. “Franchisees and franchisors will still be able to negotiate and make agreements in their own interest but this new obligation requires all parties to be honest and upfront in their dealings,” Dr Schaper said. The code will also now require increased disclosure prior to entering a franchise agreement, greater transparency around the use of marketing funds and clarity around whether the franchisor or franchisee can operate online. The ACCC received more than 500
6 Business Franchise Australia and New Zealand
franchising related complaints last year. Of these, one third related to disclosure matters so the improved disclosure requirements in the Code will address a key concern. “The ACCC will be focusing on particularly serious conduct and, as always, will take a common sense approach to enforcing the Code,” Dr Schaper said. The new Code applies to all franchise systems and franchisees across Australia. You should seek legal advice if you are still uncertain about your rights and obligations under the new Code.
CHOICE HOTELS AUSTRALASIA KICKS OFF 2015 WITH FIVE NEW PROPERTIES Situated in tropical north Queensland, the new 4.5 STAR Clarion Hotel Townsville offers the ultimate in comfort and class. The 4 STAR Comfort Inn Swagsman in outback Queensland is close to popular attractions such as the Miles Historic Village and Bunya Mountains National Park.
Choice Hotels Australasia, Australia’s largest hotel franchisor has kicked off 2015 by announcing five new hotels in February, adding to their expanding portfolio of properties across the country.
Trent Fraser, Choice’s Chief Executive Officer, said he was proud to announce the addition of five new properties and looks forward to the franchisor’s strong growth and expansion in 2015.
Located in Queensland, Victoria and New South Wales, the new additions kick off another expected strong year of growth for Choice Hotels in Australia across all five brands - Econo Lodge, Comfort, Quality, Clarion and the Ascend Hotel Collection.
“Choice Hotels is dedicated to continually growing our portfolio and we always enjoy working with our new franchisees to ensure they provide high quality accommodation and experiences for their guests,” said Mr Fraser.
Choice Hotels also welcomes the new Comfort Inn Towradgi Beach, located in the small beach-side suburb of Towradgi, New South Wales. Further expanding its Victorian offering, Choice Hotels’ two new additions include Melbourne-based suburban property the Quality Inn and Suites Knox and the Comfort Inn Drouin, located in the heart of Victoria. Choice Hotels Australasia has more than 270 hotels across Australia, New Zealand and Singapore, with an excess of 11,000 rooms. Choice Hotels Australasia is a 100 per cent owned subsidiary of Choice Hotels International, a publicly listed (NYSE: CHH) company in the United States with more than 6,300 hotels and 500,000 rooms in more than 35 countries and territories.
Franchise Council of Australia elects new Chairman Michael Paul, CEO of Pack & Send ends his two year term as FCA Chairman and welcomed the incoming Chairman Warren Willmot. “Following the end of my two-year term serving as FCA Chairman, I am very pleased to announce that the Directors of the FCA have elected Warren Wilmot as Chairman of the Board of Directors. “Warren is CEO of 7-Eleven Stores and has a long history in Australian franchising and with the FCA. His experience also includes being a Director of the Australian Association of Convenience Stores, and one of three International Directors on the Board of the National Association of Convenience Stores in the USA.
“Warren’s experience, passion, insight and leadership as Chairman will be incredibly valuable to the FCA and its members, as the organisation pursues its mission of promoting, enhancing and protecting Australian franchising, and creating opportunity and reward for both franchisors and franchisees. “The Directors have also elected both myself and Jason Gehrke as Deputy Chairmen to ably assist Warren in his role. “As the outgoing Chairman I also would like to take this opportunity to personally thank our Board members who gave so much of their time, skill and effort over the last two years to ensure the FCA continued to grow stronger. They, together with our volunteers
at chapter level and National office staff are very special people - and it has been a privilege to serve as their Chairman.”
Business Franchise Australia and New Zealand 7
what’snew! Personal Training franchise expands Australia-wide by saying “Gyms suck!” demand and focus on becoming Australiawide. The move has paid off so far with franchises in Sydney and Melbourne sold and up and running successfully along with many more in the works across Australia. Hunt is the first to admit his “Gyms suck” comments about much of the fitness industry are controversial, “less than 1% of Australia is into strutting it at the Gym like a body builder, yet 63% of the country is overweight or obese, and the number is partially that high due to the 1% scaring people away from Gyms that really need help. I really don’t care what the 1% thinks if I can help 63% of people”.
Queensland based Fitness Enhancement Personal Training has just sold their first Sydney franchise only five months after selling their first Melbourne franchise. The Gold Coast success story was started on just $400 by a then 19 year old Scott Hunt in
1999. In recent years the brand has seen huge growth with the company covering every Gold Coast and Brisbane suburb to become the largest Personal Training company in QLD and the third largest in Australia. 2014 saw the company franchise to cater to
Sydney franchisee Sue Stedman who has just opened in Bondi couldn’t agree more, “exercise can be a life saver, literally a life saver for some people, so it’s exciting to be able to offer Fitness Enhancement sessions to all the people who are avoiding it and can now achieve their goals one on one with me in 100% privacy”.
ABS December 2014 retail trade figures show 0.2% increase A great result for Christmas trade but government must drive growth for 2015 The Australian Retailers Association (ARA) said the seasonally adjusted rise (0.2 per cent increase) in monthly retail trade figures (month-on-month) reported February by the ABS followed a 0.1 per cent rise in November 2014. Year on year retail growth rose 4.1 per cent (seasonally adjusted, compared to December 2014) - a very positive sign for the retail industry. ARA Executive Director Russell Zimmerman said the ARA had hoped December retail trade would see 6 per cent year on year growth but 4.1 per cent was still a great achievement for the industry. “While most retail businesses enjoyed a
steady month of sales in December, feedback from retailers is that there was a major postChristmas sales surge which won’t be fully reflected in these December sales figures. “Uncertainty in the build up to the Victorian, New South Wales and Queensland elections may have also had an impact on confidence in the lead up to Christmas, which is always the case with elections. “Industries which experienced rises were clothing, footwear and personal accessory retailing (2.7%) and food retailing (0.3%). These rises were to be expected with apparel and accessories proving popular choices for Christmas gifts as usual, and many specialty clothing and footwear stores employing highly effective marketing strategies for their Christmas promotions this year. Food
8 Business Franchise Australia and New Zealand
retailing was also always going to see a sales increase, with food remaining an integral part of the festive season for all Australians. “In seasonally adjusted terms the states which displayed rises were Queensland (0.6%), New South Wales (0.2%), Western Australia (0.5%) and the Australian Capital Territory (0.4%). Victoria was relatively unchanged (0.0%) and there were falls in South Australia (-0.4%), Tasmania (-1.3%) and the Northern Territory (-0.1%),” Mr Zimmerman said.
Australian industrial relations review to examine penalty rates • Fair and equitable conditions for employees; • The maintenance of a relevant safety net of conditions for employees; • Productivity, competitiveness and business investment; and • The needs of small business.
The Government has released the Terms of Reference for the inquiry into Australia’s workplace relations framework to be conducted by the Productivity Commission. “This inquiry will ensure that the laws are meeting their objectives and contributing to productive, rewarding, competitive and harmonious workplaces,” Minister Abetz said.
“The inquiry needs to hear from the smallest and largest businesses, from the individual employee to the largest trade union,” Minister Abetz said.
“I encourage all interested parties to make submissions on what has worked well and what needs to be improved.” The Terms of Reference will require the Commission to assess the impact of the workplace relations framework and consider improvements, taking into account certain key interests, including: • Job creation;
The Productivity Commission will also be asked to make recommendations about how the laws can be improved, bearing in mind the need to ensure workers are protected and the need for business to be able to grow, prosper and employ. Submissions can be made to the Productivity Commission at: www.pc.gov.au/inquiries/ current/workplace-relations/
EXPLORE EVERY OPPORTUNITY AT FRANCHISING EXPO One of the most challenging things for entrepreneurs planning to start or buy a business is deciding which one best suits their skills, budget and lifestyle. That’s why the Franchising and Business Opportunities Expo, which opens in Sydney 27-29 March, is so popular year after year – it showcases a wide range of businesses under one roof, as well as offering expert advice and information. “Events like the Franchising and Business Opportunities Expo allow a close up look at brands you may be interested in,” says the Franchise Council of Australia’s General Manager, Kym De Britt. “One of the fundamental ingredients for success as a franchisee is brand passion and culture fit. Being able to speak face to face with franchisors and compare several businesses under one roof is incredibly valuable.” As always, a wide range of industries will be represented at the Sydney Franchising & Business Opportunities Expo including renowned brands such as The Coffee Club, La Porchetta, Minuteman Press, Endota Spa and Poolwerx. The Sydney Franchising & Business Opportunities Expo is on 10am5pm Friday 27 March – Sunday 29 March 2015 at the Royal Hall of
Industries at Moore Park. Pre-register at franchisingexpo.com.au for a discounted entry fee. Sydney’s show will be followed by the Brisbane Franchising & Business Opportunities Expo 18-19 July at Brisbane Convention & Exhibition Centre, and the Melbourne Franchising & Business Opportunities Expo, 21-23 August at Melbourne Exhibition Centre.
Business Franchise Australia and New Zealand 9
cover story: In X pr ess
grow your business
with a global superbrand Founded in 1999 InXpress have developed their franchise concept through sustained growth, making InXpress one of the world’s largest franchise systems of worldwide express parcel, delivery and transportation services. A trusted shipping advisor, InXpress serve their customers in over 15 countries worldwide, providing complete shipping solutions, tailored to the specific needs of small and medium sized businesses.
Changing of the Guard Bringing his extensive franchising experience and skills Glen Mckay, joined InXpress as the General Manager of InXpress Australia in August 2014. Spear heading InXpress’ plans to further increase the Australian footprint while adding additional value to customers through franchisee training and enhanced services. Working in unison with Lindsay Birley who, after a strong tenure and an explosive year within the Australian business, moved to the position of CEO InXpress Asia Pacific, Glen is committed to ensuring that InXpress delivers an internationally customer focused, fully automated shipping solution. “My role within InXpress Australia is to primarily manage the franchise support centre which provides outstanding support
to our existing franchises, whilst ensuring that our target over the next 12 months to increase by a further 24 offices is achieved. With four new franchisees in key locations within a short space of time, we are on target to achieve this. This will allow InXpress to bring the unique benefits of the business to all regions of Australia, whilst capitalising on international business development plans,” Glen explains.
Innovation InXpress offers an innovative business to business service to any industry requiring express shipping solutions and has developed a unique and user friendly web based software program called Webship. This best-in-class customer service and online automating shipment processing allows customers more free time while saving them money on courier costs. The Webship standard solution provides customers with multiple services from multiple carriers on a single monthly invoice. Focusing its core services around International Air Express, Domestic Air Express and Domestic Road Express, the InXpress franchise model leverages the volume spend with world class carriers, such as global superbrand DHL and domestic carriers TNT and Toll to provide competitive shipping rates. This ensures value added services to customers, which are normally only extended to large multi-national clients. Glen continues, “The relationships that we have built with our three core carriers, DHL, TNT and Toll sets us apart from our competitors. We view them as business partners and each carrier is a contributor to the success of our business.
“With significant experience and expertise in the transportation and franchising industry, we are in the best position to support a new franchisee’s business.” 10 Business Franchise Australia and New Zealand
“Most re-sellers of freight are simply that, running an independent business. With InXpress, each partner is involved in our ongoing incentive and marketing programmes, both to our franchisees and the public and they also actively participate in all of our corporate events throughout the year.” This unique relationship with their partners, aggressive growth plan plus Glens’ wealth
“In addition to the support offered, the training is second to none. When a franchisee joins the network, each is given extensive training by the support office and also out on the road.” In addition to the support offered, the training is second to none. When a franchisee joins the network, each is given extensive training by the support office and also out on the road. Glen says, “A five day intensive boot camp training programme is conducted by the US Vice President of Training, three times a year as part of a worldwide training regime. “Until such time as people can attend the intensive boot camp either within Australia or overseas as part of the global network of InXpress, our Business Coach Jenni McFaull runs mini bootcamps to quickly get our franchisee’s business working effectively and efficiently. Jenni and I also provide support out in the field, conducting business reviews, offering advice and spending time meeting the clients with the franchisees. “With significant experience and expertise in the transportation and franchising industry, we are in the best position to support a new franchisee’s business.”
Benefits to franchisees of experience all contributes to meeting the rapidly expanding carrier’s global objectives of reaching over 300 franchisees worldwide in the coming year.
A global carrier with a proven concept InXpress locations across Australia have doubled in the last eighteen months which gives more small and medium sized businesses the opportunity to save even more time and money on their shipping needs. “With franchisees in US, UK, Mainland Europe, Canada, Mexico and Asia wide, our objective is to reach over 300 franchisees worldwide and we are currently on target to meet this objective. The target for Australia is to implement 24 franchisees within Australia in the next 12 months,” says Glen. Franchisees come from varied backgrounds but all have one thing in common, they are able to follow the model, which is proven
to be successful. “Our franchisees are all motivated to succeed and are people focussed. People with strong sales backgrounds are the norm. However, we have also found that new franchisees, with limited or no sales experience and no transport or logistics experience have been successful as they have the drive and discipline to follow the business model,” continues Glen. The InXpress support centre works closely with all franchisees on a daily basis, reducing administrative duties including accounts, invoicing and credit control. All of which allows the franchisees to focus on their business, allowing more time working in the field and with their customers, rather than on administrative duties. Administration, operational support, business development, IT and marketing functions are all located within the support centre.
By becoming an InXpress franchisee you receive low entry costs, a low risk business system, no inventory or warehousing, a minimal employee base, high income potential all with ongoing training and support. InXpress are currently recruiting for franchisees Australia wide, with a specific focus on Perth, Adelaide, Tasmania and the Northern Territory. Whatever your location InXpress represents a unique opportunity for you to build financial freedom, within a global network. If you’re interested in becoming a part of Australia’s fastest growing franchise model contact please contact Meredith Ham on email@example.com or call 0418 600 919. Further information on franchising with InXpress can also be found by visiting our E-tour at: W: www.inxpressaus.info/
Business Franchise Australia and New Zealand 11
fr anch ise cou nci l o f aust r a l i a
Compliance is key to
success in franchising
12 Business Franchise Australia and New Zealand
“While no franchisor can guarantee a franchisee’s success, they work to provide those who invest in their brands with the tools to thrive.” Warren Wilmot | Chairman Franchise Council of Australia
Many readers will have picked up this magazine at the Franchising and Business Opportunities Expo in Sydney. If you missed the first event, there are other opportunities to attend the show later in the year, in both Brisbane and Melbourne. While trade shows like the Franchising Expo are a great first step into the world of franchising, it is important not to enter into binding contracts over excited and under researched. Thorough research before entering into a franchise agreement is paramount. You need to understand your rights as well as your obligations, to ascertain whether business ownership within a franchise network is the right move for you. One aspect of the journey into franchising spoken about far less than finding the right lawyer or accountant to protect your interests, is the need to understand your obligations as a franchisee. Though you are purchasing your own business, you are also agreeing to run that business via a system that has been developed across a number of territories, and likely years. The franchisor is providing you access to a brand and product or service, on the agreement that you will manage that
brand to a set of operational measures laid out for you and the rest of the system. Failure or inability to do this can result in communication problems between yourself and your franchisor, issues with the quality or delivery of your product or service, and inconsistency across the brand, to the detriment of yourself and all other franchisees. Compliance is a matter franchisors take incredibly seriously. While no franchisor can guarantee a franchisee’s success, they work to provide those who invest in their brands with the tools to thrive. Operations manuals that must be followed, approved suppliers, chosen locations, brand-wide marketing initiatives and meetings with field support teams are a means to ensure brand integrity, and to provide you with the best opportunities within your business. A harmonious and thriving system is a franchisor’s number one priority.
Are you the right fit? If you’re thinking about investing in a franchise business, it’s important to consider your personal character traits and how they will fit with the system, and the franchisor’s bigger picture. What are your reasons for wanting to run a business? If you’re looking for a proven business with systems in place and expert support, you’re on the right track. Franchising is a great way to start if you’re a first time business owner. If you’re particularly entrepreneurial or spontaneous then franchising may not be for you. For those inclined, franchise brands offer
a brains trust via head office and other franchisees that you simply could not tap into operating an independent business. Franchising, like any other small business carries risk. Along with risk from external factors, there is always the capacity for disagreements within the business relationship. Figures released by Griffith University late last year show disputation in franchising sitting at 1.5 per cent, a relatively low figure which has remained steady for nearly a decade. What’s important to note here is the most common cause of franchise disputes arise from issues related to system compliance. These kinds of disagreements are avoidable. Many of the issues that arise during the tenure of a franchisee should come as no surprise. The stipulations for compliance in each system are laid out explicitly in the franchise agreement, disclosure document and operations manual, all of which a prospective franchisee has access to before signing on the dotted line. Since the new Franchising Code of Conduct was implemented on 1 January this year, the Australian Competition and Consumer Commission has reissued The Franchisee Manual which is a digital guide designed to help prospective franchisees understand their rights and obligations under the new Code and provides advice on how to communicate effectively should any issues arise. You can access the new guide here: accc.gov.au/ publications/the-franchisee-manual You can find more advice about purchasing a franchise at: W: www.franchise.org.au
Business Franchise Australia and New Zealand 13
e x pert a dv ice
An Expert’s Guide to
Picking Great Franchises (and Guitars)
If you’re interested in purchasing a franchise business you’ve probably been told numerous times to do your research. This is good advice, but please be thorough. Sloppy research is just as bad as no research. This article will provide you with a framework for doing your research. The best way to learn the truth about something is to gather information from three independent sources. Then look for consistencies or inconsistencies in the information you’ve collected. This process is called ‘triangulation’ and it can be used in many areas of life, including helping you to make an informed decision when choosing a suitable franchise. Before explaining how to apply triangulation when searching for a suitable franchise opportunity let me share an example of how I use it to make good decisions in an important area of my life.
14 Business Franchise Australia and New Zealand
“The best way to learn the truth about something is to gather information from three independent sources. Then look for consistencies or inconsistencies in the information you’ve collected.” Greg Nathan | Founder Franchise Relationships Institute
Putting triangulation into action When I travel internationally as part of my work, I love to visit music shops and buy second hand guitars. If I see something in a store I like, first I play it, testing out its sound and checking there is nothing obviously wrong with it. That’s one information source covered. If it sounds, plays and feels good, next I’ll ask a technical person in the shop for their opinion. I first find out about their experience and knowledge, for example if they play professionally. If I think they know what they’re talking about I’ll then ask for any background information they have on this model and this specific guitar. I might also ask them to have a play on the guitar themselves and give me their opinion as a fellow musician. That’s my second source of information. Then I’ll search Google for reviews of this particular model, as well as to compare the price in the shop with what’s available online. This third source of information completes my triangulation process.
Good sources of information There is always good and bad information available on any topic, so you need to be discriminating in what you read and who you listen to. When searching for a franchise there will be people with a vested interest in influencing your decision, just as there will be opinionated friends and relatives who are well intentioned, but ignorant of the facts. When seeking out the true nature of a franchise opportunity, there are three sources of information I suggest you pay attention to: 1. The experience of existing franchisees. You can explore this by asking them specific questions or finding out how they’ve responded to questions in independent franchisee satisfaction surveys.
2. Your own experience. Pay particular attention to your experience with members of the franchisor executive team and how they behave and respond to your questions. 3. Market research. This includes the brand, the industry sector it operates in and the territory or site where you are intending to operate the business And a word about some not so good sources of information.
Not so good sources of information Here are three sources of information, which superficially may seem compelling but you need to be slightly sceptical of: 1. What the franchise salesperson says. This person is likely to have a significant vested interest in signing you up. I’m not saying you should discount what they say, just that you should not rely on this alone as they are obviously going to focus on the positives and play down any negatives. Some franchise sales people pose as independent business coaches. If they are receiving a hefty commission from the franchisor there is no way they can be deemed independent. 2. What you read in the franchisor’s website and sales materials. This will be carefully written to sell you on the sizzle, such as lifestyle benefits and being part of a well-known brand. Again, it’s not that it isn’t true, just that it’s likely to be biased to portray the best picture possible. 3. What you read in publications and on the internet. While you may think this is all objective information, most of it has been crafted by people with vested interests to put forward a point of view. PR and marketing people want to paint the franchise in a positive light. Disgruntled franchisees will want to paint the franchise in a negative light. Even independent business journalists can be biased in
positive or negative ways. Some journalists are anti-franchising and some are commissioned to write positive franchising stories.
Questions to ask existing franchisees When talking with existing franchisees always show respect and gratitude for the information that is shared with you. Reward honest, useful comments with sincere thanks, appreciation and a smile. Treat the conversation as a gift rather than an entitlement. These people will have other priorities in their life than to spend a lot of time talking to you. And many people will naturally be reluctant to share personal and business information with a stranger. Because some franchisors offer a commission to existing franchisees for referrals, you may want to politely ask if this person will be receiving a commission if you proceed, as this may bias their comments. That being said, here are some useful questions; after asking each question probe for more information, for instance by saying “Could you tell me some more about that?” or “Why do you say that?” • “Knowing what you now know, would you purchase this franchise again?” If they say yes, ask why? If they say no also ask why? It may not be the fault of the franchise system. Either way you will learn some useful information. • “How profitable is the business after considering all your costs?” Explore how this compares with the expectations they had when they went into the business. If this is a retail business, consider the rental they are paying and how this compares to the site you are looking at. Rent is usually a large fixed expense that can have a big impact on profitability.
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• “Has the franchisor delivered the level of support they promised you?” Also “What does the franchisor provide for you that is most useful and what do you wish they would do differently?” Again probe why they feel this way. • “What type of marketing support does the franchisor provide to help you attract customers and build local awareness of your business?” Ask specifically about what tools and support have been available and how effective these are. Many franchisors provide effective local marketing tools but expect franchisees to implement these. So if their comments about marketing are negative, explore how much effort this franchisee puts into their own local marketing. • “What do you enjoy most and least about running the business and being part of the franchise network?” Consider how similar this person is to you when assessing their comments for relevance. • “If I were a friend or family member, on a scale of 1 to 10, how likely would you be to recommend purchasing a franchise with this group?” If it is a 7 or below ask why and what would need to happen for this to be higher. If it is 8 or above ask them why they are so positive.
Things to consider about your own experience You should have had at least one, preferably two or more meetings with the franchisor team. In these meetings see if you can find out the following information: • Is there some type of board or group of key advisors to oversee important strategic decisions? There should always be an advisory board to ensure the founder or franchisor leadership team is running the organisation responsibly. • What type of consultation takes place with franchisees before important decisions are made? Ask them to give you some examples. Some franchisors believe they are all knowing when it comes to making decisions. This is a common source of franchisee dissatisfaction. • What relevant experience do members of the management team have and how long have they each been with the company? Tenure is a useful indication of franchisor commitment and stability.
“When searching for a franchise there will be people with a vested interest in influencing your decision, just as there will be opinionated friends and relatives who are well intentioned, but ignorant of the facts.” • Have any company employees left to buy a franchise? This is an indication of whether they have faith in the business model themselves. • What plans are there for the future of the network and what is the rationale for these? Consider how clearly they can explain their strategy and how feasible this seems. If this is an established franchise network ask how they are adapting to the changing needs of the market? Also, how they are maintaining the network’s competitive edge? • What marketing support is provided to franchisees and how is the effectiveness of this measured? This should be consistent with the information you have gained from your separate franchisee research. Also consider the culture and how you feel after meetings with franchisor executives. • Have they been open and straightforward or do you get the feeling you are not being told the whole story? • Do you feel clear or confused after your meetings with them? • Have they been able to back up their claims with facts or have these been largely based on their beliefs and opinions? And has what they have told you been validated from your own research? • Have they been reliable in following up in their promises or do they come back with excuses for not providing what they said they would? You need to consider if this is the sort of culture you want to be part of.
Things to consider about the brand, industry or territory When you buy into a franchise business you are also buying into a market and an industry. You should, as much as possible, familiarise yourself with the following: • Who is the target market for the business and how well known and respected is the
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brand amongst the target market? The franchisor should have data on this. • What level of market share have existing franchisees been able to achieve in their local markets? Good franchisors also track this type of information. • Who are the market leaders in this industry and where does the franchise you are looking at fit? It doesn’t need to be the leader but it should have a clear, unique position that gives it a competitive edge. • What are the predicted trends for this industry? Is it growing? Is it changing? Consider what this means for you if you come into the business at this stage. • What are the demographics in the territory or site you are looking at? How does this compare with the target market of the brand? This final question is absolutely critical and is often the main reason why some franchisees perform better than others – they basically have a better location. • Also carefully consider the rent you will be paying. Is this realistic compared to your expected sales? You should be able to create some sales projections based on the performance of existing franchisees in similar types of locations. In summary, when choosing a franchise (or a guitar), in fact when choosing the best course of action in almost any area of life, good quality research using the triangulation process is a smart approach. Do this and good luck will be a bonus, not a necessity. Greg Nathan is Founder of the Franchise Relationships Institute (FRI), leading global providers of learning programs to help franchisors and franchisees create profitable partnerships. He is also author of several bestselling franchising books including Profitable Partnerships. For more information about Greg and FRI’s educational work in franchising go to: W: www.franchiserelationships.com
FC_AD-Franchising_JAN2015.qxp_Layout 1 5/02/2015 1:16 pm Page 1
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Business Franchise Australia and New Zealand 17
PROFILE : Yogu rt l an d Aust r a l i a
You Rule with
Yogurtland Founded in 2004 by Phillip Chang, the first Yogurtland store opened in Fullerton, California in 2006. After achieving great success and just a year after the first store, the first standalone Yogurtland store opened in Irvine, California. Phillip envisioned a concept centred on guest empowerment, and ensured that Yogurtland’s objective has always been focused on guest satisfaction. With the wide variety of yogurt flavours and toppings offered in the store, the choices are limited only by the guest’s imagination, allowing Yogurtland customers to create their own mouth-watering creations as big or small a serve as they like!
Yogurtland Australia In December 2011 Paul Siderovski and his family were holidaying in Hawaii and discovered the most amazing tasting frozen yogurt around and after several visits to the store, Paul’s family suggested he bring Yogurtland to Australia. The Yogurtland Australia story began on 17th January 2013, when Paul opened the first Yogurtland store in Macarthur Square, Campbelltown and this was soon followed
on 23rd March 2013 with the second store at Manly.
size, operating more than 296 locations world-wide… and are still growing.
