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Who’d have thought? 30 years later, he’s franchisee of the year
Bringing customer’s dreams to life, his dreams came true too www.narellanpools.com.au
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busi n ess fr a nch ise aust r a l ia
From the Editor Emma Malone, Editor, CGB Publishing.
“An education isn’t how much you have committed to memory, or even how much you know. It’s being able to differentiate between what you know and what you don’t.” Anatole France.
BUSINESS FRANCHISE AUSTRALIA VOLUME 5 ISSUE 5, july / august 2011 publisher: Colin Bradbury. firstname.lastname@example.org EDITOR: Emma Malone. email@example.com
ll issues of Business Franchise Australia magazine are designed and structured to include specific topics relevant to current trends or interests. Occasionally, however, an issue becomes centred around a specific topic all on its own. It is a natural evolution generated by suggested articles from our experts in the field, coupled with ground breaking new programs being launched in the franchising field. This is just such an issue. Our feature story this time around is on Retail. We have a wide assortment of ‘Expert Advice’ articles provided by leaders in finance, legal and retail sectors – all sharing with us the current state of the retail market and the best plans for entering into this market during such a volatile economic period. These are fantastic articles and provide a wealth of knowledge. Coupled with this, though, is an underlying and self-generated theme of the importance of education. As Anatole France quoted above, it is our ability to acknowledge that we still have so much to learn that allows us to grow. We have included two special articles dedicated to furthering your knowledge.
The FCA has long recognised the importance of business acumen in new and existing franchisees. Addressing this issue, the FCA has partnered with the William Angliss institute and Business Essentials to launch an exciting new program aimed at developing franchisee knowledge. This will in turn help franchise systems boost their business power and competitiveness. Westpac, in another bold move to assist franchisees (along with anyone else who would like to get a better handle on their financial expertise) has developed Australia’s first ‘School of Money’. The Davidson Institute is a comprehensive educational resource designed to help all Australians make more confident financial decisions. Add to this the many times our experts refer to the importance of being informed, reading more articles, attending more seminars, consulting with advisors and the message is clear.
SALES DIRECTOR: Vikki Bradbury. firstname.lastname@example.org SALES EXECUTIVE: Kathleen Lennox. email@example.com SALES EXECUTIVE: Jo Clarkson. firstname.lastname@example.org PRODUCTION: Donna Lloyd. email@example.com ACCOUNTS: Joanne Tuffy. firstname.lastname@example.org DESIGN: Jejak Graphics (03) 9772 2571 COVER IMAGE: Trios Wraps TO SUBSCRIBE: www.businessfranchiseaustralia.com.au or www.isubscribe.com.au CGB PUBLISHING PO BOX 968
Knowledge is king. Enjoy the read.
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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 3
busi n ess fr a nch ise aust r a l ia
july / august 2011 On the Cover 11
Cover Story TRIOS Wraps – Helps you wrap up your success
32 Stake your claim in the online space
Josh Frith, The Dubs
Protect your money – Tax changes effecting franchise businesses Jamie Bishop, McLean Delmo
In Every Issue
– Creating a social media campaign
06 What’s New! Announcements from the industry
Franchises in Focus
14 Franchising Economy – Good to grow Steve Wright, FCA
30 Narellan Pools Beautiful pools, big opportunities
16 A serious approach to helping small business Stephen Giles, FCA 20 Janine’s Tips – Boost your retail knowledge
60 Luxaflex Triumph with your own
window fashions gallery business
62 Consultant Close-up Sherpa Group – Climb higher 68 Feature Article Retail – It’s big, it’s exciting, it’s everywhere 94 Franchisor in Depth Schnitz – It’s all about taste 108 Ask George Professional Answers to Questions from Our Readers 122 Behind the Headlines Jason Gherke 123 Professional Services Listings 124 Franchise Listings 126 A-Z Directory
50 Franchisee in Action Wet Seal – A waterproofer that can cook
Anytime Fitness............................................ 86
Cross training for your franchise business
Katie Sweatman / Esther Gutnick, Mason Sier Turnbull
Battery World................................................. 82
In Retail, it’s never just one thing: See your projects through to completion
Body and Health Solutions.................... 82
Bob Way, Retailplanners
Brazilian Butterfly......................................... 34
56 Leverage: Be more efficient in less time Katherine Grace, ActionCOACH
Forty Winks. .................................................... 44
72 How to choose a retail site? Rick Jobson, Kings Jewellers
Franchise Selection.................................... 42
84 The retail landscape Marwan Kojok, DCS Lawyers
Franck Provost.............................................. 12
88 Financing your franchise purchase: How do you do it? Colin Linke, Bentley Partners
Spotlight On Services
Gelatissimo...................................................... 52 James’ Home Services............................ 40
100 Marketing vs. advertising: What’s the difference? Les Hall, AdMarketing
Flowers by Fruit........................................... 112
Jim’s Roofing & Flooring Services.................................. 104 Jumping J-Jays............................................ 54 Lenards............................................................ 114
78 Billings Long A perfect fit for your business
116 FC Business Solutions Growth continues
Midas. ................................................................. 24 MYCORE Properties.................................. 98 RP Vending...................................................... 26
Education Insight 106 FCA – William Angliss Institute Franchise education
80 Davidson Institute Australia’s first school of money
Shedboss......................................................... 46 Snap-on Tools............................................... 90 Spanish Doughnuts. ................................ 110 Telechoice........................................................ 18
what’snew! Sherpa Group joins Vinnies CEO Sleepout
HUDSONS REWARDS YOUNG TALENT WITH MANAGE TO BUY PROGRAM Hudsons Coffee has recently appointed its first new franchisee under the ‘ManageTo-Buy’ scheme. This new program was launched to provide talented young managers, internally, with the opportunity to take on their own stores and becoming fully owned franchisees.
You could tell he was passionate about his customers and that he loved our business. I had no doubt that he was a fabulous candidate for the Manage-To- Buy scheme and that with the right financial offer and additional business mentoring he would become a successful Hudsons store owner.
Twenty nine year old Bobby Singh, the first ‘Manage-To-Buy’ franchisee, took ownership of his Hudsons store in William Street, Melbourne earlier this year and has already grown sales by 10-11 per cent.
The advantage of this new scheme is that the program has been designed to suit young franchisees needs including: low entry franchise offers and more intensive support, including regular monthly meetings where all aspects of the business progress are tracked and discussed, “ Ms Gialamatzis said.
After managing the busy Hudsons store in Windsor for nearly two years, Bobby always had the desire to own a Hudsons store but didn’t think it would be possible financially, at least in the short term. So when he approached Hudsons Franchise Selection Manager, Gill Gialamatzis, last year with his desire to one day own his own store, he wasn’t sure where it would lead. Twelve months later he had his own store. Gill explained that Bobby was the ideal first candidate for the ‘Manage-To-Buy’ scheme. Gill said Bobby exhibited many of the traits they were looking for whilst he was managing the Windsor store. “Bobby always showed initiative and independence when in his managerial role.
6 Business Franchise Australia
Although Bobby knew the operational side of the business inside out, he was still required to undertake a comprehensive application interview, which included a behavioural analysis, and once successful a dedicated franchisee training program, before taking ownership of his store. Bobby knows that the opportunity Hudsons has provided him is one he won’t take for granted. He already has plans to take ownership of another store in the future. Although in its infancy, Hudsons already has its sights set on the next ‘Manage-To-Buy’ candidate, with an announcement due to happen soon.