With best–in–class, multi–tiered training and support programs in place, now is the ideal time to join the pioneers of the frozen yogurt industry
With an established and recognised brand, proven business system, aggressive marketing activities, plus start-up and ongoing support, Yogurtland Australia are currently seeking qualified franchisees to develop, own and operate locations throughout Australia.
To support you and your investment in the Yogurtland brand, you receive: • In store training; • Operations manual and training tools; • Grand opening assistance; • New store opening support and staff training; • Ongoing field support; • Marketing support and activities.
A leader in the field As the pioneer and leader of the self-serve frozen yogurt experience, Yogurtland provides positive treats, an open optimistic spirit to customers in the heart of neighbourhoods everywhere. The Yogurtland tag line ‘YOU RULE’ expresses the belief that the customer should always rule the experience and that customer empowerment is the life of the brand. GET REAL tells customers the Yogurtland products are: 3 Real Yogurt from Real Cows. 3 Real flavour is worth searching for. 3 It’s what’s inside that counts. Get Real. 3 Real fruit doesn’t grow in bags. Following three years of trail-blazing growth, Yogurtland has almost tripled in
18 Business Franchise Australia and New Zealand
For more information contact: P: 1300 709 709 W: www.yogurtlandaustralia.com.au/ franchise
A CULTURE OF INNOVATION • A frozen yogurt brand that pioneered the self-serve model • One of the only major brands that uses proprietary flavours
• The best store-level operating practices • Driving industry standard
A CULTURE OF LEADERSHIP • The #1 frozen yogurt franchise for investor as ranked by FranchiseChatter • The fastest frozen yogurt brand to grow to 100 stores
A CULTURE OF SUCCESS • Unprecedented growth and performance with 21 stores across four states and sites secure at another 17 locations across the country.
Do you have what it takes to be a business owner? 1st
Up to 60 flavours t o choose from!
Yogurtland is the #1 Frozen Yogurt Franchise for Investors
as ranked by Franchise Chatter in the USA pings! remium top p 5 4 n a h More t
1300 709 709
Business Franchise Australia and New Zealand 19
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FINANCIAL TIPS FOR PROSPECTIVE FRANCHISEES
If you are reading this article, you are likely to be thinking of buying a franchise. That can be a scary prospect. For some of you, the purchase of a business (franchised or not) will be the single biggest purchase you ever make in your life, or perhaps the second biggest after your house. For others, the purchase might involve a relatively small sum. However, whether it is a small or large purchase, it is your money and it is important that you make a wise investment decision. We have had many years’ experience in advising prospective franchisees to purchase (and not to purchase!) franchises. In this article we will try to give you some helpful
financial tips in relation to the purchase of a franchise.
Review the Disclosure Document carefully
Understand the legislation governing franchising
The Code provides you, the prospective purchaser, with some protection, and you should be aware of what this protection is. From a financial perspective, there will be useful information available to you in the Disclosure Document. A Disclosure Document is a document which must be given by franchisors to intending franchisees at least 14 days before you sign the Franchise Agreement. It contains much useful information about the franchise system and its owners, and you cannot properly evaluate a franchise without reviewing that document. In relation to financial issues, it will include:
Franchising in Australia is governed by a Code of Conduct which is administered by the Australian Competition and Consumer Commission. This Code of Conduct is compulsory and must therefore be followed by all franchisors. It applies to all businesses which fit within the definition of a franchise under the legislation, irrespective of whether or not the business opportunity is called a franchise. Some people will call the businesses they have for sale franchises, some will call them licences, some will simply call them business opportunities – but if that opportunity or licence falls within the definition of a franchise, it is a franchise and the Code must be complied with.
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• Details of the franchisor’s estimate of the initial costs involved in acquiring the franchise.
“Before you get too far into the process of purchasing a franchise, educate yourself about business and about franchising.” Jamie Bishop | Partner McLean Delmo bentleys
• Details of ongoing fees payable to the franchisor. • Possibly, sales and expenses and likely profit for a model franchisee. Alternatively, the franchisor can simply state in the Disclosure Document that it does not provide any earnings information. • The most recent profit and loss and balance sheet for the franchisor (or alternatively, a statement by the directors of the franchisor, and verified by a registered company auditor, that the franchisor is able to meet its debts as and when they fall due).
Educate yourself Before you get too far into the process of purchasing a franchise, educate yourself about business and about franchising. There are plenty of resources for example, • There are publications available from newsagents and the Franchise Council of Australia. • Go to the website of the Franchise Council of Australia (www.franchise.org.au) and review the material available there. • Small business corporations in most states run seminars on franchising and business. • Various organisations (including the authors’ firm) run regular free seminars on buying a franchise. • An appropriate search of the internet will generate a vast amount of information. But be selective in your research on the internet – the information there is not always reliable.
Know your borrowing capacity All of the major banks and other major lenders to franchises have an accreditation system for franchises. If a franchise system is accredited with a lender, then you will have to supply a portion of the finance – usually between 30 and 50 per cent (either in cash or in the form of security against the property)
and the lender will supply the remaining 50 to 70 per cent with the only security being the business itself. Conversely, if the system is not accredited, you will have to put in cash to buy the business, or borrow money from a lender against security of a property, but the lender will not usually provide any loan against the business itself. As a practical example, assume you own a house worth $300,000 and you do not have a mortgage. If you wish to buy a franchise, and the franchise is not accredited with one of the lenders, then you have the ability to buy a franchise for up to $240,000, because the lender will normally make a loan to you of up to 80 per cent of the value of your house ($300,000 x 80% = $240,000). On the other hand, if the system is accredited, and the lender is prepared to lend up to 60 per cent against the business itself, then you have a borrowing capacity of $600,000 – the lender will lend you 80 per cent of the value of the house ($240,000) and it will also lend to you a further 60 per cent of the total purchase price against the business itself (another $360,000). It should therefore be apparent that your borrowing capacity is significantly greater when you are buying a franchise in a system that is accredited with one of the major lenders. You should be aware that the terms of any loan that is secured against the business itself will be significantly different to the terms of the loan that is secured over a property. In particular, the loan secured against the business will have a higher rate of interest and a shorter repayment period.
Choose the right business structure Choosing the appropriate business structure for you is of paramount importance if you wish to protect your assets, minimise your ongoing income tax liabilities and have flexibility in distributing income in a tax effective manner.
The structures available to you in Australia are a sole proprietorship, partnership, company and trust, or a combination of these. The structure that will best suit you will depend on your circumstances and an advisor experienced in franchising will be able to advise you which structure suits you best. For example, if you want to keep the business as simple as possible, if income splitting is of no benefit to you and you are not concerned about asset protection, then a sole proprietorship may be best for you. In a sole proprietorship, you include in your personal tax return the profits of the business and pay whatever taxes are due. If you wish to achieve some income splitting, but are not too concerned about flexibility or protection of assets, then it may suit you to go into partnership with your spouse or another person. You then include in your tax return your share of the partnership profits. A company alone, or a trust with a company as trustee, is a more complicated structure and more expensive to set up – the set-up costs could be in excess of $2,000 for a trust and company, whereas the cost to set up as a sole proprietor may be as little as $70 (the cost of the registration of a business name). However, the use of a company will provide you with the benefit of limited liability – that is, help you keep your personal assets separate from your business assets and limit the chance of you losing your personal assets in the event of the business becoming insolvent. Further, with a discretionary trust you may legitimately distribute income to beneficiaries (yourself, your spouse, your children and possibly other family members) in a tax effective manner each year – that is, distribute the income to people in such a way that income tax is minimised each year. Get advice on a suitable structure for you from an experienced advisor before you enter into the purchase of a franchise. Good advice will reap huge benefits.
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Understand GST on the initial purchase There may or there may not be GST on the initial purchase of a business. You should clearly understand whether or not there is any GST as this will significantly affect the price that you pay. If you buy a business for, say, $110,000 and the purchase price includes GST, then in the first Business Activity Statement that you lodge after purchasing the business (which will be within three months of you purchasing the business), you will get back 1/11th of the purchase price, ie $10,000. So your net purchase cost is $100,000. If, however, the purchase price does not include GST, then you will get nothing back when you lodge your first Business Activity
Statement and the net cost of the business is $110,000. So when will there be GST included in purchase price and when will there not be? The answer is that if the sale is a sale of a going concern as defined in GST legislation, if both buyer and seller are registered for GST, and if the appropriate clauses are written into the contract, then there will be no GST included in the transaction. This means that the purchaser cannot claim any GST on the purchase price and the seller does not have to pay any GST on the selling price.
Prepare your own financial projections It is likely that in the purchase of a franchise
“Choosing the appropriate business structure for you is of paramount importance if you wish to protect your assets.”
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you will be given some financial projections. They may be included in the disclosure document. They may possibly not be included in the disclosure document but be given separately to you by the franchisor or its agent. You should, if you are buying an existing business from an existing franchisee, obtain copies of that franchisee’s most recent financial statements. None of this financial information is of itself sufficient for you to make an informed decision as to whether you should purchase the franchise. From a financial point of view, you have two decisions to make – do you want to purchase the franchise and how much do you want to pay? The only way that you can make these decisions is by preparing your own financial projections. You need to prepare detailed monthly sales and expenses and profit projections for the first twelve months for your business. The information provided to you by others is only
a guide – it is historical, not prospective, and it is coming from people who have a vested interest in you buying the business. You need to prepare your own projections using your own assumptions and information that you have gathered. Only then can you make the decision as to whether it is worthwhile to purchase the business, and how much you should pay for it.
“From a financial point of view, you have two decisions to make – do you want to purchase the franchise and how much do you want to pay?”
One particular word of warning – if there are projections provided in a Disclosure Document for a model franchisee, these will nearly always require amendment by you. The model projections may not include depreciation, they will not normally include interest (because the franchisor does not know how much money you will be borrowing), will often not include an owner’s wage (because the amount of the owner’s wage will be at the discretion of you, the owner), etc etc. The figures in the disclosure document will therefore usually not provide a realistic basis for you to make a decision about a business.
Don’t pay too much It never fails to amaze us when we come across people who will put considerable thought (and rightly so) into spending $2,000 on, say, a new television set but who will spend $200,000 on a business based on a glossy brochure and some brief conversations with a franchise broker. Do your homework and plan the purchase properly. When you are buying an existing business from an existing franchisee, the price is nearly always negotiable. Just as when you are buying a house the price the vendor will accept is usually somewhat less than the initial asking price, so it is with the purchase of a business. Do not simply pay the asking price. Be prepared to put in a much lower offer and find out what the vendor really wants. When you are buying a new franchise from an existing franchisor, there is often less room to negotiate the price. However, there is usually still some room to negotiate. Do not assume that because you know of another franchisee in a particular system that has done well, that you will automatically also do well in that system. Within all franchise systems, there will be a vast range of franchisee performances. There will be good and there will be bad and there will be indifferent franchises. To some extent this will depend on the operator (you!) but it will also depend on the location, demographics of your catchment area, etc. Do your homework,
do your financial projections and pay the right price – if you pay too much, you may never be able to make a success of your franchise no matter how well you run it.
Plan now to minimise Capital Gains Tax Capital Gains Tax is something that you pay on the sale of a business. Why, therefore, you may be wondering, does this article, which is about the purchase of a franchise, deal with tax on the sale of the business? The answer lies in the fact that your choice of business structure now may significantly influence the Capital Gains Tax that you pay on the sale of your business. For example, most taxpayers who sell an asset that has been held for more than one year, receive a 50 per cent discount – that is, they only have to pay tax on half of the capital gain. However, if a capital gain is made by a company a company does not get that concession. For this reason, many franchisees will choose not to own their franchise through a company. For many franchisees a further 50 per cent concession (the Active Asset Concession) is available. In practice, what this means is that for many franchisees, every $1 in capital gain
can be reduced to 50 cents (by claiming the 50 per cent discount) and then to 25 cents (by claiming the Active Asset Exemption). You can then choose to pay tax on that 25 cents, or avoid tax by either buying replacement active assets or by rolling the money over into a superannuation fund. So for many people selling businesses it is quite possible to avoid paying any tax on the capital gain on the sale of a business. However, the ability to do this is dependent on choosing the correct business structure at the time you buy the franchise. This area is too complicated to cover in any detail in this article, but it is crucial that you consult an experienced adviser who will ensure that your structure not only minimises your ongoing Income Tax liabilities, but also the Capital Gains Tax payable on the sale of the business. Good luck with your purchase. Jamie Bishop is the partner in charge of Franchising Division, the specialist division of McLean Delmo Bentleys. He can be contacted on: P: 03 9018 4604 E: firstname.lastname@example.org
Business Franchise Australia and New Zealand 23
fr a nchisee in action : Dr e a m Do o rs Aust r a l i a
Open the door to
your dream future Dream Doors Australia is Australia’s trusted kitchen company, providing a kitchen design service, installing new kitchens and undertaking kitchen renovations throughout Australia.
Their kitchen renovation service can save thousands of dollars compared to a new kitchen and results in an amazing kitchen facelift. Often, it is possible to renovate a kitchen, adding modern surfaces, doors, drawer fronts etc to produce a fabulous new kitchen, without needlessly discarding items such as the units, plumbing, gas and electric connections, thereby saving $1,000’s compared to re-designing and installing everything from scratch. It’s sometimes necessary to install an entirely new kitchen, either because the old one is beyond renovation or because the client requires something that is completely
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different. The latest innovative products can be seamlessly integrated with new bench tops and the latest kitchen appliances, using quality materials and experienced craftsmen. Derek Lilly, Managing Director of Dream Doors New Zealand and Australia founded the company in the United Kingdom in 2000 before bringing the successful business model to New Zealand in 2006 and on to Australia, launching at the Sydney Franchising Expo in March 2014. Derek says, “Launching Dream Doors Australia at the Sydney Franchising Expo was a great success. Selling two franchises
“It was a very easy and smooth process and after two weeks of intense training in Sydney I was given all of the tools I needed to become a successful franchisee of Dream Doors.”
Brady Morris, Dream Doors Franchisee
at the Expo is a testament to the success of Dream Doors internationally, with a fourteen year international trading history of success.” Since its inception in 2000, sales in the United Kingdom have increased every year without exception, with franchise sales turnover of £22,000,000 and the same with New Zealand, suffering through the Global Financial Crisis has not dented franchise sales and has seen exponential growth of 295 per cent in the last financial year. With a fourteen year track record of this calibre, there is no better time to join Dream Doors Australia.
Success story Brady Morris, Dream Doors franchisee for Sydney North & Northern Beaches met Derek Lilly for the first time on the Dream Doors stand at the Sydney Franchising Expo and has spent the last eight months successfully launching and growing his Dream Doors franchise. Attending the show to investigate the different types of franchises available and with no particular one in mind, Brady came across Dream Doors towards the end of the day. “After reading the signage on the stand, I
spent an hour talking to Derek and Cam and gathered more information from them. As it was the end of day, I was given some literature to read and I went back the following day to speak to them again after liking what I read. “Working in healthcare sales, being an employee was never my long term career goal. My life plan was always to become self-employed and stop being an employee. The idea of a franchise appealed as I like the structure that franchising offers and having working in a management role within McDonalds for 7 years, I saw and experienced first-hand the systems and
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fr a nchisee in action : Dr e a m Do o rs Aust r a l i a
structure in place and that appealed to me. I just needed to find the right franchise system, which Dream Doors is.” After the initial conversation in March 2014 and a further two weeks spent investigating the franchise, Brady resigned his job and flew to New Zealand. There he spent time with one of the franchisees, looking at the day to day operations of the business. From there on in, there was no looking back and Brady started the process to purchase his own franchise. “It was a very easy and smooth process and after two weeks of intense training in Sydney I was given all of the tools I needed to become a successful franchisee of Dream Doors.” Working alongside his wife Bree, also a Director of the business, Brady enjoys the many different functions he fulfils within his own business. While still working within a sales environment, he is now generating his own sales, as well as following up on leads received via the Head Office. Once an order is received, he then follows the process through to completion, from ordering the materials to observing installations and then completing the handover process with the satisfied customer. “Having complete autonomy to run my own business is important to me and a Dream Doors franchise gives me that,” Brady says. “Running your own business is hard work
“Their kitchen renovation service can save thousands of dollars compared to a new kitchen and results in an amazing kitchen facelift.” but extremely rewarding. The financial rewards are there if you work hard and the personal satisfaction is a reward in itself. “The franchise shows all the signs of a very comfortable lifestyle for me. Dream Doors offers me the structure I’m looking for but the freedom to develop my business. That’s what drew me to Dream Doors and within eight months I’ve proven myself correct,” Brady concludes.
Dream of a brighter future Recruiting Regional Master Franchisees for various parts of Australia alongside franchisees nationwide, this business is ideal for partnerships or husband/wife teams or entrepreneurs looking for a middle-market retail opportunity providing a bespoke service to a growing market. Dream Doors are searching for entrepreneurs and people with managerial, organisational and communication skills, who feel comfortable meeting and talking to people in their own homes and who possess drive, ambition, enthusiasm and the ability to sell. Kitchen fitting experience is not necessary as Dream Doors are committed to providing as much in-territory and head office support as you need, although it’s favourable if you have some sales, kitchen or design experience in the past.
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Full Business Package Dream Doors provide a full business format franchise package with extended training, support structure and a marketing launch to maximise lead flow and exposure. Alongside this you also receive: • A comprehensive head office training programme; • National franchise manager supplying interritory support; • On-site launch programme; • National advertising & localised lead generation (where applicable); • A vast range of sample vinyl doors; • European 3D full kitchen, bedroom and bathroom design software package; • Corporate uniforms and stationery; • Detailed Operations Manual; plus • Licensing rights to operate under the Dream Doors corporate identity. If you would like to join this successful international franchise system and are an entrepreneur at heart with strong sales skills, contact Dream Doors now. P: 1800 373 263 E: email@example.com W: www.dreamdoors.com.au
Domino's is not just Australia and New Zealand's leading pizza brand â€“ it's also one of the world's most advanced digital retailers. So if you're looking for a franchise that delivers on your goals, you can't go past Domino's.
Undisputed leaders in online ordering. Australia and NZ's first and most advanced mobile ordering apps.
State of the art digital store management tools in the hands of every franchisee.
Australia and NZ's only pizza creation app and only real-time pizza tracker.
Ongoing training and support for franchisees and their teams.
Innovative digital marketing with millions of customers assessable via email and social media.
A proven and trusted brand that's passionate about pizza and people.
Call 1300 131 888 or visit: dominos.com.au/franchising Business Franchise Australia and New Zealand 27
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SUCCESSION PLANS THAT WORK
Whether you plan to sell, hand over or close your business, your goal should be to facilitate an easy transition with a minimum amount of stress for all parties involved. Selling your business If you have decided to sell your business, you will need to decide the best time to sell it, how you will advise the relevant parties regarding the sale of the business and the best ways to negotiate and finalise the sale. Before deciding on a date for sale, ask yourself if your business is ready. Is it running efficiently with a solid cash flow and consistently making a profit? If not, what needs to happen for the business to become more profitable? What else can you do to make your business more saleable? The value of tangible assets, plus the
estimated value of any intangible assets, such as goodwill, determines the value of a business. Potential buyers will be happier to part with cash for a business if it will earn a decent return for them, after an equitable salary for the owner has been deducted. The seller, meanwhile, having put much time and money into forming the business, seeks to recover time and cost outlays by asking a premium over and above the asset value of the business. This premium is usually labelled as ‘goodwill’ - the capitalised cost of taking over an established business with established suppliers, clientele, cash flows, trained employees and systems of operation, all things that won’t exist for a business started from scratch.
Making a plan A sales strategy outlining the best way to advertise and conduct the sale is essential for business owners wanting to target the right buyers and maximise the sale price. Potential buyers could include suppliers, customers, competitors, management, family or other investors. Talk to your accountant about tax
28 Business Franchise Australia and New Zealand
and sale issues and get a solicitor to draft up the sale documents or memorandum of sale. A broker or agent may also need to be commissioned. Once the sale is agreed, a solicitor should draft and approve the sales document. Make final arrangements with an accountant about tax-related issues. Communicate with the bank regarding account closures, paying out debts or assigning any leases. Before you are truly free of it, be sure to file any outstanding business tax returns and a final BAS. You may also need to wind up or cancel registration of company names. Once a buyer is found, there are still a few things to consider: Have you: • Agreed on what will happen to existing staff? • Completed a credit check on the buyer? • Decided the status of warranty claims on goods and services sold before the sale is official?
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“Before deciding on a date for sale, ask yourself if your business is ready.” Labrina Tsekouras | Senior Business Development Manager VIC & TAS Westpac
• Decided if you will provide vendor finance?
• Signed a non-compete clause for a specific area or period of time? • In the case of a franchise, contacted the franchisor to notify about the sale. Once the business has been sold, there are other items that need to be done: Don’t forget to: • Disconnect telephone and power services • Return any third party equipment (EFTPoS terminals) • Cancel any business registrations • File any outstanding tax returns.
Passing it on More than 80 per cent of Australian businesses are family run. When it’s time to think about moving on, whether or not to keep your business in the family can be a big decision, particularly when it’s not clear whether a potential successor fits the bill to be a great leader. This could be because he or she lacks either the enthusiasm or know how to successfully take your business forward. Appointing such a successor risks the future of the business and, if you are relying on the business to fund your retirement, can seriously affect your quality of life as you get older. For family businesses in which most of the family has been involved from an early age, the question of whether to consider only family members as successors is often simple. For these businesses, family members tend to have strong ties to the business. In other family businesses, however, often no one but the principal is involved. Family members are not expected to get involved and succession more readily occurs outside the business. Some owners continue to have a say in the business well after they have passed it on
and this may well see the business through for the short term, even with successors not really cut out for the job. But sooner or later, you will no longer be there to guide them and they will be left to run the business on their own. Thinking beyond your role in the business is essential for a valid and workable succession plan. Documenting how the business should carry on without you is the best way to ensure you leave a lasting legacy. The wisest option is usually to nominate one successor, rather than several, but this is not always possible. Some owners successfully pass on their businesses to several of their children, nieces or nephews and have them share ownership equally. If you have more than one successor in mind, ensure they have a similar vision for the business and are all just as committed to seeing it succeed. Defining roles within the business can minimise the potential for disputes, as can having an independent board of directors and a formal dispute resolution policy in place.
Closing it down The decision to close down a business is not an easy one when its founder has invested so much time and energy into seeing it succeed. Accepting that you will receive no funds for the goodwill built up in your business, and no additional return for the hard work and capital you have invested into it, can be a challenge. Seeing your business as having served its purpose well over its lifetime can help as you prepare to wind it down. Closing down is a decision usually made when a business owner decides the business is not saleable - either because it isn’t profitable or because it relies almost entirely on its founder for its successful operation. Regardless of the reasons, a final date must be chosen for it to close and the business owner should decide when and how to inform staff, suppliers and other relevant people. To make a clean break, any business assets such as equipment and inventory should be sold
30 Business Franchise Australia and New Zealand
before winding up. Customers, suppliers and competitors may well be among the buyers of any saleable items on offer and there are several ways for the sale to occur, including an auction, through an agent or on eBay, for example. There may be tax implications for selling assets, so be sure to seek advice from your accountant.
Settle your debts All liabilities also need to be paid out. These might include trade creditors, staff (wages, superannuation, long service leave, annual leave and redundancy), tax (GST, PAYG, payroll, income and capital gains) and any existing loans or leases with financiers. You may need to investigate whether penalty clauses apply if leases or loans are paid out early. Westpac continues their long-term commitment to franchising in Australia. The bank has a national network of franchise specialist business bankers who are able to deal with the specific needs of the franchise sector. Westpac also runs a series of financial education webinars and online courses on a wide range of topics including succession planning. Details of the next webinar can be found at www.davidsoninstitute.edu.au Labrina Tsekouras is the Westpac Senior Business Development Manager for Victoria and Tasmania and specialises in the franchise sector. Contact Labrina at: P: 0418 246 903 E: firstname.lastname@example.org W: www.westpac.com.au
Business Franchise Australia and New Zealand 31
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When franchisors go bust 10 risks to fr anchisees of insolvent systems The recent voluntary administration of Pie Face has highlighted the uncertainty faced by franchisees if their franchisor goes into administration. Here are 10 key risks to franchisees of insolvent systems.
The risk of little useful information
Many insolvency practitioners do not understand franchising and the nature of the franchise relationship. Administrators will apply considerable effort to keep staff and creditors informed during insolvency - the first to ensure they keep the business operating or provide access to records while the administrators sort out the businessâ€™ position, and the second to ensure continuity of key supplies. However, franchisees are generally given the bare minimum of information.
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“Franchisees have to claim their debt owed by the franchisor like any other creditor, and end up with whatever cents in the dollar might be paid at some future point.” Jason Gehrke | Director Franchise Advisory Centre
Because staff and suppliers are recognised as creditors, they are usually betterinformed than franchisees, who may be circulated a form letter when the business is placed in administration, and then hear no further meaningful information until a sale or winding-up announcement is made. Franchisees of insolvent chains often learn more from the media about the future of their livelihoods than they do from the administrators.
Loss of consumer confidence
In previous franchise insolvencies such as that of book retailer Angus & Robertson in 2011, and whitegoods retailer Kleenmaid in 2009, the loss of consumer confidence when the businesses went into administration was so great that it accelerated the final collapse. Angus & Robertson customers were outraged when administrators announced that gift vouchers (many of which were given as Christmas presents only a couple of months earlier) would no longer be honoured, prompting a consumer backlash. During this highly damaging PR, the remaining company-owned and franchised stores were expected to trade on as usual. When Kleenmaid went under, its franchised and company-owned stores were besieged by angry customers trying to claim the goods for which they had collectively paid more than $25 million in deposits. In rare cases, some were able to buy their goods all over again in liquidation sales to ensure that their newly-built or renovated kitchens or laundries could be completed without further modifications, but many swore they would never buy Kleenmaid again, and actively campaigned against the brand in revenge.
Disruption to supply chains
Some franchise systems have preferred supplier arrangements, and others are the primary supplier to their franchisees themselves.
A manufacturer may supply its retail network of company-owned and franchised stores with the majority of their product lines. If the manufacturing facilities are scaled-back, closed or sold separately from the retail network, then a significant risk of disruption to normal supplies exists. A new buyer of the group could decide to close the factory, and outsource manufacturing altogether, in which case it is likely that teething problems with a new set of arrangements could also result in supply issues for franchisees. While it is possible for a franchisee to continue to operate when a franchisor goes bust in networks that have preferred supplier arrangements, the franchisee might find that creditors will become more risk averse, and tighten their credit terms, insist on cash up front, or otherwise cap franchisee purchases to a low limit to reduce future risk.