Adelaide business Sherpa Group’s CEO, Vicki Prout, took up the challenge and joined the national fundraising St Vincent de Paul CEO Sleepout event on Thursday, 16 June in South Australia. Event participants spent one night sleeping out at the Adelaide Zoo with limited bedding and selected food to experience homelessness first-hand, creating awareness and raising funds for this continual challenge that our community faces daily. Vicki Prout said she was willing to join the crowd and sleep out in the cold to raise awareness concerning homelessness within her business sector (the franchising industry). “Like the traditional Sherpa, who braves the elements, protects where they can, leads from the front, carries packs and guides, I am hoping my small part will enlighten and encourage others to donate and become aware of the difficulties faced by many within our society. “By joining the cause to raise awareness of homelessness and provide the necessary funds, we were able to contribute positively to the thousands of people around South Australia [and nationally] who experience disadvantage,” said Vicki. The Vinnies CEO Sleepout began locally, in Sydney, in 2006 before expanding to a national event and raising over $2.9 million in 2010. Money raised goes towards funding new projects, crisis accommodation, domestic violence support counselling, life and occupational skills, legal advice and education.
Cards franchise Wild Cards & Gifts cool on eCommerce following sales spike Giftware franchise Wild Cards & Gifts says it has no intention of introducing an online shopping platform, after recording a 10.4 per cent sales increase on last year in the week leading up to Mother’s Day. According to Wild Cards & Gifts franchisor, Lawrence Boyle, the company’s 43 stores generated more than a $1 million in sales over the week surrounding Mother’s Day. Boyle says while the company does have an online presence, it has no intention of introducing an online shopping platform.
“We don’t see it being of value at this point because it’s like tonight’s dinner – people plan it as they go and the distribution system doesn’t yet match up with that,” he says. “For large ticket items, it often makes sense to buy online. But a lot of our gifts are fragile and our offering therefore doesn’t translate easily into online sales. However, we do influence customers online to visit our stores by displaying online catalogues,” remarks Boyle. Boyle says there will always be a market for
cards, particularly at the premium end of the market, dismissing the rise of eCards. “There was the suggestion 10 years ago that the eCard would remove us. With regard to cards, the application is still to share a sentiment with someone in a style that is individual to them [which eCards fail to do],” he says. Boyle goes on to say, “Our biggest threat is the ‘cheap and cheerful’ productions, and the fact that people tend to cut back on items such as cards when times are tough.” Wild Cards & Gifts plans to open another three to eight stores in the next few years, and isn’t overly concerned about franchisee recruitment. “Our unique selling point is that we have one of the lowest franchisee fees in the industry. The standard weekly service fee is 9 per cent, but we offer 4 per cent.” Boyle says three quarters of the chain’s franchisees are husband-and-wife teams. This allows them to work different days and give them greater work/life flexibility. “However, we are seeing more motherdaughter franchisees. Traditionally, a new franchisee is aged between 30 and 50, with 60 per cent women and 40 per cent men,” Boyle states. This article first appeared on StartupSmart, Australia’s top site for start-up entrepreneurs.
Corporate push accelerates with start-up franchise The lure of white-collar business in the heart of one of Australia’s biggest corporate hubs has played a significant role in Bartercard establishing in Melbourne Central - its first start-up franchise in four years. This is the latest stage in Bartercard’s push for a foothold in the corporate sector around Australia, adding to its traditional territory of SME’s, which has underpinned its growth to approximately 20,000
members during the past two decades. Bartercard Australia Managing Director, Brian Hall, has been forthright of late about looking to increase its presence in the corporate sector which, no doubt, will open doors for the company.
for many of their core products and services. Bartercard brings both sectors together, working to achieve a stronger alliance between the two.
Bartercard’s foundation has been built on SME’s says Brian. Trade exchanges not only work well for this sector, but also for corporate Australia, because ultimately the corporate sector feeds off smaller businesses
Business Franchise Australia 7
Grill’d launches ‘Local Matters’ program in Victoria and New South Wales Grill’d has partnered with Feed Melbourne in VIC and OzHarvest in NSW in a new charity initiative to raise funds for local food rescue charity groups. By the end of the month, Grill’d expects to have donated well over $20,000 to local charity groups associated with these organisations.
Grill’d is asking burger connoisseurs to visit their local restaurant during June to order a burger and be rewarded with a token. This token can then be deposited into one of the three jars representing three local groups associated with Feed Melbourne or OzHarvest. Beyond June, Grill’d is planning for the
jars and tokens to become a regular fixture as part of the ‘Local Matters’ initiative. In future months, Grill’d will take the project to other states. Every month, each Grill’d restaurant will feature three different local groups who will be asking for customers’ support. And Grill’d restaurants across the country will be stumping up a $500 donation to share amongst them.
THE FACE OF JIM’S ROOFING & FLOORING FC Business Solutions PR & Marketing Services recently brokered a deal that has seen Brisbane Lions’ captain Jonathan Brown become the face of Jim’s Roofing & Flooring Services. Jim’s Roofing & Flooring Services officially re-launched its division in May and has recently kicked-off a radio campaign in Victoria. Brown will become the face and voice behind the brand, along with Australian basketballer, Abby Bishop. The Brisbane Lions skipper and Bishop will assist the division to attract contractors, as well as connect with the consumer market to obtain business. FC Business Solutions is assisting Jim’s Roofing & Flooring Services with a 12-month PR, Marketing and Advertising campaign.
8 Business Franchise Australia
Better training is key to franchisee success “We are selling a particular product that involves the need to train people so they can run their business consistently and continuously. As far as induction training goes, there is a need to balance theory and practice in a meaningful timeframe.” As a franchise system grows and evolves, so does its training requirements.
group of Australia’s top franchisors believe one of the biggest challenges currently facing the $128 billion industry is the need for across the board improvements in the key area of franchisee training and induction. A shift in culture and improved training methods to adequately equip franchisees with the confidence and skills to grow the brand successfully was the main outcome at a recent ‘Breakfast Networking’ meeting, held by franchise consultancy group FC Business Solutions and attended by more than 20 industry specialists. FCBS Director, Corina Vucic, says whilst traditional ‘one size fits all’ training and induction for franchisees may be cost effective; it is probably not the best way to ensure each individual is adequately trained and has the confidence to run a business. “Franchisors have a responsibility to allocate funds and then use those funds in the best way possible to develop all team members,” Corina said. According to Julia Camm, from Corven, an industry research and advisory service, a simple first-step franchisors should take to change their approach is a shift in terminology from ‘training’ to ‘learning’. Michael Vassallo, National Training Coordinator, Tyrepower, said “we are not just selling a franchise business”.
Geoff Antcliff, State Development Director of Specsavers, explained that as their network grew, the practice of having existing franchisees act as partner/mentors to new franchisees was no longer working. They introduced a new training model, based on a franchisee-paid training levy to fund the employment of specialised trainers, rather than relying on other franchisees to provide mentoring. “We have 355 partners across Australia. We were having problems with getting them to be a partner-mentor. So now, in each state, we have two or three staff who are purely dedicated to our training program, including in-store training, and this is working well.” Peter Fiasco, the National Operations Manager for Quest Serviced Apartments, said franchisors need to take a more holistic approach to the way their franchisee support and training divisions operate. “The best thing we did was put franchise support and learning/development together. For specialised knowledge and skills – partnering is the key. It was agreed that blended learning using a balance of internal core and external specialists with a mix of eLearning, formal training and on-site learning was the best practice approach to franchisee training and induction.
Trampoline Gelato Trampoline is a celebration of taste, colour, style and service. A surprisingly different retail food offer, Trampoline makes all its own gelato using only the finest quality milk from Victoria’s best dairy farmers and premium, all natural ingredients. Renowned for its colourful, playful branding and uniquely popular flavours, Trampoline offers simple pleasures served fresh, with a grin. Award winning gelato flavours such as Choc Therapy, Crème Caramel and Lamington come together in a delightful range of quirky, handmade cakes, good ol’ fashioned shakes, decadent sundaes and fresh fruit smoothies. Developed by the owners of one of Australia’s most successful dairy exporters, Trampoline is 100 per cent Aussie owned and has stores across three states. Franchising since 2007, franchisees enjoy full training, ongoing operational support, comprehensive in store group marketing campaigns and assistance in developing their own strategic local area marketing plans. Fun to work with, but serious about business returns, Trampoline is looking for franchisees who share their passion about the brand and want to grow their own business. Experience isn’t essential but commitment to providing outstanding customer service and a premium product offer is. For more information, visit www.trampolinegelato.com.au
Business Franchise Australia 9
TEAM UP WITH THE TELSTRA LICENSED STORE PROGRAM AND START YOUR SUCCESS STORY
No franchise fees or ongoing royalties
Fresh store design & live interactive devices
Comprehensive training for new partners & staff
Backed by one of Australia’s biggest brands
Ongoing operational support
FY 2009 168 STORES 181 STORES FY 2010 199 STORES FY 2011 239 STORES FY 2012* 269 STORES FY 2013* FY 2014* 289 STORES
Then do it with the help of one of Australia’s biggest and most successful retail brands. When you join the Telstra Licensed Store program, you run your own store, selling a wide range of high quality products in a cutting-edge interactive environment. You also enjoy the promotional support of an experienced marketing team partnered with this country’s leading agencies. Key features of the program include:
We’re committed to growing our Licensed Store program Actual/Projected number of Telstra Licensed Stores
Ready to run your own business?
To learn more about this exciting Telstra Licensed Store program, email us at firstname.lastname@example.org The Telstra Licensed Store program is not a franchise and does not involve a franchise agreement. THINGS YOU NEED TO KNOW: * These are projections only and are subject to change at any time. ® Registered trade mark of Telstra Corporation Limited, ABN 33 051 775 556.
COV ER STO RY
helps you wrap up your success
or the past year and a half TRIOS Wraps has been mapping the consumer journey and have examined every customer touch point (from interiors to packaging). After a little nip and tuck, they have unwrapped their new brand direction. This includes a deeper, earthier colour palette and an array of finishes that can be aptly described as ‘grunge chic’. Appealing to Gen X and Gen Y, TRIOS have also ‘turned on the taste’. The company has re-examined every recipe and taste profile – and promised to be true to each – whether it’s heat, punch or flavour! The menu offering has also been slightly altered subject to location, but has been created to service breakfast, lunch, snacking and dinner trade.
Down to earth appeal TRIOS appeal that transcends day trade to evening trade and flavour profiles that appeal to a broad demographic. TRIOS Wraps has always been a healthier alternative in the fast, casual sector and the new look and feel successfully creates appeal to both the younger clientele, who are looking for a taste experience, along with customers in their mid-30s to mid-40s, who are seeking a healthier alternative to a traditional sandwich. By focusing on the ‘freshly grilled’ approach, TRIOS effectively caters to customers for both evening and weekend trade. Recent surveys conducted have shown that Gen X and Gen Y, in particular, have developed an immediate emotional affiliation with the new interiors. This is very important in developing long term customer loyalty.
Going global TRIOS Wraps was established in 2002. In just under a decade, they have become the country’s national wraps franchise with 10 outlets in Victoria and NSW. The company has challenged the way wraps are perceived and consumed. TRIOS Wraps has always been about delivering awesome tasting wraps and a memorable, totally satisfying and vibrant experience. TRIOS is a spirited, fun loving brand with a promise to serve freshly grilled wraps that taste absolutely incredible! The flavour profiles have been so popular, TRIOS Wraps has now expanded the franchise to Saudi Arabia (eight stores) and the USA (Houston, one store), and are currently in negotiation for development in Eastern Europe. Short term plans are to open three stores in Victoria by the end of this year and 15 new stores in total by the end of 2013 (across Australia). Internationally, they are also speaking to a retail conglomerate in India and China, respectively.
Looking for fun franchisees It is imperative that the TRIOS Wraps franchisees embody the brand and culture of TRIOS. They should be spirited, youthful and always up for a laugh – and they want their franchisees to emulate this personality. They are very passionate about food and customer service. They therefore expect all of their franchisees to portray that passion and effervescence behind the counter. The management team is young, hip and trendy. They believe in the true Aussie lifestyle of balancing work and play and leaving time for lots of fun. By offering a TRIOS Wraps franchise, they are in essence offering a chance at this lifestyle. If you are enthusiastic, vibrant and want to be on the forefront of trends, then TRIOS Wraps is definitely the right franchise mix. Age isn’t
a barrier – but if you are in your thirties and forties, you will definitely enjoy the ride. Name and Title of person who said this - “TRIOS Wraps has a training and development program that is second to none. Even if you don’t have any F&B experience, once you are a part of the TRIOS Wraps family, you will be equipped with the skills and tools to effectively manage your store. From detailed operational training, management training, store opening and closing procedures and local store marketing assistance – TRIOS will, in essence, hold your hand and walk you through the process. Something TRIOS management realised a long time ago is that the franchisees are not just business partners, they are also brand ambassadors – hence the regimented training and support program has been created to ensure new franchisees are developed on all aspects of running a TRIOS Wraps store.” The operations team will assist you with site selection, fitout coordination, set up of the supply chain and pre and post-opening presence. TRIOS Wraps has a dedicated marketing department that assists franchisees with opening marketing campaigns and ongoing, below the line strategies. The management team has an open door policy and are always excited to meet and hear from their franchisees. TRIOS Wraps – fun, cheeky and stylish, this franchise is attracting and interacting with Gen Y and Gen X customers. If you would like to own your own business and be part of a brand that is exciting and lively, join the TRIOS Wraps team. It just doesn’t get any better! For more information on franchising with TRIOS Wraps contact: Phone: Web:
03 9370 5833 www.trioswraps.com
Business Franchise Australia 11
PROFILE : Fr a nck Provost
a Paris sensation A
ustralia is welcoming a new level of luxury in the hair salon industry with the launch of Franck Provost
Franck Provost is the leading hair salon in Paris and throughout France. The company is now an international sensation with more the 650 salons in 30 countries around the world. The creator, Franck Provost, opened his first salon in the chic suburb of Saint-Germain-
en-Laye near Paris in 1976 with a vision of accessible luxury, high quality products and superb service in a beautiful, cutting edge salon envirnonment. Franck Provost has now achieved an exceptional 30 year career catering to international celebrities such as the late Lady Diana, Sharon Stone and Juliette Binoche, as well as being an integral part of prestigious events including the Cannes Film Festival. Franck Provost brings the same creative flair and superior products to anyone wanting to enhance their natural beauty and receive affordable, high quality products in a warm and welcoming atmosphere. Using their own exclusive range complimented by the best quality products from Kerastase Paris and Lâ€™OrĂŠal, Franck Provost salons can offer all their clients a first-class experience and outstanding service. Everyone who visits a Franck Provost salon can feel like a celebrity! Franck Provost has already launched their
12 Business Franchise Australia
first signature salon in Sydney and are now looking for savvy franchisees to become a part of their team. Franck Provost plans to open 10 new salons by the end of 2011, with long-term plans to expand Australia wide. If you are a hairdresser who wants to launch your own business or convert your existing business to an internationally recognised brand, perhaps it is time to contact Franck Provost. Or, perhaps, you have a sharp business sense and would like to become a part of the salon industry. This is a unique opportunity to enter into the Franck Provost franchise at the very beginning of their entry into the Australian market. For further information on franchise opportunities with Franck Provost contact: Franchise Selection Phone: 1300 FRANCHISE (372 624) Email: email@example.com Web: www.franckprovost.com.au
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Business Franchise Australia 13
fr a nch ise cou nci l of aust r a l ia
Good to grow! I
s the Australian economy going out the door sideways? Is the franchising sector full – no more room at the inn?