Franchisees of fashion accessory chain Kleins, which collapsed in 2008, found themselves selling goods at cost or below as the administrator sought to liquidate inventory held by the franchisor that could not be returned to suppliers. In any group where the franchisor has embedded itself into the supply chain and provides inventory to the franchisees, there is the risk that administrators will seek to liquidate inventory as quickly as possible through the network to generate cash, and this may be done at the expense of franchisee margins or in breach of the brand’s established price positioning. Either way, this can be damaging to a franchisee’s business.
Diminished franchisor support
Administrators will question all costs in a business, particularly labour costs. Franchisor head office staff who survived the
franchisor’s descent into administration may still be made redundant by the administrators in an attempt to restore profitability and improve the saleability of the business as a going concern, but in doing so often reduce the very resources for which franchisees pay royalties. Consequently, franchisees of an insolvent system might find that their field support officer has been let go, or now has two or three times more franchisees to support as his colleagues have left. A reduction in field support is likely to occur concurrently with a reduction in marketing personnel and other head office functions that directly or indirectly provided support, meaning that franchisees will be left more and more to their own devices, and while some may see this as a good thing, it further exacerbates damage to the brand (and therefore, network value) as inconsistencies develop in the group. At its worst, this could lead to open revolt by franchisees, as happened with Angus & Robertson in 2011 when nearly half the franchisees sought to leave the group en masse while it was under administration.
Pursuit of outstanding royalties
Administrators have no capacity to offset debts owed by an insolvent franchisor to its franchisees, against the royalties owed by the franchisees. In other words, franchisees have to claim their debt owed by the franchisor like any other creditor, and end up with whatever cents in the dollar might be paid at some future point, but in the meantime must pay 100 per cent of all outstanding royalties to the administrators on demand without argument. If franchisors have allowed franchisees to fall behind in their royalty payments, administrators will ditch such arrangements and demand full payment immediately
Business Franchise Australia and New Zealand 33
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as they scrape together cash to keep the business afloat. Unfortunately, this can result in considerable financial pain to any franchisees who owe royalties, and whose business may also be struggling (the reason why they fell behind in their royalties in the first place).
Disclaiming of leases or other agreements
When Kleins was placed into voluntary administration in 2008, it was subsequently revealed that the franchisor held the leases on all the stores in the network, including the franchised outlets. Franchisees would then sub-lease the stores from the franchisor, to whom they would pay rent, and then the franchisor in turn would pay rent to the landlord (many of which were major shopping centres). However under this arrangement, the rents paid by the franchisees to Kleins were not being passed to the landlords, and the store rents fell behind. When the administrators took control of the business, they exercised their unique power to disclaim (ie. terminate) the leases, to reduce their ongoing liabilities in operating the business. The unfortunate byproduct of this action was that the franchisees in terminated outlets were suddenly left with two choices: close the shop and wear the losses caused by the premature ending of their business, or negotiate new leases directly with the landlords and attempt to continue trading. Many chose to negotiate new leases with the landlords, but found this to be a doublewhammy. In some cases their rent increased because they were now independent operators, and no longer part of a national chain. In all cases, the franchisee would have had to find the cash to lodge the usual rental guarantee (up to three months rent in advance), plus invest in new signage and fitouts, etc, to trade as independents, while at the same time writing-off as unrecoverable large sums of money owed to them by the franchisor under Kleins’ unique income guarantee. Administrators can and will disclaim leases and other commercial agreements if they feel it is in the best interests of the insolvent entity, even if it is not in the best interests of the franchisees. However the reverse does not apply to franchisees, who usually have no rights to
“Franchisees of insolvent chains often learn more from the media about the future of their livelihoods than they do from the administrators.” terminate their franchise agreements even if their franchisor is in administration.
Loss of business value
It goes without saying that any franchisee who might have been planning to sell their business before their franchisor goes into administration will subsequently find it almost impossible to complete a sale until the system recovers from this emergency. Such a recovery, if one is possible at all, could take years. Even if their system does recover, a franchisee’s business in future may be worth less than it would have been prior to the administration. This loss of business value can cause major problems for franchisees who are heavily geared and may ultimately sell at a loss, or who planned to fund their retirement using the proceeds from the sale of their business, which may now be insufficient. Unless franchisees themselves are creditors (which is rare), this loss of franchisee business value, or the imperative to maintain franchisee business value, is incidental to administrators whose sole focus is to maximise the returns to creditors.
Significant ongoing personal liabilities
If a franchisor collapses, franchisees may be left without a business to trade if their supply of unique products ceases to exist. Because Kleenmaid stores sold only Kleenmaid products, when these were no longer available following the collapse of the franchisor, the stores could not switch suppliers and continue to trade. If this occurs, franchisees may have no choice but to close their stores, while continuing to pay the significant ongoing costs of shop leases, business loan repayments, and chattel mortgages for shop fit outs, fixtures and fittings. These ongoing liabilities can be a blight that weighs down a franchisee long after the collapse of their franchisor.
Radicalisation of corporate culture
If a buyer is found for an insolvent franchisor, the new owner will inevitably want to put their own stamp on the business and make changes to ensure its ongoing survival. The nature of the buyer, and the changes they will seek to implement, might clash with franchisees and appear at odds with the corporate culture under the former owners. For many franchisees, a change of ownership will require them to adapt to new management, and new ways of doing things. These changes can be relatively minor, incremental and easily adaptable, or can be major, radical and disruptive to the organisational culture and brand values.
Conclusion This is not an exhaustive list, but should give pause for thought to any existing franchisee concerned about the future of their network, any potential franchisee who needs to assess the risks of what might happen in a worst-case scenario, and any insolvency practitioner who might one day find themselves managing a franchise network in administration. Most importantly, this list should also serve as a reminder to franchisors that an inability to adapt to a changing market and poor management has consequences for those around them, especially their franchisees. Jason Gehrke is the director of the Franchise Advisory Centre and has been involved in franchising for 20 years at franchisee, franchisor and advisor level. He advises both potential and existing franchisors and franchisees, and conducts franchise education programs throughout Australia, and publishes Franchise News & Events, a fortnightly email news bulletin on franchising issues and trends. Contact Jason at: P: 07 3716 0400 E: email@example.com W: www.franchiseadvice.com.au
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Business Franchise Australia and New Zealand 35 FROG RENT_Franchise Business_A4 Advert.indd 1
3/02/15 8:51 AM
profile : sh er pa k i ds
reach higher given along the way, which was appreciated and I was advised who I needed to speak to and what I needed to do, including my due diligence.”
Working as a teacher within a New South Wales primary school, Mick Rasmussen recognised that the school and local parish required a before and after school care programme. After investigating what was required to start one, Mick initially gave up, put off by the magnitude of the work required to start one independently but six months later, and after completing more research on the subject, he came across Sherpa Kids Australia and hasn’t looked back since. Mick says, “Working on the computer one evening, I decided to do some more research, as our school really needed this facility and I came across Sherpa Kids. Deciding to look into it further I sent an email to Vicki Prout, and heard back from her very quickly. “From my initial contact, the process was very professional. If I had any questions or was unsure about anything, Vicki had an answer straight away or could get one for me. As the whole concept of franchising was new to me, there was a lot of assistance
Purchasing his first Sherpa Kids Australia franchise in July 2013, Mick, earlier this year, opened his second program (school). With a manager running his first program, he is able to concentrate on developing his new program, which came into fruition after being approached by another schools’ Principal. “My role now is to ensure that the relationship between the program and school is maintained and my managers’ role focuses on the relationship between the program and families. This frees me up to meet with more schools to build up my franchise network.” With a target to open one or two programs each year, Mick relies on the support from his Area Manager and Head Office to help him, not just financial and operational but also from a compliance perspective. “With the amount of legislation and compliance that is in place to open and operate a before and after school care program, Sherpa Kids brand is a huge help which makes the process very smooth,” says Mick.
A ground floor opportunity Sherpa Kids is a fast growing company, now in 17 countries, in a fast paced and extremely important industry. Sherpa Kids is seeking entrepreneurs that can challenge themselves, manage and have
36 Business Franchise Australia and New Zealand
the desire to manage several programs whilst engage closely with the local community. If you love the business and you agree to do your best to follow the tried and tested rules for running a management OSHC business, they:
• grant you the right to run a copy of the business; • show you what you need to do; • give you the tools to do the job; • support you in your efforts to do it. In return franchisees pay a fair price for the brand, goodwill, extensive training and operational support and should aim for a healthy return on their investment from as little as $35,000 plus GST for a greenfield territory. (Existing sites available) If this sounds like the perfect franchise opportunity for you, contact Vicki Prout now on: P: +61 439803078 or +08 83544886 E: firstname.lastname@example.org W: www.sherpa-kids.com.au
Sherpa Kids believes in making it easier weâ€™re building it... want to join us?
Sherpa Kids Entry Levels
State or Country Master
Visit sherpa-kids.com.au to find out more
About Sherpa Kids
A Management Franchise operating in the childcare industry is seeking partners at all levels of entry. As an international company we are operating in over 150 schools supported by over 100 franchisees servicing over 5400 primary school aged children every day. Sherpa Kids is an out of school hours care business. Income streams can include aftercare, holiday care and before school care. The services are managed by franchisees who employ staff to directly operate on school properties. Services are staffed by qualified personnel who meet as a minimum standards as prescribed by the brand as well as national regulatory authorities. Each franchisee has potential to operate multiple, closely located schools.
Your Investment for as little as $35,000 plus GST (new franchise)*
Enquire today phone Vicki Prout +61 439803078 or +08 83544886 email@example.com | www.sherpa-kids.com.au
Business Franchise Australia and New Zealand 37
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A rigorous approach to
‘Business Rigour’. It’s a strange sounding phrase but it’s vitally important in business. It’s about the discipline of ensuring your business stays on track. We’ve found that many businesses lack this discipline and that’s why they get into trouble. So, it’s a good idea to know what the fundamentals are and apply them.
“Many business owners are flat out with day-to-day issues. But they have no structure for actually running the business!” Many franchisors assume their franchisees know how to manage the business and
financial side of their franchise. But we have found this is mostly not the case. As one client said, “I’m good technically at what I do, but I don’t have any experience running a business.” While franchises typically provide operational and marketing support, it’s often a bit light on the business side. The reality is most people simply don’t know how to run the management side of business. It’s not their fault. You see, when people work for somebody else, business management happens around them; there are a whole range of people who look after things like finance, HR, planning and health and safety. But when you run a franchise, it’s up to you to look after all these things, and more..! There are two fundamental disciplines of business rigour which every business owner
38 Business Franchise Australia and New Zealand
should apply. These are monthly business meetings and a regular review of financial performance. Here are some suggestions for these two areas.
The Monthly Business Meeting The monthly business meeting is the foundation for a well-run business. The key to a good one is to have structure and format.
“One of the fundamentals that helps a business go well is the discipline of a monthly business meeting.” There are some essential components that can really help give structure to business meetings. These include: • Routine. It’s important to hold your business meetings on a regular basis. Monthly works best.
“The monthly business meeting is the foundation for a well-run business. The key to a good one is to have structure and format.” Peter Knight and Kate Groom Smart Franchise
• Agenda. Have a standing agenda to provide structure and certainty as to the matters that will be covered. • Financial review. Review the current performance of the business. • Operations review. Discuss operational issues that have arisen in the last month. • Marketing activities. Outline marketing activities coming up in the next month and how to make the most of them. • Action plan. Identify actions from each agenda item and decide on follow up.
“For a business meeting, an agenda is crucial. So too is making a summary of the action points before a meeting ends. Without those things it’s a chat, not a meeting.”
The essential components of monthly business meetings are always applicable. However, you may need to adapt them for your business. For instance, for a new business there should be more focus on sales and building a strong customer base. For an established business the focus turns to maintaining sales and building profitability.
How to review financial performance Regular review of financial performance is fundamental to good business management. The first step in reviewing financial performance is to have an up to date Profit & Loss Statement. This should be for the month just finished, and also show the results for the year to date. Once you have this information there are several important numbers to look at.
These include sales, gross profit, operating expenses, and net profit. Compare these against your targets. Check whether you’re on track. If not, work out what you will do to get back on track. Note these actions on your Action Plan. Also check your bank balance at the end of the month, calculate the amount you owe suppliers and review any amounts outstanding to be collected. These inquiries will prompt actions to address any cash flow issues that might be looming. Peter Knight and Kate Groom are cofounders of Smart Franchise and The Franchise Accountants Network. They help people learn how to manage the business and financial side of running a franchise. www.smartfranchise.com.au www.franchiseaccountants.net.au
Business Franchise Australia and New Zealand 39
sn a pshot: spr ay pav e aust r a l i a
Three guarantees and a boat trip Offering three guarantees and a boat trip might sound unusual for a new business opportunity. However after almost 25 years in business, the owners of Spray Pave Australia Pty Ltd know that it takes something unusual yet simple to succeed in business. Owner Mr Chris Bylhouwer, started Spray Pave Australia in the late 1980’s, and has always improved his offerings in many ways. The current complete package includes a pay as you go option, plus three guarantees and a boat trip! The business is working with existing concrete. As Mr Bylhouwer explains, “We can do anything with existing concrete from basic repairs to complete decorations with non-slip patterns using new toppings, epoxies, stains, polishing, seamless flooring, waterproofing even transforming it into imitation slate or timber floorboards. “The transformations are unbelievable and the demand for this service is everywhere, from homes to shopping centres, retail shops to factories, warehouses, schools, churches and airports.” The business opportunity is more than just application training, it also includes many systems for receiving jobs, quoting high prices, managing and growing the business including legal issues.
“In essence we provide a complete turnkey business package for just $49,000, including equipment then we back it all up with the ultimate security – pay as you go finance is available plus three guarantees and a boat trip,” The new Licensee system includes some unique ideas; three days at the Adelaide training centre plus two days back with the operator on their own customer job, local marketing campaign, insurance package, own web site page, customers interest free finance etc. A complete list is in the information pack. Designed to remove all risk is the three guarantees.
A minimum of 20 customer leads sent via SMS and email. More leads are forwarded free for life.
Guaranteed work option, available any time after training. If new operators don’t earn over $100,000 gross in their first year by following the systems, they can claim the 100 per cent Money Back Guarantee.
This he says offers complete security when starting a new business. “All they have to do is buy the business, do the work and start loving life.” Mr Bylhouwer sums up the three guarantees, the pay as you go system and boat trip. “Operators want:
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1. Customer leads? Yes, we advertise and forward them free.
2. Guaranteed work? Yes, they can pay an extra fee and we forward them signed customer contracts. 3. Money back guarantee if it doesn’t work? Yes, we trust our training, support and systems so if they don’t gross over 100k in the first year, they can have all their money back. “I like to stand out from the rest and put my money where my mouth is! Even to include that they can pay for their new business as they go. We only charge a small deposit (sometimes negotiable with conditions), the rest they can pay over time. “As for the boat trip, because new operators spend most of their time in Adelaide at training, if they can stay an extra half day or more, we can take them out on our impressive power cruiser or even a luxury cruising sailing catamaran for bigger groups or families. Business before pleasure makes a possible tax deductable mini holiday. It’s all about enjoying the social and business relationship with new friends; fishing, relaxing or just enjoying the start of a fantastic new, long term journey together.” Contact Spray Pave on: Phone: 1800 688 888 Email: firstname.lastname@example.org Web: www.spraypave.com
R • • •
• • •
Business Franchise Australia and New Zealand 41
Success within the Service Sector Our feature in this issue of Business Franchise Australia and New Zealand is ‘Success within the Service Sector’. According to the 2014 Australian Industry Report, the inaugural report from the Department of Industry’s Office of the Chief Economist, the 2013-14 financial year marked the 23rd consecutive year of economic growth. The Australian economy
is transitioning to a knowledge-based economy, which implies a smaller role for primary (farming, mining and fishing) and secondary sectors (manufacturing) and an even greater role for Services in the economy. Like other developed countries, the majority of Australia’s economic activity today occurs in Services industries. These industries account for more than two thirds of GDP and about ten million jobs and included within these figures are the service franchise systems and providers, all of whom provide a service to other businesses
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and individuals within a wide range of categories. The categories can include service providers such as legal advice, point of sale, insurance requirements, property fit-outs, courier and printing services, alongside franchise services including air conditioning servicing and cleaning. One thing they all have in common and in their favour is the need within the wider community to outsource these particular functions. There are many reasons for this outsourcing and can include such things as businesses
FE ATURE The Cambridge Dictionary defines the â€˜Service Sectorâ€™ as
that may not be able to keep fully up to date with the current trends and technology or may be small and seek assistance from experts within a particular field to provide that service to them or even that by outsourcing particular services, it will allow the company to fully focus on growing their customer base and increase sales. For individuals and home owners, who are busier today than ever before, with less time for maintenance and small projects around the home, it is easier for people to contract out the jobs to capable businesses than spend the time and money trying to do
the part of a countryâ€™s economy that is made up of businesses that provide services. it themselves. This has resulted in a growth
market for small business owners, including
Clean Green Strata HydroKleen Thexton Armstrong Yellow Express
Whatever the reason for this outsourcing,
franchisees, to step in and complete
these tasks once done by homeowners
you are in the enviable position to not only enjoy great success with your franchise but also assist in the success of another business.
National Franchise Insurance Brokers Shape Shopfitters Shift8 ShopInsurance.com.au
Business Franchise Australia and New Zealand 43
CLE A N G REEN STR ATA
JOIN THE STRATA PROPERTY SPECIALISTS With a determination to become the number one strata maintenance company in Australia and more than 20 years’ experience of managing, cleaning, gardening and maintaining strata properties, now is the perfect time to join Clean Green Strata in their East Coast expansion. Offering a selection of different franchise models to choose from, Clean Green Strata appeals to a broad spectrum of franchisees. Managing Director, Chris Earthrowl says, “Our franchisees come from very different backgrounds, including brothers, husband and wife teams as well as individuals, all with the desire to work outdoors, to keep a Monday to Friday schedule and grow their business into a valuable asset. “Each franchisee possesses dedication, the drive to succeed, a strong work ethic and a passion for the brand and we are looking for the same qualities in our new franchisees to help us on our journey to become number one.”
Why Clean Green Strata? Clean Green Strata gives you three different turnkey franchise models, Strata Cleaning; Strata Gardening or a full service Cleaning and Gardening franchise. Strata Cleaning: Is the cleaning and maintenance of common areas including the internal and external areas car park areas and bin management. Strata Gardening: Is the maintenance of common area garden beds and lawn areas on a strata block. This includes hedging, trimming, pruning, fertilizing, weeding and mowing lawns.
“Each franchisee possesses dedication, the drive to succeed, a strong work ethic and a passion for the brand.” Full service Cleaning and Gardening: This is the preferred turnkey model because a franchisee can earn more by offering both cleaning and gardening services. As each property is different, a unique ‘block specification’ is created which highlights the cleaning and gardening tasks and frequencies you need to follow. With these easy to follow systems and procedures, your chosen business model is extremely simple. Chris explains that the support given to each franchisee helps to maintain the quality control and excellence across the network. “From the very first day, Head Office supports each franchisee with sales leads, marketing, news campaigns, uniforms, branding and SEO. Alongside this we also complete all invoicing as well as provide a credit control function, using a cloud based accounting package. “Training never stops. At the beginning, we accompany the franchisee in their territory completing on the road training and once they are up and running and feel comfortable, the Operations Manager will then complete regular on site reviews
44 Business Franchise Australia and New Zealand
to check their work and bring them up to speed with the ever changing industry techniques and products.” In addition to this administration support, each franchisee also receives a vehicle fitout, with the branded and customised vans and utes designed to ensure they are easy to use, complete with racking to ensure that each item is easily accessible while on-site. All franchisees are assigned their own strata companies with whom they work with closely; no strata property is too big or too small.
Becoming a franchisee While experience in cleaning or gardening is preferred, the right attitude and commitment to the Clean Green Strata service standard is the essential qualifying factor. So if you’re looking for a change and want to get out from behind your desk, Clean Green Strata is the franchise for you. For more information contact: P: 1300 66 11 82 E: email@example.com W: www.cleangreenstrata.com.au
HAVE YOU NOTICED HOW MANY BLOCKS OF UNITS THERE ARE? Ever wondered who looks after them and how you might be able to get a piece of the action?
LOOK NO FURTHER - CGS CLEANING AND GARDENING WHY CGS FRANCHISE? s .O PREVIOUS EXPERIENCE REQUIRED s %STABLISHED BRAND IN THE STRATA INDUSTRY SINCE s .O AFTER HOURS WORK s .O WEEKEND WORK s 0ROFESSIONAL HEAD OFlCE SUPPORT s 6ERY PROlTABLE s (UGE GROWTH POTENTIAL
To learn how to get your piece of the action and get the perfect work life balance visit www.cleangreenstrata.com.au or 0410633536 or firstname.lastname@example.org
BusinessBusiness Franchise Franchise AustraliaAustralia and Newand Zealand New Zealand 45 45
E x per t Advice
Evolving service sector opens up
opportunity for big business
In my 35 years of experience within the franchise service sector, I have seen immense change in the way it operates. There has been a shift, especially in the past 10 years, that has seen the sector evolve into a multifaceted one utilising multiple sales channels and markets. No longer are franchisees restricted to a purely service based business model,
instead they are enjoying success through a combination of service, retail, commercial or e-commerce elements and it is paving the way for franchisees to build big businesses. In the case of Poolwerx, this has been a transition from our franchisees being one man and his van servicing local pools, to our franchisees starting with this, but having a clear career path to build their businesses into much larger operations. While the low entry cost that historically made the service sector popular is still available, there are also investment levels offered for potential franchisees seeking multi-million dollar enterprises.
46 Business Franchise Australia and New Zealand
A similar pattern of development can be seen in many service franchises, and I believe key developments in technology, communication and changes in demography are responsible for shaping many of the ways the service sector has advanced. Ultimately, the way consumers want to do business has transformed, which in turn has impacted what potential franchisees are seeking from business ownership now. Overall, the shift in the sector has been incredibly positive for the franchise industry with the service sector growing to account for around 27 per cent of the 1100 franchise businesses in Australia. While this means there is immense choice now,
fe feature at u r e “The way consumers want to do business has transformed, which in turn has impacted what potential franchisees are seeking from business ownership now.” John O’Brien | Founder & CEO Poolwerx Corporation
it can make the prospect of selecting the right one a real challenge. An examination of what has influenced the evolution of the sector can help a potential franchisee determine what a successful service business should offer today.
Technology Developments in information technology have affected the industry in many ways, but one of the major outcomes has been a broadening of accessibility to customers. The popularity of the internet, in particular growth of search engines like Google, has made it easier for consumers to find information about a brand but also for businesses to easily reach a wider market. E-commerce applications have been the natural extension of this growth in order to capture consumers at the initial source of their enquiry. Australia has led the way in cementing this as a necessary sales channel in business. In fact, studies have shown internet penetration in Australia was one of the highest in the Asia Pacific region, and we also had the third highest business to consumer e-commerce sales, with 80 per cent of internet users making purchases or orders online.* Franchises, like ours, have embraced the technology changes and implemented sales channels that allow for online bookings and sales. It has not taken away from our core service elements but rather complimented it, widening the market reach and income stream for franchisees. Technology has also improved the way businesses are managed and performance
measured. The ‘Cloud’ has enabled franchisees to remotely manage their businesses more easily. Having systems that give them real time performance indicators no matter where they are, and enabling them to make changes to their business instantly as market need dictates. Overall, successful service based companies have foreseen the progress technology can provide and applied it accordingly across internal and external systems.
Communication Communication and technology are closely interlinked and have progressed simultaneously, but the rise of social media and the introduction of the smart phone have had the greatest impact on the service sector. Customers now have the power to make a purchase decision at any time, and with more than two-thirds of the population owning a smart device and spending 41 per cent of that time online, a franchise must be taking advantage of this with the right website, sales channels and communication strategy. Social media has become a norm in the communication mix and has undoubtedly increased the power of referral marketing, with research showing the most trusted source of brand information for consumers is online peer review. Social media allows an appraisal, good or bad, to be shared almost immediately with hundreds of people meaning a business in today’s service sector cannot afford to drop its performance. If they do they must be ready
“Overall, successful service based companies have foreseen the progress technology can provide and applied it accordingly across internal and external systems. ”
to combat it immediately. It is an effective communication tool that must be utilised to its full potential, particularly as it shows a business’ awareness of its changing target market.
Demography Society is ever changing, but the increased cost of living and growth in housing affordability that we have seen in the last 10 years has shaped the priorities of customers and thus potential franchisees. People are working longer and income expectations are higher, leading people to want more from a business opportunity. As a result the service sector, which was once primarily known for its low entry and respective returns, has had to seek ways to increase income opportunity, thus the hybrid model of retail/service has become popular. Poolwerx, for example, has progressed from its roots of a manin-a-van to over 50 per cent of the group being hybrid, encompassing retail, online, residential and commercial servicing elements. The service industry has always been challenging, exciting and rewarding. The developments that have taken place throughout my career have only made it more so. It has responded to the needs of the market from both a consumer and franchisee perspective. Successful service businesses have adapted accordingly to the technology, communication and demographic changes, and are offering multiple income streams, sophisticated management systems and clear marketing and communication strategies. I am under no illusion that in another 35 years’ time the service sector will have changed again, but it will undoubtedly continue to develop and be a successful choice for franchisees to make a solid living.
Business Franchise Australia and New Zealand 47
E x per t Advice
“The rise of social media and the introduction of the smart phone have had the greatest impact on the service sector.”
chaired the Australian, the Asia Pacific and the World Franchise Councils, all
The following questions will help determine if the service franchise you are considering has joined the shift to big business: • What web presence does the franchise have? Does it represent the brand well? • How does it utilise the internet to capture customers online? • Does it offer any online sales opportunities? • Is the management system a comprehensive program that is accessible easily and remotely?
• Is the website mobile compatible? • What is the social media policy of the company? • What sales training is offered? • What is the current average tenure of a customer? • What are the key performance indicators for a successful franchisee? • What are the avenues for income in the business?
whilst building a brand that has twice been named Australia’s Franchisor of the Year. Today, the Poolwerx group provides poolside services to an estimated 300,000 domestic pools, has a nationwide chain of retail stores and is the strongest player in the commercial pool maintenance sector in Australia. Its unique approach to franchising
• What are the average terms for a return on investment for the franchise?
gives each and every franchise owner a
• How will the business help me achieve my lifestyle and financial goals?
van, multi-store, multi-million dollar
• How does it utilise technology to market to customers? E.g. email marketing, SMS marketing,
John O’Brien is the founder and CEO of Poolwerx Corporation, the world’s leading swimming pool service company and largest franchised pool retail group.
growth maintained at over 10 per cent
• How do they use social media at a national and local level? E.g. Facebook, twitter
As an industry leader, John has advised the Australian Government on a variety of issues facing franchising and has also
• Does it have a suitable customer relationship management system?