No and no…are the answers, at least according to the nation’s most authoritative economic forecaster, the Reserve Bank of Australia, and one of the country’s founding franchisors, now adviser and company director, Michael Sherlock. In fact, the Reserve Bank thinks the economy is looking so good for the second half of the year, it is softening the soil for a possible interest rate rise later in the year. There is no rush of excitement at the news of a potential rate rise. On the contrary; my guess is almost everyone in the small business market across Australia would argue strongly against just such a move. But the fact is the RBA is conditioning us for a possible rate rise based on the fact it is concerned the economy may start to grow quickly….that a recovering economy, coupled with wage rises and consumer spending, could see our inflation level tick up. The RBA is very mindful of keeping a lid on inflation, so it feels the need to keep its foot poised above the brake pedal. It has essentially told us that the economy took a big hit with the floods which devastated large parts of Queensland and severely hurt farmers and other business owners in NSW, Victoria and WA. However, according to the RBA, the damage is being repaired and the repair job is adding a stimulus to the economy that will see our bad first quarter of calendar year
14 Business Franchise Australia
“While we had an economic shock in the first quarter of 2011, due to the floods, most economists say we will bounce back strongly in the second half of 2011.” Steve Wright, Executive Director, FCA.
2011 followed by a dramatically stronger second quarter to the end of June. The RBA is not the only authority anticipating an upturn. Recent reports by the International Monetary Fund (IMF) and by the Economist magazine have added to optimism about the economic outlook for Australia in 2011/12. Both rate the Australian situation very highly, near the top of the global leader board in terms of growth prospects, strength of banking system and other important economic fundamentals. And what of growth in franchising? Michael Sherlock, the co-founder of ubiquitous bakery Brumby’s, is bullish. “I see plenty of growth going on right now – and I see plenty of room for more,” he said recently.
World views There is also some increasing optimism in other parts of the world. The new CEO of the American Franchise association – the world’s biggest by far – says he expects some ‘bumps’ along the road for the US, but that the picture looking ahead is bright. According to Steve Caldeira, President and CEO of the International Franchise Association, the tight credit market will mean franchising will not grow as fast as it did in the first decade of the century. But he is confident the worst is over. Steve believes there is now a path back to growth, emerging from the GFC aftermath. In the UK, a prominent bank recently announced an aggressive push into the franchising market. NatWest/RBS said it was setting aside a £100 million fund to be made available to both companies seeking to expand by franchising as well as individuals who wanted to become franchise owners.
Australian forecast In Australia, NAB continues to work the small business market and says it is lending more to franchising businesses now than in recent years. It has set up a network of franchise specialists in the major capitals to make sure it has the expertise in place to efficiently assess franchising opportunities. Westpac has also increased its focus on franchising this year. While we had an economic shock in the first quarter of 2011, due to the floods, most economists say we will bounce back strongly in the second half of 2011. The first quarter of the 2011 calendar year recorded a contraction of 1.2 per cent in the national economy. But by the end of the June quarter, the level of GDP is expected to be back close to where it would have been in the absence of the floods and, over the remainder of the year, to be slightly higher than originally forecast. Interest rate increases appear to be on the backburner for at least July and August.
Back to baking Brumby’s co-founder, Michael Sherlock, views the prospects for franchising in Australia in 2011/12 and beyond by saying, “We have been there before and franchising emerged well.” He rejects the suggestion that the franchising inn is full. “It will always grow, the growth will never be over,” Michael stated recently. Within his own industry, Michael said, “There are many more new bakeries in the market recently - many with Asian influence.” At the launch of his new book JumpShift, Sherlock talked about the negativism which sometimes occurs when the economic cycle is challenging.
“Pizza is a tough game, but we have Crust and the gourmet pizza market doing really well. It is about quality and service, not just price. “New coffee concepts are still emerging and there is room for more. There are always new ideas and new technologies. It is never going to be over.” Michael Sherlock’s book is a ‘how to’ manual for aspiring franchise owners. It is a great place to get a hands-on understanding of how franchising works and how to make it work for you. And at the risk of blowing the horn for Queenslanders, it makes a great stablemate to The Eagle Boys Pizza Story, a book written by Eagle Boys (pizza) founder, and Sherlock contemporary, Tom Potter. Tom’s book, resplendent in Eagle Boys pink cover, is a story of how a great business was born out of a simply identified opportunity, and a determination to shake the tree and do something different to the established competitors. And it worked. As Potter would say, not without plenty of stuff-ups along the way; but the brand established more than a niche and continues to expand today. Tom Potter has since taken his slice of the pizza pie and moved on to other endeavours (including running his own new venture, the Crusty Devil Bakehouse, a 24 hour bakery drive through, in suburban Brisbane). Anyone looking to start a career in franchising could do a lot worse than reading these two very simple, very direct books. And that, of course, is the essence of good franchising – good concepts, simply explained and executed with determination and passion.
Business Franchise Australia 15
fr a nch ise cou nci l of aust r a l ia
A serious approach to helping small business
he USA approach to supporting small business is meaningful and substantive. Indeed there is really no comparison between support provided to the small business sector in the USA compared to Australia. Take small business access to finance as an example. Under the USA Small Business Act program (the Act), a government guarantee is offered to support a loan from a bank, where the borrower has no access to funds from other sources. The loans are managed by the
16 Business Franchise Australia
Small Business Administration (SBA), which is a government agency established under the Act. Established in 1953, the SBA has directly or indirectly helped nearly 20 million businesses and in 2008 had a loan portfolio of roughly 219,000 loans worth more than $84 billion, making it the largest single financial backer of businesses in the United States. Wow, that is impressive! But wait, there is more. The Act has as its primary aim to “aid, counsel, assist and
protect, insofar as is possible, the interests of small business concerns.” The SBA also stipulates that a ‘fair proportion’ of government contracts and sales of surplus property go to small business. This is accomplished primarily through the Small Business Innovation Research, which is coordinated by the SBA and ensures 2.5 per cent of the total extramural research budgets of all federal agencies, with such budgets in excess of $100 million, are reserved for contracts or grants to small
“It is time for governments to get serious about programs to help small business.” Stephen Giles, Chairman, FCA.
businesses. In 2010, that represented over $1 billion in research funds. Over half the awards were to firms with fewer than 25 people and a third to firms of fewer than 10 individuals. Add to this the fact that 20 per cent were minority or women-owned businesses, and 25 per cent of the companies were first-time winners. Wow again! The SBA guarantees are available to businesses that are ‘independent’, have a net asset value below a generous $15 million and meet the SBA eligibility criteria. Lenders, not the SBA, approve the loans. The program is not designed to increase gearing, it is designed to provide access to finance for those without collateral. There are minimum equity requirements, and borrowers have to provide all security they have available. Loans are on normal commercial terms. The franchise sector is a fertile area for SBA loans, as typically franchisees will meet the loan criteria. Franchises are also regarded as a superior general credit risk, particularly as the SBA has been active in setting best practice guidelines for SBA loans to the franchise sector. Indeed, the SBA has sponsored the establishment of the Franchise Registry, which aims to expedite and streamline the loan approval process. There are revised eligibility guidelines and operating procedures for franchise loans, and a streamlined review process for franchise
systems. The Franchise Registry enables lenders and SBA local offices to verify a franchise system’s lending eligibility through the internet. This reduces red tape, time and costs for all concerned.
Finding a way This is an impressive small business support arrangement that is streets ahead of anything in Australia. As a consequence, the USA small business sector has been able to flourish and the franchise sector expand, both becoming the engine room of the USA retail economy. Importantly, the USA has found a way to ensure genuine access to finance for those usually ignored or rejected by the banking sector. They lend to those with the skills and the business, but not the collateral. This means loans are given to the young, to women, to ethnic minorities, to returned service personnel, to migrants and so forth. In the United States, they do not just talk about equality of opportunity, they have programs to ensure it occurs. In Australia, we think we are providing equality of opportunity, and in employment and other areas we do. But not in business, small business is at a major disadvantage in many areas.
Australian small business In Australia, access to finance is considered to be a problem, but not as much of a problem
as we realise. The opportunity cost to the Australian economy of the current banking arrangements is likely to be in the millions of dollars. In Australia, most franchise systems would have on their books suitable franchise candidates and business opportunities that could be successful if the prospect could obtain finance. Lets do some rough numbers – 1,000 franchise systems x five candidates x $200,000 (average cost of a franchised business) = $1,000,000,000 in lost opportunity! The Australian economy is supposedly prospering, judging by macro-economic statistics. But in the suburbs and the real economy, things are tight. We need some growth, and to get the growth we need some funding. Bank lending and access to finance remains largely based on property value security, and property values have dropped, or at best remained static, over the past few years. It is time for governments to get serious about programs to help small business. A program like the SBA program, carefully put together, would be low cost to the government and would create thousands of opportunities. The USA introduced this scheme in 1953, so it is hardly a radical idea!
Business Franchise Australia 17
PROFILE : TELECH O ICE
RIGHT CHOICE I
n the years since the first store opened in 1995, TeleChoice has grown into a thriving network of over 150 stores, and their growth is continuing. The commitment to quality service has made TeleChoice the number one premium Optus dealer in Australia. The partnership with Optus and Virgin Mobile means TeleChoice has the ability to offer customers the latest products and the best special deals. TeleChoice is the first choice for many customers looking for mobile phone, internet and telecommunications products. They also service a large part of the small to medium business market and continue to grow their market share. This makes TeleChoice always the right choice when considering a franchise in the telecommunications industry. Just ask Punit Patel from New South Wales. Punit came from a background in telecommunications. He was extremely familiar with the industry, the products on offer and the availability of different franchising systems. When asked why Punit chose TeleChoice he said, “I was looking at something within this industry. One of my previous managers had purchased a TeleChoice franchise and highly recommended it to me. “I did quite a bit of research and knew how much money I had to invest in the business. TeleChoice was the right price.” At the time Punit had a very young family, with six month old twins. It was an extremely busy time in his life
18 Business Franchise Australia
to start on this new journey. However, Punit’s wife had also worked in the industry and knew the expectations. Punit purchased his TeleChoice franchise in September 2009. He knew that it would take a substantial amount of commitment and hard work to get the business up and running. “I was committed to the business. When you own the business, you are going to make sure you perform at the high standards you set,” comments Punit. “You need to be absolutely hands on in the first year and set up all the systems,” says Punit. “You learn as you go and TeleChoice is always there to help and assist you.” Punit said that one of the highlights of being part of TeleChoice is the annual conference. He says, “It is a great team building exercise. My first conference we went to Thailand, and then we went to Egypt in 2010.” This allows the franchisees to join together and discuss ideas. TeleChoice also has suppliers on hand to demonstrate all the latest products and technologies. Punit commented that the annual conference also mentally makes you prepare for being able to be ‘out of the office’ for a week. Working ‘on the business’ and not ‘in the business’ is a crucial step for franchisees as they must have every system in place and in good working order, if they hope to leave the shop for one week to attend the conference. Punit says TeleChoice helps new franchisees with all these processes so they can feel comfortable being away from their store, knowing all the procedures are in place.
Punit says the hard work has paid off and he is now looking to expand within the TeleChoice system. If you are passionate about success and would like to become a TeleChoice franchisee, contact: Phone: 03 8699 2555 Email: firstname.lastname@example.org Web: www.telechoice.com.au
WELL, NOW THE CHOICE HAS NEVER BEEN EASIER
SO WHICHEVER WAY YOU LOOK AT IT - NOW IS THE TIME TO MAKE THE RIGHT CHOICE AND CALL TELECHOICE TODAY!!
Ja n i n e’s Tips
YOUR RETAIL KNOWLEDGE JANINE SHARES HER BOOST JUICE STORY
here is a breed of humans that are referred to as ‘retailers’. This term describes a certain person who just gets what retail is about and understands what it takes to be successful. A retailer is normally passionately obsessive about the customer, understands that it is a lot of little things that makes their retail business successful, and they are normally really, really hard workers.
This article is written to advise you of some of the things I have learned and to explain how I became a retailer. At the end of the article, you may be scared off retailing for life or you may look at yourself in the mirror with that twinkle in your eye and say to yourself, ‘Yes - that is me, I’m a retailer’.
Okay then, from the beginning… I was not a retailer when I started Boost.
At 14 years old, I had worked at Target as a checkout chick, but I don’t think that counts. I was a marketing person, working for a movie distribution company called United International Pictures as a publicist; a fun job meeting all sorts of movie stars and directors, but it did not get my juices going sorry for the pun! Once I had my third child, I was ready to be my own boss, but I just didn’t know what I wanted to do.
A not so funny start! With my PR background and my husband in radio, we thought that we would tour famous comedians. We felt there was a hole in the market place that we could fill. We hired a guy who said that he could get us Robin Williams, Eric Idle and Jerry Seinfeld. After paying an $80,000 retainer fee, nine months later, we had no one. Eventually, he said that he had this amazing comedian called Bob Smith. We had no idea who he was, but at this point he could have offered us a twirling poodle and we would have said yes. In fact Bob was quite funny, but that didn’t help us make any money on the project!