48 Business Franchise Australia and New Zealand
career path from which to build a multi enterprise, a strategy that has seen sales every year for the past 10, right through the GFC and beyond. *yStats.com e-commerce report
Building Retail Experiences
Shape ShopďŹ tters understand the customer experience and work with you to bring your brandâ€™s vision to life on the shop ďŹ‚oor. We build inspired customer experiences through our customised offering, in-house joinery and our highly technical expertise, particularly in the food space. Shape ShopďŹ tters work across every state and territory of Australia. For more information call our Head Office on (03) 9432 1044 or go to our website for more examples of what we do at www.shapeshopďŹ tters.com.au
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Shape Shopf it ters
The power of local
manufacturing franchisors, “What can we do to reduce the cost of the fitout?” This is an obvious question for a franchisor to ask their fitout partner, but not often an easy one to answer. There are many things that need to be considered with every component that goes into the fitout, but the top three would be Quality, Price and Procurement.
For many franchisees the cost of the actual fitout will be the deciding factor of the economic viability of the franchise system and whether or not they are able to finance the startup costs. Over the years I have been asked many times the same question by different
From fittings, fixtures, equipment to finishes, everything needs to be the right quality to uphold both the design integrity and the franchisors’ brand image to deliver the customer experience over the time of the lease. This doesn’t necessarily mean it has to be the best quality money can buy, but it has to be the right quality for its chosen purpose.
Price There’s truth in the saying, “Look after the pennies and the pounds will look after themselves.” If the individual components that go into making up the fitout are overpriced or over specified then it’s no surprise what the final fitout cost will look like against the budget. At Shape we do a lot of work identifying areas of potential reductions in component prices and making our clients aware of the options, working together to maintain the intent but minimise the cost. Price point is always going to go hand in hand with Quality, which is why I would always put the right quality ahead of a cheaper option; otherwise it’s just a false economy.
Whatever the selected item is, it needs to be available in the required time frame, the right quantity and in many cases to be available over time for future stores. It is difficult to manage specified items with long lead times from overseas suppliers in a 6-8 week fitout program. Shipping
50 Business Franchise Australia and New Zealand
delays etc. create unnecessary uncertainty for all involved and added pressure on an impending opening date. All these things need to be considered for each individual component. It’s not always the case that taking the cheaper imported option is the best option. When we start to look at the joinery and furniture components that go into an individual fitout and in many cases, the significant cost they carry to the bottom line it is often tempting to look at a cheaper imported product. While this is done successfully for some products, it’s not often the case for retail food tenancies or in particular Quick Service Restaurants. Why? There is a high priority to keep the operational needs of the system to its proven formula. Ovens, fryers, grills, refrigeration and washing facilities are required to be positioned to allow for a practical workflow. What’s left of the tenancy is the opportunity to create the customer experience. As most tenancies will differ in size and shape this is where the joinery and furniture items will need to bend and mould to fit both the space and the design intent. If we look at the three criteria previously mentioned you will start to see some grey areas over the viability of procuring and importing a product manufactured offshore at a cheaper price. The drop in quality of the finished product is reflected in the price point, which is the only positive I have found in my personal experience with this. Procurement can be a nightmare with a lack of control of the production run as well as shipping hold ups and problems through customs. Once that’s been negotiated there is the risk of damage during transport and then the added concern of manufacturing errors. If that’s the case then its modifications to a brand new unit, more than likely at the closing stages of the fitout. That said, there starts to become some
fe feature at u r e “The local economy is supported by people supporting local manufacturing.” real advantages with choosing a locally manufactured product and partnering with a fitout company that has a quality and competent manufacturing capability. Quality is definitely going to be far superior. Price may be a little higher but given the risks of the cheaper option the value is by far better and procurement is a one sided argument. There are also a number of other advantages to using locally manufactured joinery and furniture. The use of recycled materials including bricks and timbers has been very popular in recent times and while creating some great ambience and character to many fitouts, it also has a significant positive impact on our environment. What used to go into landfill at a rapid rate is now being picked apart, salvaged and reused and often the recycled product is far better quality than what is currently available. The local economy is supported by people supporting local manufacturing. Manufacturing in Australia peaked in the 1960’s at 25 per cent. Today this sits below 7 per cent and with big companies like Holden packing it in, the situation looks like getting worse. It’s now more important than ever to support local manufacturing and Australian made products. Research and development is a key area. At Shape we spend a lot of time working with our partners developing exactly what it is they require from particular joinery or furniture items. This can be anything from the look and feel of the material being used to the practicality or functionality of a specific item. Small samples are always easier to look at, re-work and approve before investing in a custom designed piece therefore avoiding a potential costly mistake. This service can only be provided by a local manufacturer particularly given the tight time frames that this is normally undertaken in. In my opinion there is a definite advantage of maintaining a high level of manufacturing capability locally at Shape. It provides a far better service to my clients allowing me deliver the highest quality product in the shortest time. It allows me to continue to develop products to suit their
needs and it gives me 100 per cent control over production and delivery. To me, that’s the power of local manufacturing. Wayne Billings is the founder and Director of Shape Shopfitters P/L and has spent the past 17 years developing Shape’s local manufacturing capabilities. He is focussed on partnering with retail food franchisors and producing outstanding results while delivering exceptional service.
Shape are one of Australia’s largest retail food shopfitters and excel at producing iconic tenancies. Shape have completed hundreds of fitouts and continue to work with many major retail food brands Australia wide. For more information contact: P: 03 9432 1044 W: www.shapeshopfitters.com,au
Business Franchise Australia and New Zealand 51
T h e x to n A r mst ro ng
A GOLDEN OPPORTUNITY Time for a New Career as a BUSINESS SUCCESS PARTNER
Business consulting is big business. It is also smart business. Thexton Armstrong realises this and has developed a unique and incredibly effective program to help you utilise your professional experience to create your own business and assist other business owners to achieve their maximum potential. The Thexton Armstrong Business Success Program is designed to enable a Thexton Armstrong franchisee to offer very high end consulting services to small and medium sized businesses. Franchisees work with the owners and managers of a business (the franchisees clients) to help make their business stronger, more profitable and more valuable. The programme provides the framework for the franchisee to go into their clients business and do a complete analysis and overhaul. One of the many benefits of being a Thexton Armstrong consultant is the fact that the programme is not a ‘quick fix’ for clients. It is a comprehensive system which allows you to build a long-term relationship
“Franchisees come from a wide and varied background. Most have spent around 20 years in corporate life and/or have owned their own business.” with your clients, across ALL areas of their business. Developing these strong relationships allows you to gain and retain clients. This produces better results for your clients and for you! Franchisees come from a wide and varied background. Most have spent around 20 years in corporate life and/or have owned their own business. These individuals now want to take their experiences and pass on this knowledge and advice to other up and coming businesses. Thexton Armstrong harnesses this vast amount of knowledge from their franchisees and teaches them how to put this information into a successful, structured programme which they can then take to potential clients. They provide comprehensive training to all franchisees to help equip them with the skills, tools and resources to approach potential clients and show them the enormous benefits of working with a professional business consultant. Clients initially sign on with a Thexton Armstrong franchisee because the franchisee can clearly demonstrate the financial advantages of having the
52 Business Franchise Australia and New Zealand
franchisee as their ‘business partner’. Businesses often see an increase in profits from four to ten times the consultancy fee paid. That is strong motivation for any company to jump on board. There is also room for growth, once the franchisee has become successful in their own right, they then have the opportunity to build their own consulting firm, employing multiple consultants under one roof. There is also the opportunity to join an existing firm if you would prefer to be a part of a team environment. Within Thexton Armstrong there may also be the option to work in one of their already established firms. The cost to entry may suit your budget better than the Master Franchise Model and gives you the added mentoring and experience of the Firm Owner. If you are interested in becoming part of the success of Thexton Armstrong you will find more information on their website or email them directly at: E: email@example.com W: www.thextonarmstrong.com.au/ presentation
MASTER FRANCHISEE OPPORTUNITY
FRANCHISEE/ CONSULTANT OPPORTUNITY
There limited New There are are Limited opportunities for Zealand Opportunities motivated and passionate for motivated and professionals to join our passionate professionals international consulting to join our international network. consulting network.
There limited New There are are limited opportunities for Zealand opportunities motivated and passionate for motivated and professionals to become a passionate professionals Franchisee/Consultant in one to become a Franchisee/ of our consulting firms. Consultant in one of our
Are Are you you tired tired of ofthe thecorporate corporategrind? grind?
Are you currently Are you currently working workinginincorporate corporateand and are looking for become a a are looking foran anopportunity opportunitytoto become business business consultant? consultant?
Do profession and learn a Doyou youwant wanttotochange change profession and learn new setset offoff skills as aasbusiness consultant? a new skills a business consultant?
Doyou youwant wantthe theopportunity opportunity build Do to to build a a consultingfirm firmininyour yourlocal localarea? area? consulting
New Zealand consulting firms.
Doyou youhave havegood goodrelationship relationship building skills Do building skills and enjoy enjoyworking workingwith withbusiness business owners? and owners? Have you owned your own business and
Doyou youhave havemanagement management skills and can Do skills and can demonstrateaasuccessful successfulwork workhistory? history? demonstrate
Have you owned your own business and appreciate the plight of the small business appreciate the plight of the small business owner? owner?
Do you want to be a part of the fastest growing Do you want to be a part of the fastest growing business consulting brand in Australasia? business consulting brand in Australasia?
WE ARE PASSIONATE ABOUT BUSINESS TERRITORIES TERRITORIES
& HELPING BUSINESS OWNERS! We have opportunities in Auckland,
We have opportunities in Northland, Waikato, Bay of Plenty, Gisborne, Manawatu, Wellington, West Coast South Island, Queenstown and Timaru.
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BECOME A THEXTON ARMSTRONG Christchurch. BUSINESS SUCCESS PARTNER AND JOIN OUR growing network
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Log on todetails our website or Email Now For further contact David Thexton for a09-965-3861 Free Information Pack firstname.lastname@example.org Email: email@example.com www.thextonarmstrong.co.nz
Sh o pInsu r ance.co m. au
SAVE MONEY IN JUST 60 SECONDS As part of Steadfast Eastern Insurance brokers, ShopInsurance.com.au is part of the largest network of general insurance brokers in Australia and a leading network in New Zealand. Established in 1996, Steadfast’s network comprises of 285 insurance brokerages, represented by over 455 offices across the metro and regional areas of Australia and New Zealand and generates in excess of $4.3 billion in insurance sales. This provides Steadfast with enormous buying power, flexibility and influence when negotiating with insurers and this strength and size gives ShopInsurance.com.au the ability to offer you a broad choice of insurance products, exclusively built policies and all at highly competitive prices.
Competitive rates Nine years ago, Fred Nadde recognised a growing market for this type of insurance and saw an opportunity to use his expertise as both a broker and insurance representative to provide a broad range of insurances at ultra-competitive prices. Recognising that a lot of people are underinsured, which usually only becomes apparent when trying to make a claim, ShopInsurance.com.au is different. When going online to obtain a fast 60 second business insurance quote, several types of insurance are pre-populated at the minimum level to ensure that retail franchisors and franchisees are covered for the most common types of claim. These include burglary, money, glass, tax audit, fidelity guarantee, machinery breakdown, food spoilage and liability. Whether you’re a small business retailer, a franchisee or a franchisor looking to provide a master policy to protect and meet the needs of your franchisees,
“Dealing with Australian insurers with a national presence only, ShopInsurance.com.au are with you every step of the way.”
ShopInsurance.com.au has you covered. With 85+ occupations covered, the premiums are competitive on pricing and with an 85 per cent conversion rate from quote to policy, the clients are in agreement.
Range of services ShopInsurance.com.au offers a range of tailored services as different franchisors have different requirements. Some franchisors wish to be heavily involved with the insurance and risk management programme for their franchisee network, and ShopInsurance.com.au can manage this by offering tailor made insurance programmes, specific login portals and codes whilst others wish to take a less proactive approach and want to just ensure each franchisee has current insurance in place, which can be done within five minutes and the cover is instantaneous. Working with franchisees including Lenard’s Poultry, Just Cuts, Wendy’s Ice Cream, Michel’s Patisserie, Boost Juice, Gloria Jean’s Coffee, TeleChoice
54 Business Franchise Australia and New Zealand
and Subway amongst many others, ShopInsurance.com.au have been able to adapt their policies and offer tailor made programmes. These also include short term policies for casual leasing, which means that premiums do not have to be taken for a minimum of 12 months. This assists retailers within shopping centres who may want to diversify or trial pop up outlets, with a certificate of currency available to the centre manager within five minutes. Dealing with Australian insurers with a national presence only, ShopInsurance.com. au are with you every step of the way. So, whether you’re a café owner, clothing retailer, hairdresser or one of the other 85+ occupations covered, go to ShopInsurance. com.au and in just 60 seconds, see for yourself how much money you can save on your insurance policy. For more information: P: 1300 123 300 E: firstname.lastname@example.org W: www.shopinsurance.com.au
Business Franchise Australia and New Zealand 55
E x per t Advice
Business to Business Franchises
A Strong Growth Sector When most of us think of franchising we think fried chicken, hamburgers and fast food; retail such as clothes, books, homewares, and other concepts that service our daily needs.
In 2014, the fastest growing franchises were in the health and beauty sector and the Franchisor of the Year was in food service - not surprising given about half of all franchises are in the food service sector. With the prevalence of retail and other business to consumer (B2C) businesses in shopping malls and strip precincts and advertised on radio, television and social media, you could be forgiven for thinking that B2C businesses are the only type of franchises available.
56 Business Franchise Australia and New Zealand
However, Australia has over 2 million businesses and its market is just 1.2 per cent of the global economy. There are 25 million businesses in India alone and probably over 100 million businesses across the international market. So the potential for franchise networks that service the business market is huge. And this potential is being exploited not just here in Australia, but across the globe. With a growing number of businesses outsourcing their non-core activities to
fe feature at u r e “Unless the franchisor is providing all the new clients, B2B franchisees need to be self-motivated, sales-oriented and prepared to go out into the business world and promote their goods or services.” Rod Young | Chairman DC Strategy Group
limit the number of employees under their direct control and to tap expertise only when it is needed, B2B businesses are growing strongly in the service, distribution and supply areas. B2B service providers cover a huge range of services from software and bookkeeping to office cleaning and ink and toner cartridge supply. The franchises that are emerging to service the business market are growing rapidly in Australia and around the world. B2B businesses include Pack & Send, Cartridge World, Clean Green Strata, Hardware2You, Jani King, Total Tools, Xpresso Delight, Fastway Couriers, and Leadership Management Australia (LMA), Mail Plus and IT businesses like Gizmo and Sacko IT. These are only some of the many B2B businesses that service the small and medium enterprises (SME’s) and in some cases large corporations as well.
Less business hours and a more diverse client base As they serve the business market, B2B franchises often operate normal 9 to 5 business office hours and usually just five days per week. This makes them more family-friendly than 7 day food or retail shopping centre-based businesses. It also makes B2B franchises attractive to prospective franchisees who want to balance the opportunity to build a business with time for the family. One of the other features of many B2B businesses is that they are not limited by the location they operate from. They are often oriented toward outward bound, proactive sales activity to win new customers and increase sales revenue rather than just relying on a well–sited office location. Good B2B franchises have well developed sales tools to assist franchisees to identify and win new customers and use their
websites and in some cases eCommerce as a business development channel. As the location is not critical, some B2B franchises comprise smaller one owner/one operator franchisees who work from home. Overheads can be extremely low and the capital costs to buy in can often be less than $50,000. For example, bookkeeping franchises like First Class Accounts, with over 150 franchisees across Australia, have franchisees who work with clients either remotely or at their clients’ premises. These franchisees do not need an office so most work from a home. This means that apart from minor travel, administrative, IT and stationery expenses, gross income does not need to be huge to ensure an excellent net income for the franchisee even after paying royalties. While some B2B franchises may have an unlimited scope with customers across many business disciplines, others service a specific segment of the market.
Specialisation can serve you well Clean Green Strata is a specialist cleaning and maintenance service franchise which focuses on servicing the common areas of flats, apartments and home units. While their end customers are the Body Corporate they are often referred by real estate property managers and other real estate service suppliers. They are highly specialised and concentrate on a niche within the larger commercial cleaning market. Their name and reputation are well recognised within the specific market where they operate, but to the average consumer and sometimes the property owners they are virtually invisible.
From B2C to B2B Some service-type B2B franchises also serve the B2C market and offer dual income opportunities.
One of the best B2B business opportunities today is Cartridge World which has been described by Entrepreneur Magazine as Number 1 in its class and in January 2015 was designated among the exclusive Top 100 franchises, joining the ranks of Subway, McDonalds, Supercuts and other global brands. What started as a consumer focussed retail ink-cartridge refilling business in Adelaide in the 1990’s has evolved into the world’s largest recycled ink and toner franchise with over 1500 stores in over 50 countries. Cartridge World’s business model was originally based in retail premises that served only a walk-in retail consumer base with the franchisee refilling the ink and toner cartridges in the back of the store largely for domestic users. Today its network of stores has evolved into a multi-national B2B sales organisation servicing thousands of businesses each month across every continent. The B2Bfocused franchisees seek out business customers who choose to save money by buying environmentally friendly recycled printer cartridges under the Cartridge World brand. These B2B customers can choose to visit the retail location, order online from the eCommerce site and have the order fulfilled by the store or have the franchisee deliver to the business in branded Cartridge World vans. While new franchise owners still enjoy the retail B2C walk-in business, they are trained in B2B sales and service techniques. Rather than spend their time in the back of the store in low value refilling activities, the group now offers its franchisees access to a growing global procurement program that allows them to access not only original cartridges but a wide range of compatible or factory refilled and remanufactured cartridges as finished goods to suit the printers of their business customers.
Business Franchise Australia and New Zealand 57
E x per t Advice
With the advent of new technology, the increase in buying power of the group and the growth in the SME market, the most successful franchisees now have hundreds of B2B customers who buy quality recycled and remanufactured printer cartridges month after month ensuring not only a predictable cash flow but a customer base that makes the franchise more saleable when a franchisee decides to transfer the franchise. The very best of these franchise owners are now offering to manage the printing needs of their customers and have extended their offer to office printer maintenance and advice.
Retail B2B Not all B2B franchises are low cost service businesses. An excellent example of a business that is focused on B2B customers is the trade tool retailer Total Tools, whose clients are tradesmen (and women) who make their living using tools. While Total Tools operate over 50 retail stores and have some DIY domestic consumers and owner-builders, the vast majority of their customers are independent businesses run by tradesmen.
“Going into business as a B2B franchisee is a serious undertaking and requires self-discipline, hard work and long hours to ensure the opportunity is fully maximised.” needed to establish each location. However the rewards can be substantial. Trading only a six day week, many stores have gross sales of over $5 million in turnover and profits exceeding $500,000 after an establishment period.
B2B franchises need a sales commitment Prospective franchisees should not be misled by B2B franchise opportunities which promote lifestyle first. They seldom, if ever, prove to be profitable ventures and can turn a dream of independence into a self-employed nightmare. Unless the franchisor is providing all the new clients, B2B franchisees need to be self-motivated, sales-oriented and prepared to go out into the business world and promote their goods or services. In some B2B franchises this may mean canvassing and cold-calling for new clients. Many B2B businesses are not fast start businesses but need to build their client numbers over time.
These customers need and want quality, robust, long lasting tools to help them earn their living delivering trade services to their clients.
If franchisees and their families are not prepared to make sacrifices during this establishment period then perhaps a B2B franchise is not a good choice.
This is a substantial market but requires big, high exposure, 1500 square metre locations, a large stock range and sales oriented product knowledge. A capital investment in excess of $1 million is
Many good B2B franchises are labour intensive and franchisees and their families need to understand that only a total commitment to the business and its customers will ensure success.
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Going into business as a B2B franchisee is a serious undertaking and requires selfdiscipline, hard work and long hours to ensure the opportunity is fully maximised. But for many, the financial rewards and satisfaction of winning and serving regular B2B customers can be rewarding. Rod Young, founder and Chairman of DC Strategy, is considered one of the world’s leading franchise consultants with over 30 years’ at the forefront of franchising, licensing, business development and franchise education in Australia, Europe, China, South East Asia, India and the United States. Director or Chairman on the Boards of many national and international franchise networks, Rod has developed the Franchise Knowledge Series and is a Program Director and keynote speaker at Franchise India and is on the Board of Governors of the ASEAN Franchise Association. DC Strategy is the region’s leading end-to-end franchise consulting, legal, recruitment and branding firm. Franchise programs developed by their highly experienced specialist teams have built over $1.7 billion in enterprise value for their clients in the last decade alone growing the networks and brands of many successful national franchises. P: 02 8220 8700 E: email@example.com W: www.dcstrategy.com
All inclusive vehicle packages No territories Full call center support
Hy dro K l een
a breath of fresh air As air conditioning servicing experts, HydroKleen specialise in one thing and they do it well. By HydroKleening and sanitising split systems, ceiling cassettes & ducted units the air is fresh and healthy, which reduces sickness, saves you money on your power bill and helps clients live a healthier life.
Rapid Growth John Sanders and 2014 FCA Franchise Woman of the Year Sharon Jurd established the company in 2009 after research found a need for speeding up the process of servicing and cleaning split system air conditioners. There was also no industry standard for the servicing and cleaning of air conditioners and with nearly every household and
business in Australia having one or more air conditioners of some sort, Sharon and John recognised the opportunity to develop HydroKleen into a successful franchise system. Experiencing rapid growth since franchising commenced five years ago things are not slowing down with over 100 international inquiries and new franchisees in NSW, QLD and Tasmania, taking the total Australia wide to 28. Initially the franchisees were from established air conditioning companies, however the evolution of the franchise model and systems now allows for a wider range of people to become involved. Sharon says, “While targeting existing air conditioning companies has been successful for us, we are now able to broaden our market as the business is an excellent opportunity for all types of people, from differing working backgrounds, who want to own their own successful franchise.”
“YOU are your own boss and YOU make the day to day business decisions for your future.”
The company is proactive in developing its own technologies and products, having recently developed the third generation of its ‘no mess, no splash’ cleaning device, This allows franchisees the ability to carry out a pressure wash without damaging property as well as using their own environmentally-friendly cleaning products and eradicating microbial contamination. As Australia’s first split system air conditioning cleaning service to use their trademarked cleaning technology, HydroKleen Australia has received accreditation from the National Asthma Council Australia’s Sensitive Choice Program and Greenbiz and is the only national franchise in the market, therefore the most recognisable brand doing what it does best.
Become a franchisee If you are looking for a change in direction and to have more choices about where you are heading, a HydroKleen franchise offers this. No limits are set for your working hours or the growth of your business. This allows you to control as much needed income as you may require. YOU are your own boss and YOU make the day to day business decisions for your future. You set your own appointment times and days to suit your lifestyle. With many franchisees now owning multiple franchises, and a number of different HydroKleen franchise models which allow good return on investment in different areas, you just have to have the time. So, if you’re looking for a change of direction or simply want to have more choice regarding your future, contact HydroKleen now on:
John Sanders and Sharon Jurd
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P: 07 5574 4908 E: firstname.lastname@example.org W: www.hydrokleen.com.au
ARE YOU THIS PERSON?
Our franchisees are backed by proven processes, customised equipment, effective national marketing and media support and a trademarked cleaning process developed through many years of research and development.
(and not your bosses)? t%PZPVXBOUUPCFBCMFUPDPOUSPMZPVSPXO income? t%PZPVIBWFFYDFMMFOUUJNFNBOBHFNFOUBOE want to organise your own work/life/time? t%PZPVVOEFSTUBOEUIBUBIJHIMFWFMPGDVTUPNFS service is the focus to any business?
HydroKleen franchisees buy into a franchise framework based on a recognised franchise brands, which ensures that theyâ€™re provided with professional support at each stage of operation.
Operationally, HydroKleen franchises are provided unique trademarked procedures and equipment and the proven capacity to service domestic and commercial clients. Several franchisees have won contracts to clean major hotels and industrial sites, high-volume ongoing clients that provide excellent stability and foundations for growth.
Contact us now for more information
HydroKleen Australia is a national company that provides, through a â€˜man-in-a-vanâ€™ model, a unique and innovative award-winning air conditioning cleaning service proven to: t&MJNJOBUFBSBOHFPGDPOUBNJOBOUT
Specialists in the Servicing & Cleaning of Air Conditioners Phone: (07) 5574 4908 | www.hydrokleen.com.au | email@example.com Business Franchise Australia and New Zealand 61
Sh i f t8
Choosing Point of Sale for the franchise industry
“The uniqueness of the franchise industry requires specialised knowledge. Shift8’s point of sale platform addresses the specific needs of franchisees and allows franchisors to provide targeted operational support where its needed most.” In 2012 Shift8 burst onto the point of sale market with the first targeted solution for the franchise industry. The technology was quickly adopted by some of Australia’s best loved brands, including Ali Baba, SumoSalad and New Zealand Natural, and since then has become the firm favourite among emerging franchise systems who see the value in starting out on the right foot. Nutrition Station is one such brand having expanded to 19 locations within 2 years. CEO James McGovern knows the importance of delivering innovative solutions to their growing franchise network. “We want our franchisees to have every advantage from the get go. The Shift8 solution enables us to provide advanced reporting, labour and stock management, customer loyalty and a host of great operational tools for a low monthly fee. It takes the management burden off our franchisees and enables them to focus on delivering a great product and providing fantastic service in stores.” With franchisors able to self-manage the system, franchisees are afforded more time to monitor their performance and track their position in the wider network. The back end system offers live reporting so managers don’t have to spend unnecessary time analysing data. Franchisees that have adopted Shift8’s comprehensive point of sale system are benefiting from live sales reporting, stock and labour control tools and are able to
analyse performance from a big picture perspective and make adjustments before problems arise. Ibrahim Bilen from SumoSalad Macquarie Centre says, “Sales comparison reports with the previous financial year are especially useful and gives me a good overall image of how the store is performing. The speed and convenience of everything means that I can focus on the business.” In today’s competitive environment franchisors acknowledge that a point of sale system with a fast and intuitive interface is a key requirement. Beyond this though, franchisors need to continually incorporate new technologies. On offer these days are powerful loyalty systems, beacon notifications, animated display panels, mobile ordering and other customer engagement applications, not to mention powerful and detailed reporting and analytical tools. Delivering these solutions in an affordable way is the challenge faced by franchisors. Shift8 has addressed this by offering a model that enables franchise systems to spread the cost of ownership across the network with a low monthly fee per store and terminal. The model features no setup costs and a low ongoing cost and has another interesting aspect: All current and future functionality is included, so business
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owners are not constantly dipping into their pockets for each new innovation, giving franchise systems access to a platform that is constantly improving. Shift8’s Marketing Director Yvette Anelli explains, “We’re an innovative company and we don’t want our clients investing in technology today that will be obsolete next year or even next month. We’ve built a solution that grows with each franchise unit and with the network as a whole. New software versions can be remotely updated by franchise systems to the entire network with the click of a button and without any interruption to trade.” Delving deeper into the company’s history reveals where this commitment to clients and the franchising industry is rooted. Shift8’s founding members developed the idea from their vast working experience within the industry for some of Australia’s most established and successful franchise systems. This insider knowledge has shaped product design and innovation, producing a tailored platform that is continually evolving. For more information contact: P: 02 9360 5761 E: firstname.lastname@example.org W: www.shift8.com
N at i o na l Fr anch ise Insu r ance B ro k ers
DEAL LOCAL, INSURE GLOBAL
Attracting more and more of Australia’s best known franchise businesses, National Franchise Insurance Brokers (NFIB) is an insurance force to be reckoned with.