When the juices started flowing Two months later my husband was going off to the USA for business with the radio network he was working for, so I tagged along. In the USA, I discovered the juice and smoothie industry. It had been around for about seven years and was growing at
20 Business Franchise Australia
“Choose carefully who you go on your business journey with, because your success in life and business will depend upon it.” Janine Allis, Managing Director, Retail Zoo.
an enormous rate. Personally, I did not like the look and feel of the juice bars I saw, but I loved the category. As a customer, there was nothing in the Australian market that I believed was fast and fresh. So with a pen and paper, I started to put the business together. My husband, Jeff and I created a business plan. Looking back now, my first business plan was really a marketing plan with a couple of token numbers in the back. We presented this business plan to some of Jeff’s radio buddies and surprisingly enough they were keen. I looked for investors, but they had to be the right personality. We were looking for the right type of person, because the right person with the right work ethic and drive can make NEARLY anything work. But in hindsight, each of Jeff’s mates invested in us! With $250,000 in the bank, we went and opened our first store in Adelaide on King William Street. Fast forward 10 years - now we have over 250 stores in 15 countries, turning over more than $135 million per year. Add to this a new concept, Salsa’s Fresh Mex Grill, that is now at 22 stores and growing.
The fundamental five P’s The five P’s are the fundamentals when getting into retail. These define how to be a great (not good) retailer: People People are your greatest asset, but also your biggest liability if you get it wrong. I look back at all the great and all the bad in business. It is all based around people. Choose carefully who you go on your
business journey with, because your success in life and business will depend upon it. Success or failure does depend on not only the people you hire, but the effort you put into the training. A communication strategy, put in place and followed, is critical to the success of your business. It is a fact that the companies who spend more time with their teams are 80 per cent more successful. I think it is more like 100 per cent! People are often one of your largest expenses. Once you have hired and trained your team, managing your roster is extremely important, as wages in a retail store can easily blow out. Retail can have quite a young work force, so it is even more important to have strong systems to manage your teams. Reward your team members and get them involved in the business. Tell them about the profits and what you are trying to achieve. They will help you get there if they feel a part of the journey. Position No matter how much marketing, training etc. you do, if you get the wrong site in the wrong place, it is a continual upward battle from there. It costs the same amount to build a site in a poor location as it does in a good one. So be patient and make sure you only take a great site. Otherwise your great idea, which may have been huge, could end up as one of the four out of five businesses that fail. Product Marketing is simply giving the customers what they want, which means you have to find out what they want in their products. Not only do you have to create a product that
lots of people want, you also need to make sure the product is costed correctly. The number one reason people buy our product is for TASTE, all the rest is secondary. You can turn over $1 million a year, but if you are not managing your costs then you are wasting your time. Cost of raw ingredients is one of the three largest expenses in your business. Once you have established the costs of each individual product, it is important to ensure that you are training your staff on wastage and following the recipes. The great thing about Boost is there is a large percentage of the raw ingredients that are frozen. Therefore, the biggest wastage that occurs is the result of poor training of team members. If you are dealing with fresh ingredients, always check that the order is delivered in full, in top condition and at the price you agreed. Price Sometimes people forget that the price of the product is in fact part of marketing the product. Research has shown that people are happy to pay a premium price if they see value in the product. In other words, people will pay more for quality. So it is everyone’s job to ensure that we market the product correctly, but also price the product at a price that is of value. We have found that often, people think that the product is quite expensive, but once they have tried the product, they see good value. Do not underestimate the impact price has on your success. In the early days, you may have to sacrifice some margin to build the business.
Business Franchise Australia 21
e Ja xn pert i n e’sadvice Tips
Promotion There is a strong chance that NO ONE has heard of your business in your area or region. Each store opening needs to open with a bang, but that does not mean it has to be complicated. The key attributes of Boost are to be customer focused and generous. Once they have tried a Boost Juice and we give them the great customer service, they will come back. So knowing this, a massive sampling campaign of giving away 100’s of free smoothies achieves the following: • vibe of the store (no one goes into an empty store) • staff experience • people will get to know you are there • great marketing opportunity When you do your giveaways, staple or connect a menu explaining what your business is about. This is starting the ‘getting to know us’ process. There is nothing like something for FREE to get the attention of a customer. From day one, in Boost’s first store, I started to collect names and email addresses. We used to give away prize packs each month for the lucky Boost Club winner. This gave us an instant database to start to communicate to our customers. These days, customers are quite fatigued about getting emails, so you need to make sure the customers are happy to receive your email. A good rule for email is to try not to sell; just give good information and great offers. Many people would be horrified to give their competitors even one dollar, but being a regular customer of your competitor will keep you up to date with what they are doing. Join any loyalty program that your competitors have so you know what they are doing. However, you should not be spending too much time focusing on your competitor. I have seen many companies spending so much time focusing on their competitor that they forget about their own business. I have a policy to never say anything negative about
22 Business Franchise Australia
my competitor and simply focus on what I can do better in our business. I mentioned early about giving away free samples for your launch. You should also look at being generous with all your promotions. BOGOFS (buy one get one free) are a good way to promote your product as you are getting another new customer to try the product. A discount of five or 10 percent off is just not enough to make a difference. Deliver on what you promise. If you can’t, make sure you give out a free card and an apology when it happens. We have a guarantee in every store. If we do not deliver, we give a free product to compensate. Always give your customer a reason to choose your business. Below are some MUST HAVE policies in the store. • If a customer orders a product and for some reason you cannot give it to them, (because you run out of a raw ingredients) then give them an alternative product for free. • If the customer waits too long.... (for us, six minutes), give them a free card for their next visit.