Now represented in New Zealand by one of the largest broker networks in that country and following on from discussions with insurance brokers around the world, NFIB Executive Director Darryl Morris says, “NFIB continues to grow internationally, and we’re at contract stage with a number of other countries globally. This will be of great benefit for franchisors here in Australia, particularly those that have international operations.
“Four clicks of a computer mouse to get a franchised business covered is what we’ve always promised,” said Mr Morris. “And that’s precisely what we’ve delivered.”
“This means that the franchisor can deal locally if they wish but have international representation, all through the same insurance program and technology platform.” With insurance solutions designed to complement franchisor activities, NFIB can remove the headache of audit and compliance needs along with the documentation it entails, all of which means the franchisor does not have to apply the resources in-house.
For those of you not familiar with NFIB, they offer a web-based insurance platform that has been designed exclusively for all kinds of franchised businesses around Australia. What’s central to NFIB’s success is two-fold: inexpensive insurance premiums regardless of the franchised business being insured, and the ease at which a franchise business can insure their business.
What makes insuring with NFIB so easy is the fact that there are only four basic pieces of information required in order to arrange cover for a franchised business: 1. The replacement of plant, equipment or stock 2. The gross profit of the franchised business 3. The level of public liability required by the franchised business 4. Whether machinery breakdown is required by the franchised business Plus, there isn’t any paperwork or forms to complete and there are no signatures required. It really is quite a simple and ingenious process. “We spend a great deal of time and effort travelling around the country speaking
64 Business Franchise Australia and New Zealand
to both franchisees and franchisors and their feedback is extremely positive,” said Mr Morris. “Our online system allows the franchisor to make sure that all of their individual franchisee’s businesses have adequate insurance cover. From the franchisee’s perspective, our ability to ‘bulk buy’ insurance cover means their costs are significantly reduced when compared to what they may have paid for insurance in the past.” With a total commitment to understanding franchisor franchisee insurance expectations, Mr Morris says that he strongly believes that the future of the business lies in his group’s ability to provide the most competitive and comprehensive insurance costs available. “We all hate getting insurance premium renewals. That’s a fact of life. People want the most adequate cover for the lowest possible price – it’s as simple as that. What we’ve focused on from the beginning and what is still central to everything we do today is to make sure our customers save money on their business insurance,” Mr Morris said. For more information about National Franchise Insurance Brokers please contact Darryl Morris or Brad Dixon. P: 1800 776 747 E: info@MYNFIB.com.au W: www.MYNFIB.com.au
Business Franchise Australia and New Zealand 65
fr anch isi ng e x p o
Vibrant and informative
show coming to Sydney The Sydney Franchising & Business Opportunities Expo this month will be more vibrant and exciting than ever, with the return of the Malaysian Pavilion, plus a host of new exhibitors. Opening in Sydney 27-29 March 2015 at the Royal Hall of Industries Moore Park, the Sydney Franchising & Business Opportunities Expo is the first of three shows to be held in 2015. “This Expo and the ones to follow in Brisbane and Melbourne, are must-see events for advice, inspiration and information about the latest life-changing franchising opportunities,” says Exhibition Manager Fiona Stacey. Stacey adds that a highlight of the Sydney show will be the Malaysian Pavilion; showcasing a number of different companies seeking Australian franchisees. Located right at the entrance to the show, visitors may meet
“This really brings the Sydney show onto the world stage... I can’t think of a better endorsement for the Franchising Expo than the fact that international companies are eager to be involved.” representatives from industries including hairstyling, health food, greeting cards, wedding accessories and Malaysian cuisine. “This really brings the Sydney show onto the world stage,” she says. “I can’t think of a better endorsement for the Franchising Expo than the fact that international companies are eager to be involved.” Visitors keen on joining the hospitality industry will have a wide range of businesses to investigate, including The Coffee Emporium, Xpresso Café, La Porchetta, Zambreros, Caffe Bene, Nutrition Station and The Coffee Club. The beauty and wellbeing sector will also be well represented at this year’s show. New and returning exhibitors include Ella
Baché and Endota Spa, offering exciting opportunities in these growth industries. Ella Baché’s CEO Pippa Hallas will be one of the expert speakers at the Expo seminars. She will be joined by an impressive lineup of industry players including John O’Brien from Poolwerx, Sara Pantaleo from La Porchetta, and Jason Zickerman, past president of the International Franchise Association. “The free seminars are always a popular feature of the Expo,” says Fiona Stacey. “It’s a good idea to check the seminar program on our website before you attend, to make sure you’re in time to hear from any speakers who particularly interest you.” Stacey adds that the impressive list of exhibitors from varied industries will give all visitors the opportunity to compare and research a diverse range of franchise opportunities, with investment levels from under $10,000 to more than $500,000. “Some visitors come with specific businesses in mind, while others are open to new ideas, in industries they had never previously considered,” says Stacey. “That’s the magic of the Expo, you never know quite what you’ll find!” The Sydney Franchising & Business Opportunities Expo is on 10am-5pm Friday 27 March – Sunday 29 March 2015 at the Royal Hall of Industries at Moore Park. Pre-register at franchisingexpo.com.au for a discounted entry fee. For more information and pre-registration go to:
The Malaysia Pavilion will showcase successful companies across a range of industries
66 Business Franchise Australia and New Zealand
Business Franchise Australia and New Zealand 67
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10 QUESTIONS TO ASK BEFORE BUYING A FRANCHISED BUSINESS Purchasing a franchise is often considered to be less risky than purchasing a business that is not part of a franchise system. This might be true, but no matter how profitable a business appears, there are many issues to consider prior to signing an agreement to buy a franchised business. Following are 10 questions that a prospective franchisee should ask before buying a franchised business.
Where do I start?
Commence by arming yourself with resources to enable you to make an informed decision. Here are some freely available resources about franchising that are essential reading:
• Information Statement prescribed by the Franchising Code of Conduct: http://www. accc.gov.au/system/files/Information%20 statement_0.pdf • The Franchisee Manual: http://www.accc. gov.au/publications/the-franchisee-manual.
What documents do I need?
Before signing any documents (other than a confidentiality deed) you should obtain the necessary documents to enable you to understand the full implications of the purchase. From the franchisor you must obtain the current franchise agreement and disclosure document. In addition, the Franchising Code of Conduct (“Code”) requires that the franchisor give you the Information Statement mentioned above and a copy of the Code. From the vendor of the business (if you are buying an existing business) or agent selling the business, you need to obtain a copy of the contract of sale of business and the existing lease of the premises (if relevant). In some States of Australia, a vendor of a small business is required to provide a disclosure statement about the business which includes
68 Business Franchise Australia and New Zealand
information about the financial situation of the business, verified by an accountant. In Victoria, this applies to all businesses sold for $350,000 or less. Even if your purchase price exceeds this threshold, you should ask to see financial statements for the last three years for the business. Now that you have the documents, read them!!
What other research should I do?
In addition, you should undertake your own research about the particular franchise system including: • the franchisor’s reputation in the market place; • the relationship between the franchisor and its franchisees; • the expansion plans of the franchisor, specifically whether the expansion plan includes setting up any other franchise system which could compete with or divert the franchisors attention from the system being considered; and • any current or threatened legal proceedings against the franchisor.
“In order to make an informed decision, it is critical to read all the documents and undertake extensive research and ask questions.” Louise Wolf | Senior Associate MST Lawyers
What should I ask other franchisees?
Speak to other franchisees about the following: • how the actual costs of investment (set up costs) compare to any estimates originally provided by the franchisor; • the level of support offered by the franchisor to its franchisees, especially to franchisees that are located outside the state from which the franchisor’s head office operates; and • whether the franchisor is accessible, organised, responsive to queries as well as suggestions.
The agent is calling me. Should I sign the contract of sale of business? If you are purchasing an existing business, the vendor will ask you to sign the sale of business contract. Vendors and agents sometimes apply pressure to secure a quick sale. However, it is important that you fully understand the implications of all the relevant documents before you do so.
I’ve tried reading the documents, but I don’t fully understand them. I think I need a lawyer and an accountant to help me. What should I ask them? Seeking the advice of a lawyer and an accountant who are experienced in franchising is the key to making an informed decision. The Code requires franchisors to obtain a statement from all franchisees that either they obtained the advice of a lawyer, accountant and business adviser or they were advised to do so, but chose not to. The remainder of the questions in this article
are questions you should ask your lawyer and/or accountant.
Minimum Performance Criteria
What are the most onerous things in the franchise agreement? The franchise agreement is the most important document in the suite of documents as it will govern the legal relationship between the franchisor and the prospective franchisee for the duration of the term of the franchise. The obligations of both the franchisee and the franchisor should be read carefully. The following types of clauses can have onerous implication for the franchisee: Payments under the Franchise Agreement Typically, fees are specified in a schedule at end of a franchise agreement. However, sometimes some fees are located inconspicuously within terms of the franchise agreement. Some franchise agreements provide that certain fees may be changed at the franchisor’s discretion. Term and Renewal After the term of the franchise agreement, there may be an option to renew the agreement for a further term, subject to you complying with certain conditions, including payment of a renewal fee, refurbishment of premises and entering into the ‘then current’ franchise agreement which may be different from the franchise agreement you signed. Territory Some franchise agreements are limited to a particular site, some grant a territory. A territory may be exclusive or non-exclusive. Some franchise agreements purport to have exclusive territories, but may actually only give exclusive rights to market in an area. In certain circumstances, exclusive territories can become non-exclusive.
Consequences of failure to meet minimum performance criteria typically include requirements to attend further training, after which there may be a right to appoint other franchisees to the territory, to force the franchisee to sell the business or to terminate the franchise agreement. Termination It is imperative that you understand the grounds upon which a franchise agreement can be terminated by a franchisor and ensure they comply with the Code. Franchisees can terminate a franchise agreement by exercising the cooling off right within 7 days after signing either; the franchise agreement or paying money under the agreement. After the cooling off period, unless the franchise agreement provides a right of termination, usually the only way for a franchisee to exit prior to the end of the term is to sell the business or to obtain the agreement of the franchisor. Not only is the franchisor not obliged to agree to end a franchise agreement, the franchisor may be entitled to claim damages from you for the profit it would have otherwise made, such as via royalties, until the end of the term, or at least until they can find a replacement franchisee. Restraints Most franchise agreements provide for a period after the end of the franchise agreement during which the franchisee is restrained from being in any way involved in a competing business within a specified area from the territory or premises. The new Code provides limited circumstances in which restraints will not be enforceable. Franchisees need to be aware that in the absence of such circumstances, such restraints may be enforceable.
Business Franchise Australia and New Zealand 69
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â€œSeeking the advice of a lawyer and an accountant who are experienced in franchising is the key to making an informed decision.â€? Unilateral Changes Franchise agreements often give the franchisor the ability to change the agreement unilaterally in ways that may not be obvious at first glance. Look for the ability for the franchisor to change things such as menus, approved goods and services, standards, intellectual property and fees from time to time, or in accordance with the Operations Manual. These types of clauses enable the franchisor to make changes to the system that may ultimately require you to incur cost, either directly such as in the case of an increase in fees, or indirectly, such as in the case of a requirement to refurbish your premises or replace signage.
What about employees?
A prospective franchisee must be aware of the employment issues that will affect it (whether the franchisee is employing new employees or former employees of a vendor). For example, the Workplace Relations Act 1996 (Cth) not only sets minimum terms and conditions of employment for employees, but also may impose onerous notification requirements upon purchasers, transferees or assignees of businesses. Breaches of these provisions in the Workplace Relations Act 1996 may result in severe penalties.
Is this the best location for this business?
the franchised business in that area both immediate and in the future. Where the franchisor has selected the location the prospective franchisee should request from the franchisor copies of its site selection policy, details of any demographic analysis performed in respect of the particular location. If the location is within a shopping centre, the prospective franchisee should request traffic flow information in respect of the shopping centre and specifically, in the area near the proposed location.
What is the best business structure for me?
Understanding the lease and other related documents is critical to that process. If the franchisor is the tenant and licenses the premises to you, you may also need to review the license agreement. In addition, in a retail premises, there may be a disclosure statement given by the landlord.
There are a number of different business structures which a franchisee can adopt. A decision as to the business structure to be adopted by the franchisee needs to be made early on and certainly before signing the contract of sale of business or franchise agreement. Some of the reasons for adopting the correct structure right from the outset include, minimising personal risk, protecting personal assets and making the purchase and the subsequent sale of the franchised business more tax effective.
In addition, careful consideration needs to be given to the particular area where the franchised business will be based, the demand for the goods and/or services offered by the franchised business within that area and any direct and indirect competition to
The possible structures which can be adopted include: sole trader; company; partnership; trust; or combination of a company and a trust structure. A prospective franchisee should bear in mind that each type of structure described above attracts different
If the proposed franchised business operates from a fixed location, due diligence in respect of the location will be necessary.
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set up costs; on-going compliance costs; tax rates; and personal risk. Arranging for your lawyer and your accountant to speak with each other will assist in achieving the best outcome. There are many things to consider before signing an agreement to purchase a business. In order to make an informed decision, it is critical to read all the documents and undertake extensive research, ask questions of the franchisor and other franchisees and seek the advice of an experienced franchising lawyer and accountant.
Louise Wolf is a Senior Associate in the Corporate Advisory and Franchising Team at MST Lawyers. She is one of several experienced franchising lawyers at MST Lawyers who advise franchisors, franchisees and suppliers to the franchise sector on all aspects of franchising, including providing pre-purchase and ongoing advice to franchisees. Located in Melbourneâ€™s industry heartland, MST Lawyers has strong commercial law skills and provides clients with sensible solutions. For more information contact MST Lawyers at: P: 03 8540 0200 E: email@example.com W: www.mst.com.au
coffee, tea... and me! Put yourself in the picture. Get out of the rat race and into your own Cafe2U Mercedes Benz. Enjoy meeting people and making money with the proven techniques of the worldâ€™s largest mobile coffee franchise. Enjoy your work. Spend time with your family. Be your own boss!
1300 223 328 (AU) 0508 004 388 (NZ) www.cafe2u.com CAFE2U004
24/11/2013 10:12 pm
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THE NEW FRANCHISING CODE :
WHAT YOU NEED TO KNOW
With changes to the Franchising Code of Conduct taking place on 1 January 2015, there are several things franchisees, franchisors and prospective franchisees need to know. The Franchising Code and what it does The original mandatory code was introduced in 1998 to regulate the conduct of franchising participants towards each other. The Franchising Code is binding on all industry participants and applies to the 1,160 franchise systems and 79,000 franchise units trading in Australia. The Code requires franchisors to disclose
speciﬁc information to both potential and existing franchisees. The Code also sets out conditions relating to the rights of both parties under a franchise agreement and it provides a way for franchisees and franchisors to try and resolve disputes.
Key features of the new Code From 1 January, the Code: • introduces an obligation for parties to act in good faith in their dealings with one another; • introduces financial penalties and infringement notices for serious breaches of the Code; • requires franchisors to provide prospective franchisees with a short information sheet outlining the risks and rewards of franchising; • requires franchisors to provide greater transparency in the use of and accounting for money used for marketing and
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advertising and to set up a separate marketing fund for marketing and advertising fees; • requires additional disclosure about the ability of the franchisor and a franchisee to sell online; and • prohibits franchisors from imposing significant capital expenditure except in limited circumstances.
The good faith obligation The good faith obligation requires both parties to a franchise agreement to remain loyal to the contract they have entered into. Your conduct may lack good faith if you act dishonestly, for an ulterior motive or in a way that undermines or denies the other party the benefits of the contract. While good faith requires you to have regard to the rights and interests of the other party, it does not prevent you from acting in your own legitimate commercial interests.
AU S TR A LI A A N D N E W Z E A L A N D
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“The Franchising Code is binding on all industry participants and applies to the 1,160 franchise systems and 79,000 franchise units trading in Australia.” Dr Michael Schaper | Deputy Chairman ACCC
Indicators of good faith
Penalties and infringement notices
• being honest with the other party
The Code now requires franchisors to provide prospective franchisees with a short information statement outlining the risks and rewards of franchising. The information statement is a starting point rather than a complete guide to franchising and should be combined with independent legal, accounting and business advice.
The Australian Competition and Consumer Commission has new powers to issue infringement notices of $8,500 for body corporates ($1,700 for individuals and other entities) and seek penalties of up to $51,000 in court for serious breaches of certain Code provisions. These changes will go unnoticed by franchisors and franchisees who do the right thing. However, the new powers will play an important role in achieving compliance with the Code. The ACCC will be focusing on particularly serious conduct and, as always, we will take a common sense approach to enforcing the Code.
• considering the other party’s interests • consulting with the other party regarding proposed changes • trying to resolve disputes as they arise (either directly, or through mediation) • not exercising rights, powers or discretions for an ulterior purpose.
Marketing funds There are new rules that increase transparency and accountability around franchise marketing funds. The Code states that marketing fees paid by franchisees must only be used to meet certain expenses, including ‘legitimate marketing or advertising expenses’. The term isn’t defined in the Code, but something like a billboard or TV ad will be legitimate, whereas putting a logo on the franchisor’s new Lamborghini may not be. Franchisors need to set up a separate bank account for the marketing fund and provide information about how the money is spent. The marketing fund must be audited each year, unless 75 per cent of the franchisees that contribute to the fund vote against the audit.
Use of marketing and advertising fees Under the Code, marketing and advertising fees may only be used to meet expenses that: • have been disclosed in the disclosure document • are legitimate marketing or advertising expenses • have been agreed to by a majority of franchisees or • reflect the reasonable costs of administering and auditing the fund.
In addition, the franchisor’s disclosure document (which the franchisor must give to a prospective franchisee at least 14 days before they enter an agreement or pay non-refundable money) must now contain information about the ability of the franchisor and a franchisee to benefit from online sales.
Capital expenditure While there are exceptions, the new Code restricts franchisors from imposing significant capital expenditure on franchisees. The Code doesn’t define ‘significant capital expenditure’, but it does set out a range of circumstances where franchisors can require franchisees to incur large expenses.
Expenses A franchisor can require franchisees to incur expenses where the expenditure: • was disclosed to the franchisee in the disclosure document that they received before entering into, renewing or extending their franchise agreement • will be incurred by a majority of franchisees and a majority of those franchisees approve the expense • is necessary to comply with legislative obligations • has been agreed to by the franchisee • is considered necessary by the franchisor as a capital investment in the franchised business, justified by a statement.
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The new Code will impose one set of obligations on all franchise agreements entered into, renewed, extended or transferred after 1 October 1998. However, a small number of Code provisions will not apply to agreements entered into prior to 1 January 2015. More information on the Code is available at www.accc.gov.au/franchisingcode or by calling the ACCC Small Business Helpline on 1300 302 021. You can also find out about the changes to the Franchising Code by viewing the ACCC’s industry webinar which was recorded on 9 December 2014. www.youtube.com/user/ACCCvideos You should seek legal advice if you are still uncertain about your rights and obligations under the new Code. Dr Michael Schaper is Deputy Chair of the Australian Competition and Consumer Commission. The ACCC is an independent Commonwealth statutory authority. The ACCC enforces and encourages compliance with the Competition and Consumer Act 2010 which includes the mandatory Franchising Code of Conduct. For franchising information, go to: W: www.accc.gov.au/franchising
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 CGBâ€™s website also provides an additional advertising and information format and complements our publications.
www.businessfranchiseaustralia.com.au Business Franchise Australia and New Zealand 75
FRANCHISEE IN ACTION : Ha i r h ouse Wa r eh ouse
Hairhouse Warehouse shares the power of good hair with regional Austr alia. Hairhouse Warehouse is on a mission to spread the power of good hair to every corner of Australia, and they are well on their way to realising that dream. With ambitions to open twelve new stores by the end of the financial year, they are casting their net wide to attract the highest calibre of candidates to help grow their family, and bring employment and growth to regional Australia. Peter Fiasco, Franchise Development Manager for the Hairhouse Warehouse group, says the brand gives people in regional areas the opportunity to run their own business while still being connected to a prestigious national brand. “We look for people with good leadership skills, a passion for excellence, and an understanding of how business works,” Peter says. “Franchisees don’t necessarily need hair experience, although our brand often attracts people from a hairdressing background.”
Success in regional Queensland Raelene Dickinson had clocked up an impressive twenty-two years’ experience as a hairdresser before she and husband, Matt, sought opportunities to run their own business. The dynamic husband and wife duo has lived in Gladstone, Queensland, for over ten years. With three children aged sixteen, fifteen and twelve, life is busy for the Dickinsons. Hairhouse Warehouse offered the ideal solution – the chance to work for themselves with the backing, support and expertise of a team of seasoned professionals. November 2014 saw the opening of their new store in
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“Careful planning goes into the selection of potential sites, with consideration given to catchment and demographics’.”
Emily Lennerth and Leanne Hoffmann
Gladstone – the first in the group’s expansion rollout across metropolitan and regional Australia. “We are so excited to be part of the Hairhouse Warehouse family, and also about bringing a new level of hairdressing in both products and services to the community in Gladstone,” Raelene says. “We plan to have four skilled team members working to ensure we deliver superior customer service.” Having worked for another local hairdresser as a store manager, Raelene reflects that owning her own store has enabled her to utilise her already highly developed relationships with key suppliers. “Hairhouse Warehouse’s strong buying power will ensure a very compelling offer to our customers,” Raelene says. Raelene’s husband, Matt, has recently made the switch from the mining industry to gas, in order to establish a more flexible work-life balance and support his wife in her endeavours. Matt also has experience working in his parents’ general community store, and so has a clear understanding of small business and what it takes to make it successful. “Hairhouse Warehouse has surprised us in the level of support and care they have given
(L-R) Joseph Lattouf – Co-founder with Raelene and Matt Dickinson
in helping us to achieve our dream,” Raelene says. “We are excited not only about opening this store, but also the possibility of owning a second store in twelve months time.” This goal may be well within the couple’s reach since Hairhouse Warehouse has recently remodelled its cost of entry, ensuring the payback period is around twoand-a-half years. “Our priority is to put franchisees in the locations where they have the highest chance of success,” says Peter Fiasco. Careful planning goes into the selection of potential sites, with consideration given to catchment and demographics. “We also look
for shopping centres that are suitable from a traffic perspective,” Peter adds.
A family affair in Mt Gambier Once a site has been identified, the group puts feelers into the local community to source quality candidates. Sometimes, however, a potential franchisee initiates a lead. Such was the case in South Australia’s Mt Gambier, when mother-daughter team Leanne Hoffmann and Emily Lennerth approached Hairhouse Warehouse with a proposal. “I had been looking at Hairhouse Warehouse for a number of years,” Leanne says. “The
Business Franchise Australia and New Zealand 77
FRANCHISEE IN ACTION : Ha i r h ouse Wa r eh ouse
“Peter is so passionate and genuine about helping people achieve their dream,” Emily says. “The level of care he’s provided has been outstanding. Every question we’ve had, every issue that’s arisen, Peter has taken it upon himself to follow up on personally. “Peter has really helped us through the process,” Leanne says. “He’s come to our home town to see us and go through everything personally, and he’s always available to answer questions. Not having to speak to a different person every time we have a question has really boosted our confidence in the group.” Peter has also put Leanne and Emily in touch with other franchisees for support and networking, and encouraged the two women to contact them.
“Not many people in regional South Australia have access to an outlet like Hairhouse Warehouse, I think they’ll be delighted at the fantastic range of products on offer, and the unique concept of having hair, beauty and retail all in one place.”
“It makes the world of difference talking to someone who has been through the same experience, hearing about how they dealt with various aspects. It has really put us at ease,” Emily says. “Everyone we’ve spoken to has had a positive experience with Hairhouse Warehouse. When you hear it directly from other franchisees, you know it’s not just spin.” Leanne and Emily are similarly impressed with the ongoing support and training that’s been extended to them. “It’s reassuring to know we won’t be left to fend for ourselves,” Leanne says.
Do you have what it takes? franchise structure is appealing, because you’re never alone – you always have the support of the network to back you. I have always believed that a Hairhouse Warehouse outlet would do well in Mt Gambier, and Emily and I have been waiting for the right opportunity to run a family business together.”
giving them a well-rounded skill set as a team.
Plans for their new store are well underway, with the outlet due to open in Mt Gambier’s Marketplace shopping centre in May this year. The pair couldn’t be more excited.
Unrivalled support and care
“Not many people in regional South Australia have access to an outlet like Hairhouse Warehouse,” Emily says. “I think they’ll be delighted at the fantastic range of products on offer, and the unique concept of having hair, beauty and retail all in one place.” Emily and her mother Leanne both hail from beauty therapy backgrounds, and Leanne’s most recent role has been in pharmacy retail,
“Mum will be the retail manager, I will run the beauty side of the salon, and we’ll employ someone as hair manager,” Emily says, adding that her husband, Mark, whose work in the fishing industry is seasonal, will work with them during his industry’s off-season.
Still, starting up a new business can be a daunting prospect, especially with Leanne working a full-time job fifty kilometres from Mt Gambier, and Emily taking care of her two-year-old daughter. But Leanne says what could have been a stressful event has run as smoothly as possible with the support of the Hairhouse Warehouse team. Leanne and Emily speak in glowing terms of their experience with Hairhouse Warehouse, citing in particular the support they’ve received from their main conduit, Peter Fiasco.