• If for any reason the customer is unhappy with the product, change it with a smile. You will be surprised how quickly these simple ‘customer focus’ techniques get around to other customers. These things make Boost what it is. If you can find something you are passionate about and love, then it is not work. Finding the right business is as hard as knowing what you want to do for the rest of your life when you are 16 years old. I am 45 years old and I am still working it out! Janine Allis is Managing Director of Retail Zoo, holding company of Salsa’s Fresh Mex Grill and Boost Juice and the Founder of Boost Juice Bars. Boost is now in more countries than any other juice bar in the world and Salsa’s is now franchising. For more information contact Retail Zoo franchising sales at: Phone: Email: Web:
03 9508 4400 aussiefranchising@ boostjuicebars.com www.boostjuice.com.au and www.salsas.com.au
Be part of the SUCCESS © Copyright 2011 Hunter Douglas Limited [ABN 98 009 675 709] ® Registered Trade Marks of Hunter Douglas Limited. C9871_07.2011
Opportunity to create your own successful business as a licensee for the market leading brand LUXAFLEX® Window Fashions
• Run your own business with the support of a proven program
• Industry leading showrooms, custom designed for your location
• Security of having the world’s leading window covering business behind you
• No inventory holding, fully made to measure products
• Extensive consumer advertising and marketing program to drive your business
• Prime marketing territories nationwide in city & regional areas
• Large collection of business, marketing, web & training resource tools
• Join the winning team of over 75 LUXAFLEX® Galleries nationwide
• Training provided, window coverings experience not required
To find out more about becoming a LUXAFLEX® Gallery dealer contact Mark Futeran on 02 9638 8000 or email: email@example.com
PROFILE : midas
KNOW WHERE YOU STAND MIDAS’ NEW HONESTY AND TRANSPARENCY STANDARDS
idas has seen its share of ups and downs over the last few years. However, under the successful leadership of CEO Tim Hickey, Midas has strengthened their position in the marketplace and now has its sights firmly set on growing the size of its Australian network to become the premier car service and repair provider in Australia. Midas is now looking to attract new franchisees with three primary initiatives: 1. Offering the most successful company owned stores at attractive prices. 2. Targeting key ‘greenfield’ sites in prime locations. 3. Identifying high growth corridors and making these territories available to new franchisees. CEO Tim believes that the combination of these strong business opportunities and the clear company vision will provide a winning formula to the right franchisees. “We decided that to be successful and really differentiate ourselves in the market place, we would have to strive to deliver honest, transparent car servicing to every customer, every day. “That remains our mission and to indoctrinate this into how we operate, we as
24 Business Franchise Australia
a team, have committed to a ‘know where you stand’ culture, which applies to not only customers, but employees and franchisees as well,” remarks Tim. Tim adds, “When you consistently treat franchisees with honesty and transparency and they know you are passionate about building their business and growing the brand, you soon become one team. You can, and should, demand complete honesty and transparency from your franchisor.” With Midas standing behind their new pledge, the company is on its way up, having recorded outstanding growth in the last 18 months. But, as Tim proclaims, “To continue growing, we need to attract the best people in our industry to join our brand. As such, we are offering outstanding value on new and existing Midas stores to the right candidates.” One such candidate acquired his Midas franchise just this year. Matt, owner of a Hornsby franchise, commented on his Midas experience. “I started with Midas in 2011, finishing off my last two years of apprenticeship with them. I always wanted to own and run a mechanics garage. I looked to open up independently, but after having a chat with Glenn (COO of Midas), they had agreed to
a good price for a Midas franchise. It was a great offer. I knew the processes and knew how the Midas system worked. “The biggest benefit is the constant feed of work, national advertising and marketing campaigns, support from the field support centre and the brand name that helps generate business, both repeat and new. Plus, support for running the business is always on offer,” notes Matt. Along with the new company philosophy and the three new initiatives to attract potential franchisees, Midas has also begun an ambitious program of re-imaging all of their stores over the next 18 months. In 2011 alone, Midas will be upgrading the look of 20 stores. This will not only enhance the look of these specific sites, but add value to the Midas network and brand as a whole. From CEO Tim’s perspective, “Midas is a fabulous, well-known brand that is supported by one of the best franchise teams in Australia. Throw in a big dose of passion for excellence and a clear path to growth and we are an irresistible force.” For more information on becoming a Midas franchisee, contact: Phone: 1800 815 526 Email: firstname.lastname@example.org Web: www.midas.com.au
Tired of being a passenger? Jump into the driver’s seat with a Midas franchise.
Turn Key Business: Midas is one of the most successful brands in the automotive industry, providing a complete set up for you with total systems and support. All you need to do is focus on your customers and running your business. We set it up, you turn the key. Advertising Power: You’ll be part of a national brand, using TV, print, radio, local area marketing and a strong CRM loyalty program. In 2010, over $2 million was spent Australia wide. Greater Buying Power: Unlike many other franchises, we pass the savings directly on to our franchisees. Ongoing Business Support: We’ll get you started, and then provide ongoing one-on-one support, as well as access to our proven systems, training, and technical support. Our Vision? We’re bringing transparency and trust back to the automotive service industry. Equipped with all the extras: You’ll get a national Midas phone number, a Midas website with a customised online presence, referral tools, PR, mentoring program, a eld support centre, corporate uniform package, environmental and OH&S management program, plus more.
12 month return on your investment: We’ve identied our company stores with the highest growth potential and are making them available for franchise. If you take up one of these stores before September 30, 2011 we’ll offer you the store at a sale price that matches the yearly prot. This means you can recover your investment after just 12 months. In short: • 12 month payback • High capital appreciation potential • High visibility locations • A large number of recently renovated stores • Sydney, Melbourne, Brisbane and Perth locations available only. If you’re passionate about customer service, committed to success, willing to follow a successfully proven system, prepared for an investment of 150-250K, and are keen to get started right away, then start your engines and let Midas get you on the road to success.
Contact Franchise Enquiries FranchiseEnquiries@midas.com.au 1800 815 526 www.midas.com.au
Business Franchise Australia 25
PROFILE : r p v en di ng
RP Vending Systems
Giving you time for the things you want to do while still reaching your financial goals Break away from the long hours and spend time enjoying your life.
any people find that the typical nine to five work schedule is too restricting, as they feel it doesn’t give them enough time to do the things they truly love and enjoy. RP Vending Systems helps people break away from these restrictions with a business that allows its owners the flexibility to set their own work schedule and spend more time doing the things they love. Denise is a perfect example. Before Denise had a vending machine business, she was in a job working long hours for a company, with all the stresses involved with managing and organising staff. This provided little time for Denise’s passion of horse riding. Having competed successfully throughout her life in polo and cutting, Denise was keen to find more time to return to the sport she loved. “I wanted more freedom and my weekends back to return to my passion of horse riding.” Denise, who now owns a successful RP Vending business with over 16 machines, loves how her vending machines provide her with the flexibility to juggle her busy life and still achieve all her financial goals. Denise has since been able to return to her passion of horses and has recently taken up the sport of reining. Beyond providing flexibility and extra time to do the things you love, an RP Vending Systems business has a sound business model
26 Business Franchise Australia
ending nise att
that gives owners the ability to reach their financial goals. According to Denise, “This is not a get rich quick scheme, it is a genuine business that will replace your job.” This is a business that responds to committed work. As Denise states, “The more effort and thought you put in, the more results you see.” Denise has been happy with the service and support she has received from RP Vending Systems, particularly when the floods hit Queensland earlier this year. “After the floods, I was unsure how much assistance I would receive. This is why it was such a relief to get support from the
a nd he
insurance organised by RP Vending Systems. Those floods could have set my business back years, but luckily everything was up and running again after a few months.” Since purchasing the business, Denise has been able to shed strict work constraints and now has more time to pursue the things that really matter to her. To find out more about running a vending machine business with RP Vending Systems contact: Phone: 1800 066 112 Web: www.rpvending.com.au www.freevendingmachines.com.au.
HOW SWEET IT IS! Over 1200 independent business owners know just how sweet it is to be part of Australia’s greatest vending success story!
• Be your own boss and control your future • Boost your income in a safe and simple excellent cashflow business • Over 40,000 machines nationally and the largest network of business locations for your ongoing support • Over 2,000,000 people per day have access and enjoy convenience from an RP Vending machine • Start your own vending business from as little as $9,000 • What other business requires only 10-12 hours per month work? Consistently gives 30 to 70% returns and is nationally advertised for FREE • With over a decade of remarkable success we can get you started in quite literally Australia’s greatest business - RP Vending
1800 066 112 AUSTRALIA AND NEW ZEALAND WIDE
www.rpvending.com.au VISIT US AT: THE MELBOURNE FRANCHISING & BUSINESS OPPORTUNITIES EXPO
MELBOURNE CONVENTION AND EXHIBITION CENTRE 19-21 AUGUST 2011
Business Franchise Australia 27
l eg a l a dv ice
for your franchise business
hen entering into a franchise business, new franchisees will expect to undertake some training in the operation of the franchise system into which they have entered and to provide induction training to new staff. It is, however, important that the training not stop there. In operating a franchise, you are operating your own business. It is critical that you take advantage of ongoing training opportunities provided by your franchisor, and external training providers, for both yourself as a business owner and your employees.