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Hairhouse Warehouse wants to repeat its phenomenal Victorian success across the country, and is looking to open new stores in areas where they can better meet the needs of their customers. In addition to key urban centres in Perth, Sydney and Darwin, these include Hervey Bay and Toowoomba in Queensland, Geraldton, Broome, Mandurah and Bunbury in WA, Tamworth, Gosford, Goulburn, Dubbo, Nowra and Wagga in NSW, and Sale in Victoria. If you have a genuine interest in people, and a conviction that your ability and hard work will drive results, Hairhouse Warehouse may help you achieve the goal of owning your own business. For a confidential discussion, please contact Peter Fiasco at: P: +61 451 370 060 E: franchising@hairhousewarehouse. com.au W: hairhousefranchising.com.au
o o R e h Rent T
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Rent The Roo was established in 1976 specialising in household appliances & furniture rentals with over 60 franchise territories throughout Australia. With 39 years of trade and development, our continued focus is on customer satisfaction. Rent The Roos’ home-based, simple and productive business model combines low running costs with the highest possible returns. With full support of the Management team and initial & on-going training, franchisees have access to proven business resources and marketing material to help maximise the potential of business growth. If you are looking for a proﬁtable business model that offers a fantastic work/home balance, Rent The Roo ticks ALL the boxes!
Work from Home
Low cost entry level
Bob and Julie Sager have achieved a record amount of business in their ﬁrst 3 years of operation and were recently awarded the Franchisees of the Year at the Rent The Roo national conference, also taking home the $11,000 reward that comes with it! Bob bought his ﬁrst Rent The Roo franchise in Townsville in July 2009. He saw the ﬂexible and convenient franchise model as one that would suit his relaxed Northern Queensland life style. Since then, he has purchased the Gold Coast South and Mount Isa territories and business is booming! “Rent The Roo is a great business model; it has a terriﬁc amount of transparency and ﬂexibility over its competitors. Rent The Roo has a solid ﬁnancial background and is very open when discussing it. There was no smoke and mirrors; it is really just an honest and supportive franchise with nothing to hide,” said Bob.
Greg & Bec Smith have recently joined the Rent The Roo family, running the Wangaratta franchise territory in northern Victoria. Greg previously worked for many years in the mines of Western Australia, regularly travelling from his home in rural Victoria. When Greg and Bec started a family and the travelling began to take its toll, they decided it was time to seek a career change and look for a business model that had a fantastic Work/Life balance. “We were looking for a life after mining, and living in Mansﬁeld Vic, it’s a very lifestyle based town with not a lot of job opportunities. We wanted something that still gave us the freedom to keep our busy lifestyle schedule. A friend of ours recommended we look into Rent The Roo as his brother owned a franchise in Tasmania and there was no looking back. We decided to look into it and the rest is history!” said Bec.
For more information visit the FRANCHISE tab on our website or contact Grant Garraway at The Franchise Shop on 1300 139 557 or email firstname.lastname@example.org
renttheroo.com.au *Finance available to approved applicants.
Rent The Roo Pty Ltd Australian Credit Licence 387405 Business Franchise Australia and New Zealand 79
sn a pshot: LOCA L A PPLI A NCE REN TA LS
Help yourself while helping others of running the franchise on a day to day basis so all that’s needed is enthusiasm and the desire and determination to grow your own successful business. With an annual conference each year you will be able to attend you will keep up-todate with new methods, new products, and sales and marketing techniques, whilst at the same time interacting with other franchisees and discussing what works for them. Systems and procedures are continuously updated, allowing you to take advantage of this time to increase your skills and improve your business.
In an ever increasing home appliance rental market, Local Appliance Rentals are the largest rentals franchise in Australia today. Since franchising five years ago, there are now more than 100 franchisees in Australia, New Zealand and the United Kingdom. With a wide range of products including TVs, computers, game consoles, home entertainment systems, stereos, coffee tables, dining tables, fridges, freezers, microwaves, washers, dryers, air conditioners, beds, baby furniture, BBQs, outdoor furniture, fitness equipment and kids’ play equipment, Local Appliance Rentals helps their customers get what they want.
Differing entry levels As a home based franchise, Local Appliance Rentals is ideally suited for people looking for that elusive work/life balance. The only requirement is a basic home office and funds available to purchase the rental goods on behalf of the customers. With initial investment required from just $29,750 plus GST, there are three levels of franchise available, Silver, Gold and Platinum.
Silver: This is the smallest franchise level and comes with the minimum territory size of approximately 16,500 people. This franchise level is suitable for operators in a regional area, usually in a small country town. Gold: This franchise level comprises of three franchise units with a territory size of approximately 50,000 people. This is more suited to the full-time operator with more time and capital to invest, and would ideally suit a couple or motivated sole operator. Platinum: This franchise level comprises of 6 franchise units with a territory size of approximately 100,000 people. This enables a full-time operator to either operate the franchise themselves or to have several subfranchisees working under them. How many hours you work in your franchise each week is up to you. If you intend to operate the business part-time it’s recommended that you start with the silver level of franchise. The hours are also very flexible, so you may choose to work 35 hours one week but only 10 the next.
Training and ongoing support The business is easy to understand and easy to run, therefore no specialist skills or experience are required. The Franchisee Kit and training provided will cover all aspects
80 Business Franchise Australia and New Zealand
Each franchisee receives their own exclusive territory. Divided into franchise units, with each unit consisting of approximately 16,500 people, which experience tells Local Appliance Rentals is the minimum number of people required to run a successful small franchise on a part time basis. For a full time business, ideally there would be three franchise units, totalling a territory size of approximately 50,000 people and these differing territory sizes are reflected in the three levels of franchise available. Each exclusive territory is individually tailored for each franchisee, with areas delineated by postcode.
Why choose Local Appliance Rental? With a team dedicated to providing customers with brand new, high quality products that meet their needs and circumstances, Local Appliance Rentals pride themselves on the service provided to their customers, from the initial contact through to the end of the rental term. Don’t miss out on your opportunity to join the largest rental franchise company in Australia, visit: W: www.localappliancerentals.com.au/ franchising
BRAZILIAN BUTTERFLY ARE SPREADING THEIR WINGS. THE BRAZILIAN BUTTERFLY PARTNERSHIP • The Brazilian Butterfly brand is only as strong as those who represent it and they know that their continued success is down to our franchisees sharing and embracing the vision for business success and growth. • In return for that commitment, Brazilian Butterfly provides the highest level of support, training and coaching to ensure you and your business is a profitable and successful one.
With more than 10 years’ experience and salons right across Australia, Brazilian Butterfly are arguably one of Australia’s largest and most successful beauty salon franchise groups. From standard and specialty waxing for both men and women, to the latest in laser hair removal, spray tan applications, and exclusive skin care products – Brazilian Butterfly have it covered.
Tanya believes that central to the Brazilian Butterfly philosophy is a commitment to providing exceptional customer service in a welcoming, energetic and professional environment. She takes enormous pride in the brand and together with her husband of over 20 years, Scott Farrar; they are committed to ensuring that the client experience in every Brazilian Butterfly salon is a great one.
In 2002, after working very successfully in the beauty industry for more than 15 years, Brazilian Butterfly founder Tanya Farrar recognised a gap and subsequent need for a professional, yet fresh, fun and progressive beauty salon to take advantage of the specialty niche market that had been neglected by other salons - Brazilian waxing.
The immediate expansion plans have progressed significantly, where the best franchised locations have been sought and now comes the requirement for the best franchisees.
WHY PARTNER WITH BRAZILIAN BUTTERFLY? • They are one of Australia’s most recognised successful and profitable franchise groups in a progressive growing industry.
• Experience initially in the beauty industry is not a prerequisite; you just need to be committed, driven, customer service focussed, and have the desire to succeed – the rest they can teach you! • As your business partner, they have an invested interest in your success. This is what drives the entire Brazilian Butterfly family – it’s in everything they do and they’re all about you. If you are serious about partnering in a business where you will be rewarded quickly both personally and financially, then you need to take action now.
FOR ALL FRANCHISING ENQUIRIES PLEASE CONTACT Adam Simon, General Manager. (03) 9456 5700 email@example.com brazilianbutterfly.com/franchise
• You’ll be part of a great team with all the support you need from training to operations, to marketing and recruitment. You’ll be in business for yourself, but not by yourself. • Using both traditional and digital media, they have proven national marketing and advertising strategies, plus local area marketing initiatives that drive growth and ensure business success.
Business Franchise Australia and New Zealand 81
sn a pshot: v.i.p. h o m e serv ices
his life on track
Dominic Azzopardi has come a ‘fairway’ in a short time after swapping his golf clubs for a lawn mower. Dominic, a former professional golfer and coach, is now happy tending to the grass rather than putting on it. Despite his love of the game, Dominic’s job as a golf pro, coach and running the golf shop combined with working weekends was beginning to take its toll on the father of two. “It was really tough trying to balance being a father of twin girls, a husband and the demands of the job; I realised that a change was needed. Running a golf pro shop has given me many transferable skills that I will be able to use. However, I can honestly say that the training I received from V.I.P has been fantastic. As a coach I recognise good coaching skills, and the thorough training has given me the confidence to go into my business knowing that I have the right skills
and a strong brand behind me to be a real success. It’s also very reassuring to know that I have a support network and mentor to help me as I go,” explained Dominic. Dominic not only changed his career but also relocated to run his own Lawns & Gardens business. Swapping what he describes as the ‘grey skies of Ballarat’ Dominic moved to the Sunshine Coast and hasn’t looked back, “I’m so pleased that I made the move from so many different angles; my career, the new location and especially the lifestyle I’m now enjoying. I get to spend more quality time with the family. My girls love having their dad around and I now feel that I have the work-life balance right. My life in golf has always involved working outdoors, something that I love. I also enjoy working in my own garden so this was an ideal opportunity for me.” Four weeks in to his new business and Dominic says that since his move he hasn’t played golf once and that he is, for now, enjoying a break from this aspect of his life. Presently you are far more likely to find Dominic with his family enjoying a day at the beach rather than a day on the golf course!
82 Business Franchise Australia and New Zealand
Dominic Azzopardi, V.I.P. Home Services Franchisee
If, like Dominic, you are interested in finding out more about running your own franchise business or would like to spend some time with an experienced franchisee to give you an impression of what life could be like as a franchisee, simply contact V.I.P. on: P: 13 26 13 W: www.viphomeservices.com.au.
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Expanding the limits of your mind Prince does the work of 100 men, improving the lives of thousands through his innovative medical, business and aid projects.” Sam believes an aid organisation should be run with the same rigour as business. He has deeply and carefully formed his philosophies about how to most effectively make his mark in the world, believing firstly that one must have a clear vision as to what comprises a basic human right and a basic human responsibility. “As doctors we take the Hippocratic Oath of ‘first do no harm’. If you actually don’t understand where that line is you can end up harming peo-ple by taking power away from them when you start doing things that you think are basic human responsibilities,” he says.
Dr Sam Prince is a humanitarian, philanthropist, entrepreneur and medical doctor – a unique, multi-talented individual driven by an intense desire to help those less fortunate than himself. He lives by a motto his mother gave him: “Expand your life to the limits of your mind and expand your mind to the limits of your life.” Sam started Zambrero at the age of 21 while studying to become a medical doctor. It was his way of combining both his desire to help the underprivileged and fuel his entrepreneurial bent. The driver behind Zambrero, a franchise of quick service Mexican restaurants serving healthy fresh food, is its Plate 4 Plate charity initiative which sees a meal delivered
somewhere in the developing world for every burrito or bowl sold in any of its franchises. So far Zambrero’s initiative has supplied more than 4 million meals around the world. What’s more, Zambrero has been recognised four years in a row (2011-2014) as one of Australia’s fastest growing franchises. There are 70+ restaurants so far around the country with dozens more on the drawing board both here and overseas. Zambrero however is just one way in which Sam is fulfilling his core desire to help people in need. In 2010 he set up One Disease, an organisation to work with the Indigenous eradicating scabies, a disease rife in their communities. This work directly led him to be named 2012 Young Australian of the Year for the ACT. Prior to One Disease, Sam established the Emagine Foundation which built 15 schools in Sri Lanka, Vietnam and far north Queensland, and continues to do so throughout the Asia-Pacific region. His achievements resulted in GQ magazine naming him Man of Chivalry in its 2011 Men of the Year list, and stating: “Sam
84 Business Franchise Australia and New Zealand
Sam’s success is also driven by an innate talent to see the gaps in a market or problematic environment, and then implementing practical solutions to find solutions. His genuine passion, sense of humour and great intelligence has always inspired others to believe and follow him in his vision. His vision is now set to have 300 restaurants operating around Australia within the next 5 years. The first international restaurant opened in Bangkok in July 2014, and five more are planned to open in Thailand by early 2015. Zambrero also plans to open at least 75 restaurants across New Zealand within the next 10 years. The first New Zealand franchise opened in November with another 5 to follow by February. The US is also in Zambrero’s sights, with the first restaurants scheduled for mid 2015. For more information contact Talia Waelsch on: P: 1300 zambrero E: Franchise@zambrero.com W: www.zambrero.com
JOIN OUR GROWING NUMBERS Zambrero is no ordinary fast food chain. Whipping up modern Mexican made to order, Zambrero is proud to be healthy, fresh and socially responsible. It’s fast food minus that ‘greasy guilt in the stomach’ feeling afterwards...
Let’s get you started... OUR Email: Franchise@zambrero.com Written By Kristy Attard
Zambrero has to be the only fast food chain in the world that was founded by a doctor who is also a philanthropist. It was by pure chance that the CEO of Zambrero, Stuart Cook, just so happened to meet the brainchild of the business. “I actually was on a bus on the way to the Taj Mahal in India and sitting next to me was Dr Sam Prince,” recalls Mr Cook. Today, Zambrero captures the authentic flavours of Mexico and gives them a funky twist, feeding the body and soul.
Dancing Tastebuds When Dr Prince was a university student, he worked part time in a Mexican restaurant. He noticed that while America had
plentyus: of Mexican food joints there Call 1300fast ZAMBRERO
was a gap in the Australian market. As a Web: www.zambrero.com result, Zambrero is geared toward Australian tastes, with a colourful menu full of flavour. There is no grease, no heavily processed meat patties, no wilted scraps of lettuce... everything is nutritious, delicious and made with love. Zambrero is filling but never bloating, Modern, healthy Mexican“We inspired fresh but never fattening. arefusion very nq8ÇÁ±´¡ Á±È±8tbntÁ±b¼ much an Australian – Mexican fusion of sauces, spices and meat marinades. Made fresh to order, every time, food,” explains Mr Cook. We’re using taking the best quality fresh local produce. some of the styles of Mexican food but putting a real Australian fresh aspect on it by including a lot more salads, fresh salsas and our own range of sauces which allow you to choose whether you want it spicy or not.”
There is more to Mexican cuisine than scorching hot food. “I’d go even a little bit further to say that the cliché Mexican BURRITO food is not only hot and spicy but meaty, cheesy and oily.” Conversely, Zambrero is a sensory explosion celebrating everything authentically delicious about Mexican cuisine. Think tomato salsa, creamy guacamole, sizzling lime rice... each bite is a mouthful of spicy, smoky, zesty, crunchy and tender all at once. Ordering is easy – customers can have NACHOS their food exactly the way they like it. Simply choose a style, a filling, some delicious salsas and a sauce. “Once you come in we have a very open approach to the way that we construct our food,” says Mr Cook. “It’s in front of 7 your eyes so we don’t hide anything
h av e you r say
Thriving in challenging times At the tapering-off of what has been a challenging economic era, three mature Australian franchises have emerged triumphant, with plans to expand their market share and grow their networks. Hairhouse Warehouse, a franchise that blossomed from humble beginnings in 1992, plans to grow its 140-store network to more than 180 by the end of 2017. As the La Porchetta group celebrates its thirtieth anniversary, it shifts from a period of consolidation to one of growth, with plans to expand its restaurant network across Australia and New Zealand to 100-strong. And physiotherapy and wellness group, Back in Motion, has grown from a single practice in 1999 to its current eighty, with another twenty outlets planned for 2015. Notably, all of these groups hail from sectors that are subject to discretionary spending – often the hardest hit segments when consumers tighten their belts. So, what has set these networks apart from their competitors and allowed them to grow during a period that has been slow for many? The answer lies in strategic planning, offering the consumer something unique, and unrivalled support for franchisees that engenders a sense of belonging.
Strategic growth Hairhouse Warehouse, Australia’s largest hair and beauty retailer and salon network, targets specific regional and urban areas to ensure customer care is extended Australiawide. They capped off 2014 with a new store in Gladstone, Queensland, another set to open in Indooroopilly in the first half of 2015, and stores scheduled for Tamworth and
Hervey Bay. New stores are planned for the Northern Territory, including Darwin, and a new store in Mt Gambier, South Australia, will open early this year. The group has identified a number of key urban centres in Perth, as well as several regional centres in Western Australia. In NSW, further stores are planned for Sydney as well as six regional sites, such as Erina Fair, and Victorians can look forward to a new outlet in Sale. Peter Fiasco, Franchise Development Manager for the Hairhouse Warehouse group, stresses the importance of sustainable, strategic growth over growth for growth’s sake. “We’d like to see a balanced representation of our brand across the country, so we look for gaps in the market,” says Peter. “Our outlets thrive in key urban and regional areas because there are few or no comparable retailers in those regions.” Peter explains that the wide-reaching effects of the digital age and social media have heightened consumer awareness about available products, and customers are eager to buy. “Customers in many areas are either travelling to buy these must-have products, ordering them online, or simply missing out,” says Peter. “We want everyone to have access to the power of good hair – not just city people. We’re taking the product to where the demand is.” Similarly, La Porchetta works closely with its franchisees to collaborate, plan, and keep abreast of changing demographics. With expansion in mind, they have done a thorough analysis of all of their sites to determine where consumer demand is strongest. “We are going where our customers want to see us,” says CEO Sara Pantaleo. The group boasts seventy restaurants across Australia and New Zealand, concentrated in metropolitan and regional areas. Here,
86 Business Franchise Australia and New Zealand
its appeal lies partly in its carefully crafted menu, which allows franchisees to tailor specials to local taste, as well as its signature quick, friendly service with a smile. “We are your ‘local Italian’,” Sara says, pointing out that La Porchetta is as popular with young families as it is with older people. Jason Smith, National Group Director for Back in Motion, says that although physiotherapy falls into the healthcare category, it is not primary healthcare, therefore its target market is those with enough disposable income to afford the service. This Melbourne-born franchise does well in high street, retail locations in middle-class suburbs. “We have sold licenses in every state and territory across Australia,” Jason says. “Our industry is poorly serviced, so wherever we actively solicit interest, we grow. Our strategic focus now is on Sydney, Perth and Brisbane.”
Standing out from the competition Hairhouse Warehouse invests seriously in studying market and industry trends, so they can offer the very latest in hair care to their customers. The group leverages its buying power with suppliers, allowing them to offer their customers the best possible value while protecting the trading terms of their franchisees. “Hairhouse Warehouse stores stock the widest range of professional hair care products on the market at the most competitive prices,” Peter Fiasco says. “We also stock brands that are exclusive to Hairhouse Warehouse.” More than a mere tagline, Back in Motion’s trademark “Results for Life” is the philosophy that underpins this thriving group. Their greatest competitors for market share are long-established local operators who have earned trust and respect within local communities.
â€œBack in Motion offers holistic, tailored health solutions â€“ not quick fixes,â€? says Jason Smith. â€œWe have extended the scope of our services to encompass wellness management and education in lifestyle choices. In this sense, we think and act differently from our peers.â€?
â€œFranchisees fall into two categories: ambitious young graduates, excited to be part of a growing brand, and experienced physiotherapists who may have run their own practice.â€? Jason Smith, Back In Motion
In the restaurant business, customer spending is highly discretionary yet, throughout the economic downturn, La Porchetta has remained a strong performer. In terms of what they offer their customers, this group is unrivalled in the casual dining sector. â€œWe only work with the freshest ingredients,â€? says Sara Pantaleo. â€œWe donâ€™t take shortcuts with our ingredients â€“ that is a very important factor and itâ€™s what sets us apart from everyone else. Our meals are all prepared from scratch; other businesses our size generally donâ€™t do that.â€? â€œOur customer feels really cared for when they visit,â€? Sara adds, â€œwith full service and an extensive menu, and the fact that we are local â€“ weâ€™re part of the community.â€? She explains that, as well as having a standard menu throughout the network, each restaurant has a unique specials board that is tailored to local customers. â€œThat is where the local aspect comes into it,â€? Sara says.
Unrivalled support So, from a franchiseeâ€™s point of view, how do these groups stack up against the competition? According to Peter Fiasco, itâ€™s all about culture. â€œOur brand has a unique culture with people at its centre, working together to build a great brand and success for all,â€? he says. â€œWe seek out people with the drive and passion to succeed, and a genuine interest in people. We provide all the tools, training and support from there.â€? Hairhouse Warehouse delivers on its promises, providing not only the most lucrative margins in the industry, but also setting new benchmarks on systems, training and ongoing support. New franchisees are prepared for every aspect of opening and operating their new business. Cost of entry includes site analysis and leasing negotiations, as well as the support of a setup team.
wning a La Porchetta franchise O means more than owning a business. It means youâ€™re part of New Zealandâ€™s fastest growing independently owned Italian restaurant chain.
With over 20 years experience in franchising and around 80 locations internationally, La Porchetta leads the way as New Zealandâ€™s favourite value-for-money Italian cuisine restaurant.
>f]Pb[XRT^U;P?^aRWTccP A franchise with the right ingredients }"hTPabTg_TaXT]RTX]8cP[XP]aTbcPdaP]cb }8]SXeXSdP[cTaaXc^aXTb }2^\_aTWT]bXeTcaPX]X]Vbd__^acU^aP[Tf UaP]RWXbTTb }>]V^X]VcaPX]X]V^_TaPcX^]bP]S\PaZTcX]Vbd__^ac }?a^eT]bhbcT\bP]S\P]dP[b }H^dRP]]^fP[b^RW^^bTcWT;P?^aRWTccP?a^]c^ QdbX]Tbb\^ST[fWXRWXbP]TgRXcX]V]TfR^]RT_cX] cPZTPfPh_XiiPP]S_PbcP^dc[Tcb C^[TPa]\^aTPQ^dc^f]X]VP;P?^aRWTccPUaP]RWXbT R^]cPRc)La Porchetta Bd__^ac>UUXRTeXP^da^][X]T UaP]RWXbX]VT]`dXahU^a\Pc)fff[P_^aRWTccPR^\^a T\PX[)UaP]RWXbX]V/[P_^aRWTccPR^\ CWXbXbVT]TaP[X]U^a\PcX^]^][hP]SSTcPX[b PaTR^aaTRcPb^U '9d]T! ;P?^aRWTccP 3XbcaXQdc^ab?ch;cSaTbTaeTbcWTaXVWcc^RWP]VT UTPcdaTbP]SaT`dXaT\T]cb^UPUaP]RWXbTPb bcPcTSWTaT2^]cPRc;P?^aRWTccPBd__^ac >UUXRTc^aTPS[PcTbc5aP]RWXbT0VaTT\T]c 2^_haXVWcÂŽ! ?P]cP[T^8]eTbc\T]cb?; P]S5P]S0=P]XP?;0[[aXVWcbaTbTaeTS
Jason Smith says that Back in Motion franchisees often emerge from within the group â€“ employees who perfect their skills as therapists until they feel ready to run their own practice. He says that while they are
Business Franchise Australia and New Zealand 87
h av e you r say
thoroughly trained in healthcare, most have little knowledge of business. “We have built our model to provide everything they need to run a practice, except for actual patient treatment,” Jason says. “Branding, site selection, research, our technology platform – it’s a complex back end.”
“Franchisees often emerge from within the group – employees who perfect their skills as therapists until they feel ready to run their own practice.”
Jason adds that there are only three things the group expects of its franchisees: “They must thrill the patient with exceptional service, they must lead a great culture among their staff, and they must use the resources we’ve built without trying to reinvent them.” La Porchetta celebrates its thirtieth birthday with a new website, a monthly newsletter, and an innovative online marketing portal for franchisees. “We’re very excited about the launch of the new marketing portal,” Sara says. “Franchisees will be able to access the portal to develop local area marketing campaigns. All tools and materials will have their restaurant’s specific details already in place.”
“When you buy a Hairhouse Warehouse franchise, you’ll work for yourself but you won’t be alone.”
Like Hairhouse Warehouse, some La Porchetta franchisees are from a related industry background, although it’s not a prerequisite. “We look for people with a zest for life – people who love food and enjoy working with people,” Sara says. “We can teach them the skills they need to run a restaurant.” “We organise as many opportunities as possible for our franchisees to get together,” Sara says. “Networking among peers is vital for the success of our franchisees and for the La Porchetta brand.” Jason says that Back in Motion’s franchisees fall into two categories: ambitious young graduates, excited to be part of a growing brand, and experienced physiotherapists who may have run their own practice and experienced the hardships of working alone, and are looking for the support of a franchise structure.
“We look for people with a zest for life – people who love food and enjoy working with people.”
“Having the two very different groups provides great peer-to-peer mentoring opportunities,” Jason says. Peter Fiasco also stresses the importance of creating a sense of belonging. While all the ingredients for growth are part of the success recipe, this is perhaps the keystone. “When you buy a Hairhouse Warehouse franchise,” Peter says, “you’ll work for yourself but you won’t be alone.”
88 Business Franchise Australia and New Zealand
There’s a lot of money in drugs.
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
We’ll you get it! motivation, a bithelp of hard work and our comprehensive 100-day training program, the ﬁnancial rewards will follow.
Workplace and pre-employment drug testing is exploding as a business in every state in Australia. Be quick ready to secure one of exclusive franchise in territories. With the right If you’re to jump onour board as a Franchisee our proven business motivation, a bit of hard work and our comprehensive 100-day training
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Take a video tour on our website Take a video tour on our website
Franchise Australia and New Zealand 89 Workplace and pre-employment drug testing is Business exploding as a business
e x pert a dv ice
YOU GET WHAT YOU PAY FOR
Picture this: you’ve spent months looking at various franchise opportunities, have spoken to your accountant, completed your due diligence, filled in the application form and are finally ready to become a franchisee. All that’s left is to sign the franchise agreement. Simple right? Not exactly. The franchise agreement and disclosure document are often hundreds of pages long. Under the Franchising Code of Conduct, franchise documents must contain certain information to help you make an informed decision about a franchise. Such information includes the history of the business, number of franchisees, initial and ongoing costs, intellectual property details and any
litigation as well as outlining the obligations of the franchisee and franchisor.
be negotiated. Don’t pay your local lawyer to learn franchising.
The volume of the franchise agreement and disclosure document can be overwhelming. This is exactly why the Franchising Code of Conduct prohibits a franchisee from signing a franchise agreement or paying a nonrefundable deposit until 14 days have passed from the date they received the documents.
Under the Franchising Code of Conduct you must either obtain legal advice or confirm that you have chosen not to. This is to protect you by making sure the franchisees are aware of the importance of having the documents reviewed by a lawyer given their length and content and the fact that you will have no comeback with the franchisor if you sign the agreement without legal advice.
Make sure you don’t leave the review til the last minute. You should begin reviewing the documents as soon as you receive them to ensure you take advantage of the time available to you. It is understood and expected that reviewing the franchise documents is a lengthy and time consuming process that needs to be done with care. Unfortunately, franchisees still enter into franchise agreements without obtaining legal advice or have the documents reviewed by a lawyer who specialises in franchising. Using a lawyer who is not familiar with franchising may waste time and money. Franchise lawyers know what to look for and are familiar with the terms and concepts of a franchise network. We know what is standard, what is of concern and what can
90 Business Franchise Australia and New Zealand
Buying a franchise is a big decision and may cost hundreds of thousands of dollars. You should not be making such a substantial financial investment without first having a skilled franchise lawyer review the franchise documents to ensure there are no onerous obligations that you will not be able to meet. You wouldn’t make a substantial investment such as buying a house without taking specialist legal advice and likewise, you shouldn’t enter into this franchise investment without first having a franchise lawyer review the documents. Ignorance is no defence. It is important to remember that even if you don’t understand the franchise agreement, you will still be bound by it.
“It is understood and expected that reviewing the franchise documents is a lengthy and time consuming process that needs to be done with care.” Christina Andrews | Lawyer DC Strategy
Written vs Oral advice Beware of law firms that offer to review your franchise documents within a few hours over the phone or via Skype. This is not sufficient time to comprehensively review the documents and may mean you will only receive advice on the terms specific to your franchise and not the terms and conditions relating to the entire franchise network. You should always obtain legal advice in writing to protect you should anything go wrong. Having written legal advice also allows you to go over the advice as often as you like to ensure you are making the right decision.
Things to consider A skilled franchise lawyer should not only give you detailed written advice about the franchise documents, they can also provide added value by asking questions to ensure you are entering into a commercially suitable deal. Such questions include: • Are you happy with the level of experience and knowledge of the franchisor and its directors as their expertise is essentially
what you are paying for? • Does the franchisor own the intellectual property? • Has the franchisor been involved in any litigation? If so, what was the nature and outcome? • Have you spoken to any franchisees in relation to training, support and costs? • How many franchisees have left the system and why? • Has your accountant looked at the figures in the disclosure document and other financial information which indicates the business is viable?
Negotiating your Franchise Agreement A comprehensive franchise review should not only highlight the obligations of both the franchisee and franchisor, but also provide insight and advice in relation to the commercial terms of the franchise agreement. For instance, a specialised franchise lawyer will be able to tell you whether the royalty, franchise fee or marketing levy is appropriate for that particular franchise.
Unlike general commercial lawyers, a specialised franchise lawyer will have the skills to recommend and draft any special conditions within the franchise agreement to get you a better commercial deal. Due to their exposure to franchise agreements on a daily basis, a specialised franchise lawyer can easily draft any required special conditions to ensure your best interests are met. A poorly drafted franchise agreement may not express your interests clearly and cause an entirely different result from what you had intended.
The new Franchising Code of Conduct The revised Franchising Code of Conduct came into effect on 1 January 2015. Some of the amendments to the Code include greater disclosure requirements by franchisors, a duty to act in good faith and stronger enforcement provisions. Franchisors can no longer require franchisees to undertake significant capital expenditure unless certain conditions are met and they cannot bring a dispute outside of the state the franchisee operates nor can they request that the franchisee pay their dispute costs.
Business Franchise Australia and New Zealand 91
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A specialised franchise lawyer should be across all the changes to the Code and can advise whether the documents you have been given are compliant with the new Code.
The importance of execution It may seem obvious to sign on the dotted line however in a significant number of cases, franchise agreements are not executed correctly. Too often a franchisee will not have a witness execute the document or only one director signs the franchise agreement on behalf of a company although section 127 of the Corporations Act 2001 requires either two directors or one director and a company secretary to execute the agreement. The proper execution of a franchise agreement is crucial to create a legally binding document. There is a risk that the franchise agreement may not be binding or enforceable if it has not been executed correctly in accordance with section 127.
Buying a business to obtain Permanent Residency You may be able to obtain permanent residency in Australia if you buy a business under the Business Innovation and
“The volume of the franchise agreement and disclosure document can be overwhelming.” Investment scheme. In order to obtain a visa, you will need to run and maintain the business successfully. As attractive as this can be to foreigners looking to settle in Australia, the need to have a competent lawyer review the franchise documents is crucial as they may be unfamiliar with Australia’s legal landscape. Remember, purchasing a business does not automatically grant you permanent residency. You must also successfully run the business. To do so, you will need to ensure the franchise you have invested in is profitable and that you will have enough capital to continue paying your royalty and other franchise fees, employ staff, purchase supplies and continue operating the business in accordance with the franchise agreement. You have a lot riding on this business investment and it is imperative that you receive specialist franchise legal advice.
Other services In addition to reviewing your franchise documents, a skilled franchise lawyer can
92 Business Franchise Australia and New Zealand
also advise you on effective ownership structures of your franchise entity; leases, subleases or occupancy licences; employment issues and eventually assist with the sale of your business. DC Strategy recommends that all prospective franchisees seek legal advice from a specialised franchise law firm. Christina Andrews is a lawyer in the law firm at DC Strategy who specialises in franchise documentation and franchisee reviews. She is also an experienced intellectual property lawyer. For over 30 years DC Strategy has been the region’s leading end-to-end franchise consulting, legal, recruitment and branding firm. Our multi-disciplinary team is committed to providing professional, practical advice and ongoing support to clients. Contact Christina on: P: 02 8220 8704 E: email@example.com
Business Franchise Australia & New Zealand is part of the global network of CGB Publishing
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headlines New Franchising Code compliance resources A video to explain the implications of the new Franchising Code of Conduct has been released on YouTube by the Australian Competition and Consumer Commission (ACCC).
Explanatory Statement can be downloaded here.: http://www.comlaw.gov.au/Details/ F2014L01472/Download
$23,000 bid for one bottle of McDonald’s Special Sauce
The ACCC has also now updated its franchising publications The Franchisee Manual and The Franchising Code of Conduct Compliance Manual to reflect the changes in the new Code.
For the first time since its introduction more than 40 years ago, McDonald’s is making its Special Sauce available for individual sale, and has even listed a limited-edition 500ml bottle of the sauce on Ebay which has attracted a high bid of more than $23,000.
The new Franchising Code of Conduct and
Australia is the first country to make the
sauce available, which is being sold in 25ml tubs for 50 cents in McDonald’s outlets, although a variety of listings by private sellers on Ebay are now selling the tubs for as much as $5 each. The proceeds of the sale of the limited edition “1 of 200” 500ml bottle will be donated to charity Ronald McDonald House. Within 24 hours of its Ebay listing, bids for the bottle reached $23,100, but remain unchanged at the time of publication.
Pie Face founder faces board revolt The founder of embattled food chain Pie Face, which emerged from administration at the start of this year, now faces a motion to remove him from the board of the revitalised company. Company founder Wayne Homschek will face an extraordinary general meeting on February 12 to pressure him to go after already refusing requests to resign from the board. Pie Face entered a deed of company arrangement in late December that will see creditors receive as little as 14 cents, and up to 19 cents in the dollar, however payments are not likely to commence until 2017. The company owed around $20 million to creditors, including $7 million to the Australian Taxation Office, when it was placed in administration.
Hungry Jacks fined $90,000 for boiling oil injury to worker Burger chain Hungry Jacks has been fined $90,000 in the South Australian Industrial Court after a young worker fell into a vat of boiling oil and suffered third degree burns to his arm and chest. The chain has since modified its procedures for filtering hot oil, but was criticised by
94 Business Franchise Australia and New Zealand
Jason Gehrke | Director Franchise Advisory Centre
the court for failing to call an ambulance for the injured worker, who was paid only $500 in compensation for the shifts he was unable to work during the three months of his recovery.
Dymocks withdraws from Hong Kong market Australian book retail chain Dymocks closed its flagship store in Hong Kong on January 25, alongside its local support office, and rebrands its five remaining stores as it withdraws from the Hong Kong market. The local office closed at the end of February. Dymocks has operated in Hong Kong for 15 year and is recognised as the largest seller of English-language books, but has suffered from declining sales.
Health groups lobby government for fat tax A tax on junk food and sugary drinks, similar to taxes on alcohol and tobacco, should be levied in Australia to combat the nation’s growing obesity problem according to several health groups.
of labour costs on business viability. The review will be conducted by the Productivity Commission and is scheduled to present its report in November 2015.
Former US labour board member blasts ruling of franchisor as joint employer A former member of the United States National Labour Relations Board (NLRB) has blasted a recent NLRB ruling that McDonald’s are joint employers of their franchisees’ staff. The ruling has sent shivers throughout the US franchise sector, where franchisors may now be at risk over the employment practices of their franchisees. However former board member Perter Kirsanow says that the ruling has been prompted by unions with dwindling membership among small businesses targetting franchise networks to rapidly expand their influence, with the impact of the ruling ultimately likely to cost jobs in franchises and small businesses across the US.
The Heart Foundation and others are lobbying the federal government to introduce a “fat” tax and a healthy star food labelling system to prevent the risk of Australian children not living as long as their parents, according to a media report. Such a tax would have significant implications for the fast food sector, which is heavily franchised.
Pizza customer earns $50k commissions in four months
Australian industrial relations review to examine penalty rates
The Domino’s Pizza Mogul campaign has enrolled 45,000 “moguls” in Australia, with several earning more than $20,000 in commissions. A recent media article has highlighted the success of Mr Curtis, a café brand area manager, who in his spare time promotes pizzas.
A sweeping review of the Australian industrial relations system will examine penalty rates, minimum wage levels, and workplace flexibility will provide business operators an opportunity to make submissions to government about the impact
A social media campaign that encourages customers to promote Domino’s Pizzas and topping combinations to their own networks, and which earns them commissions on each pizza sold in this manner, has earned one participant $50,000 in four months.
However, the mogul, who did not want his
full name used in the article may be a former Domino’s franchisee according to reader comments.
McDonald’s opens unbranded gourmet food café in Sydney McDonald’s has opened a food café in the Sydney suburb of Camperdown that features no loud red colours, no overt McDonald’s branding, and looks like a large gourmet dine-in kitchen with menu items ranging from Lebanese lentils to balsamic strawberry craft soda. This extraordinary gastronomic experiment from a brand better known as a fast food icon does not even sell traditional McDonald’s menu items such as a Quarter Pounder. The café operates next to the Royal Prince Alfred Hospital, and is considered by the brand as a food laboratory to test things McDonalds have never done before, according to a media report.
Man who ate needles in burger ordered to pay franchise’s legal costs A retired soldier who swallowed needles lodged in a burger he bought from a Burger King outlet on a US military base has been ordered to pay USD$8,500 to the fast food chain for missing a meeting to discuss a settlement in his legal case against the chain. A US District Court had ordered the settlement meeting to be held, however the plaintiff argued that he could not get time off work to attend, and believed that the fast food chain was not making a good faith effort to settle. Although the court ordered the former soldier to pay the chain’s legal costs for the settlement meeting, his lawyer confirmed that the legal action which first commenced in 2011, will continue.
Business Franchise Australia and New Zealand 95
PROFESSIONAL SERVICES LISTINGS h ot to pics
Ivan Poole Lawyers
6/64 Marine Parade (PO Box 10857) Southport QLD 4215 485 Papanui Road, Christchurch P +64 3 352 2293 F +64 3 352 2274 Contact Mark Sherry or Alan Prescott E firstname.lastname@example.org www.harmans.co.nz If you’re considering buying a franchise you need the legal confidence that the agreement is fair and ethical. Getting the right legal advice early is essential, and that’s where the knowledgeable Harmans team of franchising experts can help. Our extensive experience in all aspects of franchising, across a wide range of industries, will provide you with the advice you need to more forward with confidence. We have acted for franchisors and franchisees over many years and know the advantages of franchising and pitfalls to watch out for.
P 07 5591 2522 F 07 5591 2511 Peter Thelwell - email@example.com Ivan Poole - firstname.lastname@example.org Sam Rees - email@example.com www.ivanpoolelawyers.com.au Ivan Poole Lawyers has specialised in franchising for over 25 years and also provides expertise in Licensing and Intellectual Property. Acting for over 50 national franchise systems and a number of Licence Systems both in Australia and overseas, Ivan Poole Lawyers develops long-term relationships with franchisors and takes pride in helping them achieve success.
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Level 1, 137 The Parade, Norwood SA 5067 Ph: 08 8304 8600 Fax: 08 8332 8389 Email: email@example.com Website: www.fastapasta.com.au
FASTWAY COURIERS AUS
Level 9, 491 Kent Street, Sydney NSW 2000 Ph: 1300 FASTWAY Fax: 02 9264 4966 Email: firstname.lastname@example.org Website: www.fastway.com.au
FASTWAY COURIERS NZ
Shed 5, Level 1, Lever Street, Ahuriri, Napier 4110 Ph: 0800 4 FASTWAY Website: www. fastway.co.nz
4/68 Jessica Blvd, Minyama QLD 4575 Ph: 1300 783 658 Fax: 07 5444 6916 Email: email@example.com Website: www.frogrent.com.au
81 Gozzard St, Gungahlin ACT 2913 Ph: 02 6280 4987 Email: firstname.lastname@example.org Website: www.goldsaustralia.com.au
Level 1, 605 Doncaster Road, Doncaster VIC 3108 Ph: 03 9234 2200 Fax: 03 9234 2266 Email: email@example.com Website: www.hhwhfranchising.com.au
6/12 Tonga Place Parkwood QLD 4214 Ph: 07 5574 4908 Fax: 07 5574 6528 Email: firstname.lastname@example.org Website: www.hydrokleen.com.au
Unit 1/26 Flinders Parade, North Lakes QLD 4509 Ph: 0418 600 919 Fax: 1300 030 066 Email: email@example.com Website: www.inxpress.com.au
NATURE OF BUSINESS
ELECTRICAL TEST AND TAG
$47,000 + GST + Vehicle
RETAIL OF BATTERIES AND PORTABLE POWER ACCESSORIES
$49,900 + GST
$250,000 + GST
BOUTIQUE CARVERY FRANCHISE
Franchise Council of Australia
$60,000 + gst Incl. Training
MOBILE COFFEE VANS
Over 200 worldwide
FCA, FANZ, IFA
INITIAL FEE INCLUDED IN PURCHASE PRICE
MOBILE DOG WASH
Franchise Council of Australia
STRATA CLEANING, GARDENING MAINTENANCE SERVICE
$40,000 - $60,000
$40,000 - $60,000
PREMIUM CAFÉ FRANCHISE
Franchise Council of Australia
$50,000 + GST Incl. Training
Dependent on Site conditions $300k$500K
$60,000 + GST
KITCHEN, BATHROOM & BEDROOM REMODELLING
FCA & FANZ
DAY SPA FRANCHISER
AUTHENTIC ITALIAN FAMILY FOOD FRANCHISE
Franchise Council of Australia
$50,000 + GST
FCA & FANZ
FCA & FANZ
RESIDENTIAL PROPERTY MANAGEMENT
$35,000 (GST inc)
24 HOUR FITNESS AND HEALTH
HAIR & BEAUTY – RETAIL & SERVICE
$66,000 plus GST
$390,000 incl. stock, for Greenfield sites
AIR CONDITIONING CLEANING & SERVICING
FCA, Greenbiz, National Asthma Council Aus, QHA
COMPETITIVE GLOBAL EXPRESS FREIGHT FRANCHISE
250+ franchises across 15 countries
$20,000 + GST
$110,000 + GST
180 across Australia & New Zealand
$80K - $200K
EYELASH EXTENSIONS, THREADING & MORE
JUMP! SWIM SCHOOLS
6/52-56 Paradise Avenue, Miami QLD 4558 Ph: 0477 800 181 Email: firstname.lastname@example.org Website: www.jumpswimschools.com.au
Level 1, 4-6 Kingsway, Cronulla NSW 2230 Ph: 0439 130 499 Fax: AUS 02 9527 5144 Email: email@example.com Website: justcuts.com
PO Box 592, Warners Bay NSW 2282 Ph: 0414 491 977 Email: firstname.lastname@example.org Website: www.justlashes.com.au/franchises
LOCAL APPLIANCE RENTALS SOUTHERN GROUP
807, 1 Queens Rd, Melbourne VIC 3004 Ph: 1800 980 650 Fax: 07 3396 8311 Email: email@example.com Website: www.localappliancerentals.com.au
98 Business Franchise Australia and New Zealand
FRANCHISE LUXAFLEX® Window Fashions Gallery
338 Victoria Road, Rydalmere NSW 2116 Ph: 02 9638 8000 Fax: 02 9638 8832 Email: firstname.lastname@example.org Website: www.luxaflex.com.au
5 Henry Street, Loganholme QLD 4129 Ph: 07 3175 0640 Fax: 07 3423 0600 Email: email@example.com Website: www.primalpantry.com.au
RENT THE ROO
PO Box 2150, Howrah LPO TAS 7018 Ph: 03 6247 3826 Fax: 03 6247 3853 Email: firstname.lastname@example.org Website: www.renttheroo.com.au
5-11 Jardine Drive, Redlands Business Park, Redland Bay QLD 4165 Ph: 07 3829 1993 or 1300 794 499 Fax: 07 3829 1283 Email: email@example.com Website: www.scrooz.com.au
SEVEN SEAS SEAFOOD CAFÉ
5 Henry Street, Loganholme QLD 4129 Ph: 07 3175 0640 Fax: 07 3423 0600 Email: firstname.lastname@example.org Website: www.aktivbrands.com
3 May Terrace Brooklyn Park SA 5032 Ph: 08 8354 4996 Email: email@example.com Website: www.sherpa-kids.com.au
SKEWERZ KEBABZ 5 Henry Street, Loganholme QLD 4129 Ph: 07 3175 0640
Fax: 07 3423 0600 Email: firstname.lastname@example.org Website: www.skewerz.net.au
SNOOZE SLEEP WELL PTY LTD
21a Shierlaw Avenue, Canterbury VIC 3126 Ph: 0427 401169 Fax: 03 9888 6327 Email: email@example.com Website: www.snooze.com.au
SPRAY PAVE AUSTRALIA GPO
Box 501, Green Acres SA 5086 Ph: 1800 688 888 Fax: 08 8266 5360 Email: firstname.lastname@example.org Website: www.spraypave.com
TACO BILL MEXICAN RESTAURANTS
375 Clarendon St, South Melbourne VIC 3205 Ph: 03 9690 2077 Fax: 03 9696 0868 Email: email@example.com Website: www.tacobill.com.au
THE DRUG DETECTION AGENCY PTY LTD
PO Box 301678, Albany, North Shore City 0752 NZ Ph: +64 9 479 4332 Email: firstname.lastname@example.org Website: www.tdda.com
THE INTERFACE FINANCIAL GROUP
Level 19, 1 O’Connell St, Sydney, NSW 2000 Ph: 1300 940 908 Email: email@example.com Website: www.interfacefinancial.com.au
THEXTON ARMSTRONG AUSTRALIA & NZ
Ph: 1300 908 812 Email: firstname.lastname@example.org Website: www.thextonarmstrong.com.au/presentation
THE LEATHER DOCTOR
2/52 Export Drive, Molendinar QLD 4214 Ph: 1300 453 284 Email: email@example.com Website: www.myleatherdoctor.com.au
V.I.P. HOME SERVICES AUSTRALIA
Offices in each State Ph: 13 26 13 Fax: 08 8220 4588 Email: firstname.lastname@example.org Website: www.vipfranchisesales.com.au
XPRESSO MOBILE CAFÉ
35 Railway Terrace, Milton QLD 4064 Ph: 1300 655 559 Fax: 1300 655 569 Email: email@example.com Website: www.xpresso.com.au
YELLOW EXPRESS PTY LTD
57 Victoria Rd, Rozelle NSW 2039 Ph: 1300 935 569 Fax: 02 9810 0111 Email: firstname.lastname@example.org Website: www.yellowexpress.com.au
51B/2 Slough Avenue Silverwater NSW 2128 Ph: 1300 709 709 Website: www.yogurtlandaustralia.com.au
NATURE OF BUSINESS
WINDOW COVERINGS RETAIL SHOWROOM
$90,000 - $120,000
HEALTHY EATING CAFÉ
$60,000 + gst
FURNITURE AND APPLIANCE RENTALS
FIXINGS AND FASTENER TRADE SALES
$350,000 Incl. stock
MODERN SEAFOOD CAFÉ
Franchise Council of Australia
$60,000 + gst
MANAGEMENT FRANCHISE IN CHILDCARE
FCA, IFA, ACECQA
$35,000 including $3.500 training fee
$35,000 plus GST
MEDITERRANEAN FAST FOOD CONCEPT
Franchise Council of Australia
$60,000 + gst
Franchise Council of Australia
SAFETY & DECORATING TO ALL INSIDE & OUTSIDE CONCRETE
$15,000 (Licence Only)
MEXICAN RESTAURANT, BAR AND TAKEAWAY
Restaurant Catering Victoria
DRUG TESTING & EDUCATIONAL SERVICES
+ mobile testing unit
PROVIDES UNIQUE SPOT FACTORING PROGRAMME
FCA, IFA, CFA, Irish FA
MOBILE LEATHER & VINYL REPAIRS
Starting from $45,000 + GST
$60,000 + GST
DOMESTIC AND COMMERCIAL CLEANING, GARDENING FRANCHISORS
$16,000 + GST
DI BELLA COFFEE MOBILE ESPRESSO VAN
Included in turnkey purchase price
$119,500+GST (incl. FAST TRACK program) Turnkey business
COURIER, DELIVERY, FREIGHT, REMOVALS, RELOCATIONS
Less than $50,000
FROZEN YOGURT STORES
A-Z Listings are a great way to promote your business For more information call 03 9787 8077 (or +61 3 9787 8077 from outside of Australia) and speak to one of our Sales Executives or go to www.businessfranchiseaustralia.com.au Business Franchise Australia and New Zealand 99
A-Z FRANCHISE DIRECTORY APPLIANCE TAGGING SERVICES Looking for a franchise with on-going repeat business, large territories and access to an existing client base to get you started? With over 12 years’ experience, ATS are Australiawide 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 franchisees grow profitable and successful businesses.
BATTERY WORLD AUSTRALIA Count the number of households in Australia? (Currently 9,117,033 private households in Australia - 2011 Census Data). Now count how many batteries each household will need over the next year? That’s the potential of a Battery World Franchise. Offering a world of batteries for everyone, the Battery World network is national and sells a range of portable power products and accessories throughout Australia. Battery World Australia Pty Ltd, as franchisor, provides
Brazilian Butterfly Australia With more than 10 years’ experience and franchised salons right across Australia, Brazilian Butterfly are the total body care experts for men and women. From standard and specialty waxing, to the latest in laser hair removal, spray tan applications, and exclusive skin care products – Brazilian Butterfly are arguably one of Australia’s largest and most successful beauty salon franchise groups.
BUCKING BULL Bucking Bull is Australia’s largest and most successful carvery franchise with nearly 40 store locations around the country. Australian owned and operated, Bucking Bull first opened in Perth in 1999 and has since expanded throughout Queensland, New South Wales and most recently, Victoria. Bucking Bull has built its success on a very simple recipe- providing great value ‘home cooked’ style food that people love to eat, serving nearly 3 million customers each year. Bucking Bull commands
CAFE2U Cafe2U is Australia’s first and most successful mobile café system. With over 200 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.
100 Business Franchise Australia and New Zealand
No prior electrical experience is required, just a passion for safety and a commitment to growing your business. With low entry fees, minimal franchisee administration, and average returns between $1,000 and $3,000 per week an ATS franchise may be just the opportunity for you. ATS were named the FCA National Franchisee of the Year 2013 (less than 2 staff). For further information please contact Steve Wren, National Sales Manager on 1300 287 669, email email@example.com or visit www.appliancetaggingservices.com.au
the marketing and operations support to assist franchisees and strong brand recognition. Battery World is committed to helping franchisees build a successful business supported by experienced support office professionals. 82 stores Australia-wide and growing! After 15 years of operation, Battery World continues to be one of Australia’s most powerful retail battery franchises. For more information about Battery World contact 07 3373 1764 or visit www.batteryworld.com.au/ franchising
The immediate expansion plans have progressed significantly, where the best franchised locations have been sought and now they need the best franchisees. If you are serious about partnering in a business where you will be rewarded quickly both personally and financially, then you need to take action now! Please contact Adam Simon, General Manager (03) 9456 5700 or 0413 837 737 firstname.lastname@example.org
strong brand awareness, a unique positioning and a proven business model. As part of the Aktiv Brands portfolio, Bucking Bull franchisees benefit from comprehensive training, detailed operational procedures and marketing tools and assistance to assist in reaching their business goals. For more information regarding Bucking Bull franchise opportunities, please contact Dean Vella: P: 07 3175 0640 E: email@example.com W: www.buckingbull.net
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. Contact John Stanton - Sales and Franchising Manager on 1300 Cafe2U (1300 223 328) or email: firstname.lastname@example.org www.cafe2u.com
City Farmers Dogwash Beginning more than 20 years ago as a small enterprise, City Farmers Dogwash is now part of the City Farmers Group. City Farmers comprises 42 specialty large format pet stores throughout Australia with many more planned, a mobile network of over 30 City Farmers Dogwash vans as well as pet insurance business and an online store. Our Franchisees love what they do and are so passionate about the part they play in a dogs’ health and wellbeing. But with more than 3.7 million pet dogs in
Australia, we’ve got plenty of work to do and are always looking for Franchisees with big smiles and big hearts to come on board and enjoy the ride. • No experience necessary • Full training & support • Strong brand recognition • Exclusive Marketing Zone • All-inclusive start-up package • Work outdoors & be your own boss For more information call Scott McIntosh on 08 9345 7200 or visit www.cityfarmers.com.au/dogwash.
clean green strata Strata Cleaning and Strata Garden Maintenance Franchises
• No weekend or night work so more time with the
Why Clean Green Strata?
• Fully supported by energetic, experienced
• We supply the customers from the 1st minute you start • Earn a guaranteed income with work scheduled year round to suit your situation • Work flexible hours to suit your life
Crema Espresso The Crema Espresso coffee franchise provides premium coffee and light meals with a focus on personalised service. Established on the Gold Coast, Crema brings together community life with a bright sophisticated shop design. Our extensive training and systems are in place to ensure the best support for Franchisees. Crema Espresso provides a business with supervision and consulting readily available. This includes everything from full operation manuals, point
DOMINO’S Domino’s Pizza Enterprises is the master franchisor for the Domino’s Pizza brand in Australia, New Zealand, France, Belgium, The Netherlands and Japan. Across these markets, DPE franchisees currently operate over 1400 stores and sell over 90 million pizzas annually. New franchises are supported through every
business franchise australia and new zealand A-Z Listings are a great way to promote your business, giving you a presence within our publication and also the Business Franchise website.
family management team • Recession proof industry • Earn above average returns for the cleaning & gardening industry
of sale terminal, uniform package, store design & fit out together with ongoing research and development supported through marketing and advertising. “As coffee lovers we were tired of the same old coffee in dark gloomy cafes. Premium coffee and light meals, like we have in our stores, should be enjoyed in a bright sophisticated café with an atmosphere that creates a laid back, enjoyable meeting place for customers”. Contact: email@example.com www.cremaespresso.com.au
step of the process including site selection, lease negotiation, store fit out, comprehensive preopening training, coordination of suppliers, group purchasing power, store appraisals, ongoing training and support, and marketing promotions. Australia: www.dominosfranchise.com.au or call the Franchising Team on 1300 131 888 New Zealand: www.dominospizza.co.nz or call the Franchising Team on 0508 4Franchise
For more information call 03 9787 8077 (or +61 3 9787 8077 from outside of Australia) and speak to one of our Sales Executives or go to www.businessfranchiseaustralia.com.au or www.businessfranchisenz.co.nz
AUSTRALIA AND NEW ZEALAND
Business Franchise Australia and New Zealand 101
A-Z FRANCHISE DIRECTORY DREAM DOORS Dream Doors is a kitchen, bathroom and bedroom remodeling business that has a proven track record internationally. Established in 2000 in the UK, Dream Doors takes the hassle, and the cost, out of remodeling outdated home interiors. Now with 50+ locations in the UK, 10 in New Zealand since 2009 and now with 7 locations in Australia, we are looking to expand our network of Franchisees throughout Australia.
Dream Doors is looking for people with managerial, organizational/communication skills or real go-getters, no formal kitchen design experience is necessary – as long as you have the drive, ambition and enthusiasm to succeed in business we will supply you with the internationally proven and tested formula of the Dream Doors business model. For more information contact Derek Lilly on: T: 1 800 373263 E: firstname.lastname@example.org W: www.dreamdoorskitchens.com
ENDOTA SPA The first endota spa was opened by friends Belinda Fraser and Melanie Gleeson on Melbourne’s Mornington Peninsula in 2000.
There are now fresh, understates endota day spas in almost every Australian state and territory.
Endota spa is the fresh, soothing, all-Australian day spa brand. Flawless walls, timber benches and essential oils meandering on the air.
Please contact Emma Stewart on 0434 771 741 for new opportunities.
opportunity to be part of our winning national organisation.
With our authentic Italian background and 30 year success story, Fasta Pasta is now Australia’s largest, independently owned group of ‘fresh pasta’ Italian restaurants. An innovative ever-changing menu, with healthy options and a commitment to outstanding service, have all contributed to Fasta Pasta being voted Roy Morgan’s ‘Quick Service Restaurant of the Year’ in 2012. Loved for our affordable, fresh, family meals in relaxed fully licensed surroundings, this is a great
business franchise australia and new zealand AUSTRALIA AND NEW ZEALAND
A-Z Listings are a great way to promote your business, giving you a presence within our publication and also the Business Franchise website.
FASTWAY COURIERS AUSTRALIA
Extensive initial training and ongoing support is provided. New franchisees undergo 12 weeks training in one of our company restaurants covering areas such as, front of house, kitchen (all areas), necessary bookwork, PPS, and Management skills. For more information on joining a successful franchise call 08 8304 8600, email email@example.com, or visit our website, www.fastapasta.com.au
For more information call 03 9787 8077 (or +61 3 9787 8077 from outside of Australia) and speak to one of our Sales Executives or go to www.businessfranchiseaustralia.com.au or www.businessfranchisenz.co.nz
• Low start up costs
• Ongoing business support and training • Exclusive territories • A perpetual franchise agreement with no ongoing fees No prior business experience is needed, just a great attitude and an ability to talk to people. So, if you’re ready for a positive change, we’d love to hear from you. Call 1300 FASTWAY or visit us at www.fastway.com.au
• No weekend work
Run your own rewarding business and take control of your future as a Fastway Courier Franchisee. As a market leader in nationwide courier services, our multi-award winning franchisees enjoy • Guaranteed income package*
102 Business Franchise Australia and New Zealand
FASTWAY COURIERS New Zealand Run your own rewarding business and take control of your future as a Fastway Couriers Franchisee. As a market leader in nationwide courier services, our multi-award winning franchisees enjoy: • Guaranteed income packages* • Low start up costs • No weekend work
FROG RENT Frog Rent take managing residential property seriously. Serious enough, that it’s all that we do. Frog Rent is unique in that we are a Property Management franchise. We do not sell property, but specialise in managing property for owners of residential real estate. Frog Rent was founded by two successful builders with franchise operations in Australia and overseas, two property investors and a real estate agent. All five have long and successful business careers, with
Gold’s Gym The substantial difference at Gold’s Gym is the blend of industry leading quality, value and sustainability. The business model we offer provides a structured, calculated and tested blueprint to success. All components will be provided to achieve a harmonic balance between work and living, all the while feeding your passion for the industry. Franchise owners have the ability to leverage off the most recognised and reputable names in the industry, at an affordable price. Sustainability and perseverance are proven through
• Ongoing business support and training • Exclusive territories • A perpetual franchise agreement with no ongoing fees No prior business experience is needed, just a great attitude and an ability to talk to people. So, if you’re ready for a positive change we’d love to hear from you. Call 0800 4FASTWAY, or visit us at www.fastway.co.nz *Conditions apply
four of the five having established and run successful national and international franchise systems. Frog Rent recruit franchisees, based on their personal qualities and abilities. We have the software, processes, skills, manuals, materials and extensive and ongoing training in place, so we believe we can teach and oversee excellence, with the recruitment of the right people. For more information please email firstname.lastname@example.org or phone 1300 783 658 or visit www.frogrent.com.au
the history of the brand over the years all the while the Gold’s Australia support team will be behind you every step of the journey, enriching your business venture with knowledge and experience. Gold’s offers you the opportunity to feed your passion, join a team of passionate entrepreneurs, all the while creating wealth and success. Become a part of fitness prestige, take your piece of Gold. Contact Scotty (0400 500 755) or Christos (0422 500 002) to commence the application process. http://www.goldsaustralia.com.au https://www.facebook.com/goldsgymaustralia
Hairhouse Warehouse has become a household
Hairhouse Warehouse, Australia’s leading hair & beauty brand, has huge plans for the next few years to expand with 20 new stores planned to be opened around the country.
name in Australia, with a proven business model
We are looking for passionate people who want to own their own business, work for themselves and take control of their own destiny.
HydroKleen Australia HydroKleen Australia is a national company that provides, through a ‘man-in-a-van’ model, a unique and innovative award-winning split system air conditioning cleaning service proven to: • Eliminate a range of contaminants • Significantly improve air quality • Reduce power consumption. Our franchisees are backed by proven processes, customised equipment, effective national marketing
that continues to evolve and generate strong returns for franchisees. For more information call 03 9234 2200, email email@example.com or visit www.hhwhfranchising.com.au.
and media support and a trademarked cleaning process developed through many years of research and development. HydroKleen technicians do NOT need to be licensed, other than completing our HydroKleen training course. There are a number of different HydroKleen Franchise models to allow good return on investment in different areas. Please feel free to discuss these models with us either by phone: 07 5574 4908 or by email firstname.lastname@example.org
Business Franchise Australia and New Zealand 103
A-Z FRANCHISE DIRECTORY InXpress – Global Express Freight InXpress provides a revolutionary yet simple concept delivering customers with 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 customers with greater value and personalised service, saving valuable time and money. Operating in 15 countries with over 250 franchisees internationally, InXpress is now accepting applications to grow the Australian business.
Jump! Swim schools
Benefits to franchisees include: • Low entry costs • Low risk • No inventory/warehousing • Minimal employee base • High income potential • Ongoing training and support Whatever your location InXpress represents a unique opportunity for you to build financial freedom, within a global network. Start building your future with the right company and the right model, for more information about becoming an InXpress franchisee within your region call 0418 600 919, email email@example.com, www.inxpress.com.au
JUMP! Swim Schools is leading the way in bringing fun, private facilities for our little swimmers to learn the basics away from the busy aquatic centres If you are looking for a flexible lifestyle franchise, in a secure and established industry, with huge market opportunities then this is the franchise for you. Absolutely no experience necessary, and no need to be in the water! Great locations are still available, no experience necessary and a comprehensive training program provided.
Due to the bookings in advance system, the business is easy to manage as well as consistent ongoing support with our proven management systems. To find out more information on a JUMP! Swim Schools Franchise contact Amy Hempstead on: Phone: 0477 800 181 Email: firstname.lastname@example.org www.jumpswimschools.com.au www.jumpfranchising.com.au
Just Cuts™ are also excited to announce our NEW kiosk option! With only 49 sites available Australia wide, buy yourself a new lifestyle from $85,000!
Join the largest hairdressing network in the Southern Hemisphere! Just Cuts™ offers a fixed franchising fee, with flexible finance options and ongoing business coaching and support. Did you know that most Just Cuts™ Franchise Owners are not hairdressers and on average own 2.3 salons each! Why? Because proven systems, support and training means your Stylists become the technicians and easily run the business for you.
Just Lashes The leaders and only Franchise in Eyelash Extensions in Australia. Clients making an appointment at a Just Lashes lounge expect consistent, professional service and rely on our reputation for delivering the most beautiful results. We help you become an administrator of this truly profitable business ethic! It’s not just the superior workmanship that Just Lashes has mastered, but our exclusive premium products that are manufactured just for us. With the support and encouragement of the Just Lashes
local appliance rentals Local Appliance Rentals are the largest rentals franchise in Australia today. Since franchising five years ago, there are now more than 100 franchisees in Australia, New Zealand and the United Kingdom. With a wide range of products including TVs, computers, game consoles, home entertainment systems, stereos, coffee tables, dining tables, fridges, freezers, microwaves, washers, dryers, air conditioners, beds, baby furniture, BBQs,
104 Business Franchise Australia and New Zealand
Just Cuts™ Franchisees have exclusive access to our professional retail range made in Europe; JUSTICE Professional™! Contact: Luke Manning 0439 130 499 or luke@ justcuts.com Website: justcuts.com
turnkey system, you don’t need any formal business experience as our Business Coach will guide you, or prior education in Beauty Therapy as our Lash Expert will train you the right way. We provide everything you’ll need to run this highly flexible, uncomplicated enterprise. Rely on the ongoing professional support supplied by the Just Lashes network and experience the benefits of a rewarding working lifestyle! e: email@example.com m: 0414 491977 w: www.justlashes.com.au/franchises
outdoor furniture, fitness equipment and kids’ play equipment, Local Appliance Rentals helps their customers get what they want. As a home based franchise, Local Appliance Rentals is ideally suited for people looking for that elusive work/life balance. The only requirement is a basic home office and funds available to purchase the rental goods on behalf of the customers. Don’t miss out on your opportunity to join the largest rental franchise company in Australia, visit www.localappliancerentals.com.au/franchising
luxaflex® Window fashions Join the Luxaflex Dealer Network There are over eight million households in Australia – think about how many window furnishings that amounts to! The LUXAFLEX® Window Fashions brand is one of the most widely known and respected window furnishing brands in Australia, having sold its products under the Hunter Douglas Group in Australia for over sixty years – and is currently recruiting entrepreneurs looking for a new venture! Hunter Douglas offers an unrivalled partnership to meet
PRIMAL PANTRY Primal Pantry is a new healthy eating café concept based on the Paleo lifestyle and way of eating. Since opening the pilot store in Brisbane in 2013, Primal Pantry has become a phenomenon, gathering a loyal and passionate fan following. Ranked in Brisbane’s Top Ten Favorite Restaurants, Primal Pantry is fast becoming the undisputed leader in Paleo fare in the marketplace. Following increasing demand for additional outlets, Primal Pantry have thrown open their doors with
RENT THE ROO RENTALS Rent The Roo specialise in the rental of any household appliance or furniture product available. There is simply NO LIMIT to the development of product ranges on offer from Rent The Roo, because franchisees can purchase from any retail outlet or accessible supplier – giving us the flexibility to satisfy every customer enquiry. If we can find it, you can rent it…! With 39 years of trade and development and our continued focus on customer satisfaction, Rent The
scrooz We’re Australia’s biggest online and multi-channel retailer of premium range fasteners, fixings and consumables for tradesmen, light industry and serious DIY’ers and we’re revolutionising fastener retail. We’re growing rapidly and to meet the high customer demand for our products we’re starting the launch and roll-out our network of Scrooz® Trade Centres across Australia right now. Want to earn some real money and get involved in
SEVEN SEAS SEAFOOD CAFE Seven Seas Seafood Café is a re-invigoration of the classic Aussie Takeaway Shop with a whole lot more style, sophistication and value. Seven Seas offers a casual dining experience that meets the continually shifting tastes and rising expectations of today’s consumers, serving a refreshing and modern selection of seafood with a contemporary flair. Seven Seas is 100% Australian owned and
specific business needs, under our LUXAFLEX® Window Fashions Gallery and LUXAFLEX® Window Fashions Showcase Alliance programs. This includes marketing support, manufacture and production of all products and fabrics, as well as local on the ground sales support. No experience is required to enter the Programs as all training is provided, which focuses on enhancing the customer experience and increasing your profitability. For more information on our programs, contact National Sales Manager, Mark Futeran on 02 9638 8000 or firstname.lastname@example.org
the brand’s first franchised stores opening in 2014. Backed by the award-winning Aktiv Brands franchise system, all aspects of the Primal Pantry business and operation are supported by the category leading marketing, training and operational systems that Aktiv Brands provides. If you are genuinely passionate about the positive difference that clean-eating can make, then please contact Dean Vella: P: 07 3175 0640 E: email@example.com W: www.primalpantry.com.au
Roo continue to grow with over 60 franchise territories covering every state & territory in Australia. Franchisees have access to ongoing training and support as well as an extensive range of marketing tools to help drive the business forward. Rent The Roo’s home-based, simple and productive business model combines low running costs with the highest possible returns. For further information, visit the FRANCHISE tab at www. renttheroo.com.au or contact Grant Garraway at The Franchise Shop on 1300 139 557 or email firstname.lastname@example.org
• A $650 billion dollar industry • With highly profitable repeat sales of consumables to the trades and DIY industries • Retailing our premium quality Scrooz® branded product range • With National and webstore driven multi-channel sales • Full training and on-going support provided • Outstanding opportunities for early take up We have limited opportunities for highly motivated people looking for a serious business, so to find out more contact us now for an information pack at email@example.com
scrooz f a s t e n e r s
operated and benefits from the award winning franchise support at Aktiv Brands. As a Seven Seas franchisee, you can enjoy the advantages of being associated with a well-known and successful franchise group, supplying you with the tools to help your business grow and prosper. For more information about Seven Seas franchise opportunities, please contact Dean Vella: P: 07 3175 0640 E: firstname.lastname@example.org W: www.aktivbrands.com
Business Franchise Australia and New Zealand 105
A-Z FRANCHISE DIRECTORY Sherpa Kids A Management Franchise operating in the childcare industry. An international company operating in over 150 schools supported by over 100 franchisees servicing over 2500 families sold in 17 countries. An out of school hours care business, comprises after school, before school and holiday care. The services are managed by franchisees who employ staff to directly operate on school properties. Services are staffed by qualified personnel. Each franchisee may operate
SKEWERZ KABABZ Skewerz Kebabz is an exciting and innovative retail fast food concept offering authentic Mediterranean cuisine combined with fresh and exciting flavour profiles for the Australian market. Spicing up food courts in shopping centres around Australia, Skewerz is becoming the nation’s fastest growing kebab franchise. Providing an exciting alternative to the traditional kebab, Skewerz serves up a truly satisfying menu supported by a friendly and fun casual dining environment. The unique menu caters for all three primary trading periods and has
business franchise australia and new zealand AUSTRALIA AND NEW ZEALAND
A-Z Listings re a great way to promote your business, giving you a presence within our publication and also the Business Franchise website.
multiple, closely located and similar profiled schools. Sherpa Kids are looking for individuals who have the capability to develop, manage a territory. The individual(s) will need a background in relationship building and a resume of work history that supports working with people in a team environment. This is a people business, the most successful partners care about helping others achieve success. Be a good communicator, confident to grow a business and willing to build relationships and be people focussed. Contact email@example.com www.sherpa-kids.com.au
been strategically designed to ensure the concept will thrive in the competitive food court environment. Skewerz Kebabz is part of the Aktiv Brands group of franchise brands, which means that the model has been developed based on years of experience in the retail fast food franchising sector. For more information regarding Skewerz Kebabz franchise opportunities, please contact Dean Vella: P: 07 3175 0640 E: firstname.lastname@example.org W: www.skewerz.net
For more information call 03 9787 8077 (or +61 3 9787 8077 from outside of Australia) and speak to one of our Sales Executives or go to www.businessfranchiseaustralia.com.au or www.businessfranchisenz.co.nz
• NAB & ANZ accreditation
As one of Australia’s longest-running, most successful and innovative franchised business, Snooze’s experience in the bedding industry is second to none.
• Sales and product training
With over 70 stores nationwide and a commitment to continued growth and development, Snooze offers great return on investment.
• Business management support • A national marketing program • IT services
Snoozes offers a personable, flexible business solution with expertise and support every step of the way, including:
To take the first step towards a prosperous future, contact Snooze Franchise Network Development Manager, Alistair Browne, to find out what Snooze could mean for you.
• Vendor finance assistance
SPRAY PAVE AUSTRALIA Pty Ltd
• Learn a range of new lifelong trades.
Earn up to $3,300 per week. That’s right, up to $170,000 per year! Our service decorates concrete. We Spray Pave, Polish, Epoxy and Stain. Jobs are inside and outside. Customers are domestic, commercial and Government. Our license structure allows you to choose when, where and how you want to work! This is a sincere “Be Your Own Boss” system. You genuinely keep all the profits!
106 Business Franchise Australia and New Zealand
• Guaranteed work available anytime after training. • Head office training plus follow-up on your own job. • Customers contract and interest free finance. • Lifelong support from 6 Head Office trainers. • From $7,000 deposit + Support Payment Plan. Established in 1991, Security with Australia’s largest and oldest network. The name of the industry. Phone or email now, for a FREE information pack: FREE CALL 1800 688 888 Website: www.spraypave.com
Taco Bill Taco Bill is the longest established Mexican family restaurant in Australia and has built a loyal following since its inception in 1967. Taco Bill’s Mexican food is fun, fresh and affordable and presented in a casual, relaxed environment. The menu consists of a variety of fresh, authentic Mexican cuisine cooked daily on site, including Taco Bill’s special salsas, quesadillas, fajitas, rice and frijoles, enchiladas, burritos, nachos and tacos. Thirty brands of tequila are on offer at the various
restaurants as well as Australia’s largest Margarita – Pancho Villa (fishbowl) - giving the restaurant even more flavour and authenticity! With 35 Taco Bill restaurants in Australia and 28 franchisees, Taco Bill Directors Tom Kartel and Stan Teschke are keen to increase Taco Bill’s Mexican wave with expansion plans nationally in metro and regional areas. If you’re interested in becoming part of the Taco Bill family call 9690 2077 or email email@example.com
The Drug Detection Agency (TDDA)
training program; Australasia wide business networks; State Office support and large-scale clients that need services in your area.
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.
TDDA wants highly motivated and business oriented individuals to join the team to share in the success of this proven business model.
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.
If you are seeking a next generation business opportunity with huge potential then contact us now to find out more. Phone: +61 439 222 422 (AUS) / +64 21 917 148 (NZ) Contact: Glenn Dobson Email: firstname.lastname@example.org
You will also benefit from a comprehensive 100 day
THE INTERFACE FINANCIAL GROUP - IFG 50/50
small business, and employs its franchise network in Australia, New Zealand, Canada, the Republic of Ireland, Singapore, the United Kingdom, the United States, Mexico and South Africa. The new IFG 50/50 franchise offers the opportunity to get started quickly and with a more modest capital base. Why? Because we syndicate all transactions with our franchisees 50/50. Franchisees do the ‘people work’ - we do the ‘paperwork’ – a great combination to achieve an aboveaverage return. For more information: email@example.com www.interfacefinancial.com.au
The Interface Financial Group franchisees provide shortterm working capital for small businesses by purchasing their invoices at a discount. In the current economic climate small businesses need working capital but banks are unwilling or unable to provide it. Many of these small businesses are turning to Interface for a solution. Interface has been in the ‘invoice discounting’ business since 1972, is the leading alternative funding source for
Thexton Armstrong Become a Thexton Armstrong Business Success Partner! At Thexton Armstrong we are passionate about Business and helping Business Owners. With over 70 Franchisees and growing rapidly across Australia and NZ we believe that we have the No1 Business Consulting System in Australasia. We are looking for people with previous business or corporate experience to join our team. A Thexton Armstrong Business Success Partner works long term with Business Owners to help improve the profit, growth and value of their business.
business franchise australia and new zealand A-Z Listings re a great way to promote your business, giving you a presence within our publication and also the Business Franchise website.
Our Business Success Programme is designed to offer high end consulting services to small to medium sized businesses. The consulting industry is growing rapidly as most Business Owners do not have the skills to manage or grow their businesses. Only one in five businesses survives over ten years. Enquire now about joining our great network of people. Like to know more? PLEASE LOG ON TO www.thextonarmstrong.com.au/ presentation for a copy of our franchise presentation or email us at firstname.lastname@example.org
AUSTRALIA AND NEW ZEALAND
Business Franchise Australia and New Zealand 107
A-Z FRANCHISE DIRECTORY V.I.P. Home Services
owners by providing:
V.I.P. was the first company to start franchising in home services in 1979.
• Initial and ongoing training, coaching and mentoring
V.I.P. has over 1100 franchisees across Australia and New Zealand.
• National and local marketing
V.I.P. has franchise opportunities available in:
• Access to a network of franchisees
• Garden Maintenance and Lawn Mowing • Home Cleaning • Commercial Cleaning
• An initial start-up kit so that you are ready to go
Over the last 35 years, V.I.P. has helped over 4,000 people just like you become successful business
XPRESSO MOBILE CAFE Xpresso Mobile Cafes operate in areas nationally where there are little to no fixed location café options for the workforce in commercial and light industrial precincts. We supply premium Di Bella Coffee products – both hot and cold. Frappes, energy drinks, chilled cold brew coffee in a can (KICK), bottled water and light food options such as gourmet cookies and chocolate that are designed to complement the enjoyment of an awesome Di Bella Coffee. Xpresso Mobile Cafés also have the ability to custom
yellow express Established in 1926, Yellow Express has a proud history servicing the transport needs of a growing nation. We need dedicated people to assist in expanding our delivery fleet. We are looking for customer service focused individuals to become DSOs (Delivery Service Operators) with Yellow Express. Yellow Express provide the call centre and support to handle all phone calls, enquiries, bookings, customer invoicing, weekly payments and IT development. Yellow Express advertises for delivery
Yogurtland Australia Following three years of trail-blazing growth, Yogurtland has almost tripled in size, operating more than 296 locations world-wide… and are still growing. Yogurtland Australia are currently seeking qualified franchisees to develop, own and operate locations throughout Australia. With best–in–class, multi–tiered training and support programs in place, now is the ideal time to join the pioneers of the frozen yogurt industry.
AUSTRALIA AND NEW ZEALAND
• Affordable franchise options • An established client base
Phone: 13 26 13 Fax: 08 8220 4588 Email: email@example.com Website: www.vipfranchisesales.com.au
grind beans from a dedicated bean display cabinet and then weigh, heat seal the bag and retail with Eftpos. We also stock Di Bella Coffee specialty capsules that fit the ‘Nespresso’ pod machine. Both of these services are unique to Australia. Franchisees are supported nationally by Di Bella Coffee, a fully integrated website, social media and Internet presence as well as the Xpresso Mobile Café call centre. We’re setting the benchmark for coffee vans – will you join us? Contact Jonathan Payne at firstname.lastname@example.org to register your interest today.
and relocation work in the commercial and retail market. You as a DSO simply complete the allocated work, so you focus solely on your main role. DSOs also have a commission structure on top of their income for new account customers they bring to Yellow Express. There are no franchise fees or buy ins with becoming a DSO, you only need purchase the vehicle in which you operate, which you retain ownership of. For more information call 1300 935569, email email@example.com or visit www.yellowexpress.com.au.
• Training at headquarters; • Operations manual and training videos; • Grand opening assistance; • New store opening support and crew training; • Ongoing field support with regional operations managers, field marketing and trainer managers to help strategise, build and execute your plan on a local level; • Operations compliance systems and tools; • Comprehensive marketing and advertising programmes.
To support you and your investment in the Yogurtland brand, you receive:
For more information call 1300 709 709 or visit www.yogurtlandaustralia.com.au/franchise
business franchise australia and new zealand
A-Z Listings are a great way to promote your business, giving you a presence within our publication and also the Business Franchise website.
108 Business Franchise Australia and New Zealand
Vendor finance now available* *Available to approved applicants.
We are looking for dynamic people who love dealing with others and are passionate about retailing. The Snooze brand has a strong history of over 30 years in retailing and has built a very solid franchise system. We provide franchise partners with a stable platform to start their business and offer support across the entire business including: Marketing and Promotional Support Product Development and Buying Power Proven operating system that includes comprehensive product and sales training Business Management support from our on the ground field team Assistance in site selection and property negotiations Business finance available to approved applicants
For more details visit snooze.com.au or call Alistair Browne, our Franchise Network Development Manager on 0427 401 169
It’s amazing what a little snooze can do. snooze.com.au
25/09/14 1:53 PM
Business Franchise is a bi-monthly consumer and trade publication bringing you all the latest news, expert advice, and information from the...
Published on Mar 6, 2015
Business Franchise is a bi-monthly consumer and trade publication bringing you all the latest news, expert advice, and information from the...