Considerations when choosing a franchise When choosing a franchise to enter into, consideration should be given to training offered by the franchisor, whether voluntary or compulsory. This will be particularly important for prospective franchisees without prior experience in operating a business and who may need some additional support. Some franchise systems will, prior to any formal franchise offer being made, require prospective franchisees to undertake the franchisor’s training program. Such training will often be at the prospective franchisee’s own cost and may take place at times that will preclude the prospective franchisee from being able to work while undertaking training. What’s more, there is no guarantee that the prospective franchisee will be offered a franchise following the conclusion of the training. An essential component of any franchise system is the operations manual. It is important that you familiarise yourself with the operations manual of your franchise. The first day of training should not be the first day you open your operations manual, as this will mean that the opportunity to easily raise queries will pass you by. In many
28 Business Franchise Australia
cases, a failure to properly understand and follow the operations manual of the franchise system will be considered a breach of the franchise agreement.
Ongoing franchisee training Your own training should not be limited to operational training. Particularly when entering into your first business, there will be new business skills to be learned. Even for those with experience in business, there will be new skills to be learned or old skills to be refreshed and updated. Many adult education providers offer training in skills such as using accounting and bookkeeping software packages and general computer skills in using programs such as stock control and preparing and working with spreadsheets. Government departments, law firms, accountants and other professional groups also provide invaluable training on topics such as employment and consumer law obligations and tax. Such providers often provide free subscriptions to newsletters and other updates to enable you to be aware of when changes to the law take place.
Employee training For most franchises, employees are the face of the business. They have the ability to either contribute to the growth of your business or turn customers away. When training employees, it is important to look beyond ‘the basics’ such as operating the cash register and to provide training on interactions with their colleagues and your customers. Better-trained staff will improve performance and quality, which in turn will reduce wastage and costs and ultimately increase your profitability. Under your franchise agreement, you may also have obligations to ensure that certain key staff of your business satisfactorily complete any initial and ongoing training
programs provided or arranged by the franchisor. You may be penalised for breaching your franchise agreement if you fail to provide and pay for your employees to complete such training.
Health and Safety Business owners have obligations under occupational health and safety legislation to provide employees with a safe working environment. In addition, businesses face public liability and brand damage in the event of a customer accident. Particular attention should therefore be given to providing appropriate training to staff on identifying and managing risks and hazards as they arise. Any food-based franchise will need to ensure that all employees have the necessary skills and knowledge to handle food in accordance with state government and local council food safety requirements. This requirement may be accompanied by a need to nominate a food safety supervisor who has accredited qualifications in identifying and preventing food hazards and supervising other people handling food.
Equal opportunity and human rights Obligations also exist under federal equal opportunity and harassment legislation, as well as in each Australian state and territory, to provide workplaces that are free from harassment and discrimination. In Victoria, amendments to the law will soon provide for a positive obligation with the effect that employers take reasonable and proportionate measures to eliminate discrimination or harassment as far as possible. Inherent in this positive obligation is a need to provide staff and managers with appropriate training on identifying where discrimination or harassment arises, and the procedure to be followed to address a problem should such incidents arise.
In many cases, employees’ actions in the workplace, when representing their employer’s business, will be treated as being the actions of their employer. This is referred to as ‘vicarious liability’. In defending any claim of vicarious liability against a business, the courts will look not only to what policies and procedures exist in a particular workplace, but also what training staff received on expected conduct and how consistently the policies, procedures and training in that workplace were enforced. Training of employees must, therefore, not be limited to induction training but should be updated and refreshed on a regular basis. This may be done at times that are topical, for example, prior to the annual workplace Christmas party is the ideal time to retrain all staff on alcohol and drug policies as well as harassment and bullying policies.
Accredited training options Accredited training provides an opportunity to have an external training provider educate your staff in skills such as up-selling and product knowledge. These skills are focused on maximising opportunities in each
customer interaction, as well as increasing productivity. The possibility for employees to obtain an accredited and recognised qualification contributes to the recruitment and retention of better quality staff. Government funded incentives for employers provide financial reward for providing staff with training opportunities. When choosing a training provider, choose a provider that has both state and federally funded training places, so that governmentfunded incentives paid to you are not then paid over to the provider. Also, seek out a provider with trainers that have experience in your industry and understand the particular challenges of your workplace. When implementing accredited training programs, do not limit access to this training to those eligible for the highest employer incentive payments. The best results will be achieved when all staff are able to participate in training and work towards common goals.
Conclusion A successful franchise should have an
ingrained regime of training and retraining that is directed not only to staff, but also the continuing development of the franchisees themselves. When embarking on a franchise business, take time to consider any training that must be undertaken as a requirement under your franchise agreement, as well as training that will increase the skills of all people that contribute to the success and profitability of your business, including you. This article was co-authored by Katie Sweatman and Esther Gutnick, Associates at Mason Sier Turnbull, a law firm renowned for its franchising law expertise. Located in Melbourne’s industry heartland, Mason Sier Turnbull has strong commercial law skills and provides clients with sensible business solutions. For more information, please contact Katie or Esther at: Phone: Email: Web:
03 8540 0200 email@example.com; firstname.lastname@example.org www.mst.com.au
Business Franchise Australia 29
focus : T PR G ROU P e xpert ADVICE
NARELLAN BEAUTIFUL POOLS – BIG OPPORTUNITIES
ince 1971 Narellan Pools has been bringing customer dreams to life throughout Australia. Now, with 40 years’ experience developing the best products, processes and brand - and getting it right for their customers and franchisees, they’ve embarked on the next chapter in their remarkable growth story. Narellan enjoy an unparalleled level of franchisee satisfaction and an extraordinary customer satisfaction rating. Not only do they treasure this reputation, they are leveraging it with their growth plans. Narellan recognise that their future is underscored by the continued success of their franchise community. They have long invested heavily in developing best practice franchise support solutions, marketing and brand development, sales initiatives, along with training and leadership and development, to ensure their franchise
30 Business Franchise Australia
system is regarded as the benchmark. Manufacturing thousands of pools annually, building and creating customer dreams for over 20,000 families through the years, and with enterprise revenues exceeding $75 million annually, Narellan enjoys the strength of all that experience as well as a national network of 30 franchisees operating in 70 territories. Although they continue to grow, they can proudly boast that many of their franchisees have been a part of the franchise community for over a decade. A community of people who are, each and every one of them, Australian for pools. Narellan exports to over 15 foreign markets and are currently working with partners in major global markets to license their manufacturing technology. With two manufacturing plants in Australia, and a third in planning, Narellan are setting
the benchmark in product, manufacturing, production technology and product innovation. Narellan has been building the world’s best practice franchise model because they believe if they are challenging the model, breaking the mould and striving for improvement and innovation – their franchisees will be motivated and excited to do the same. Narellan is a contemporary brand, wholly focused on promising and producing world’s best practice products, services and solutions. A brand which delivers professional services in response to modern day consumer needs. It’s an extremely rewarding role and capacity to work in, emotionally and financially. Narellan hasn’t forged such a strong reputation without an extraordinary amount of hard work by equally extraordinary people.
country, using empirical data to determine the propensity for pool purchasing in locations nationally. Weighed against a matrix of geodemographic data and business metrics, Narellan has established sustainably profitable franchise business models. These are based on historical trading and profit benchmarks. The result is franchise opportunities in metropolitan and regional centres nationally. These opportunities are scalable to meet the resources, capability, experience and aptitude of suitable prospective franchisees. Narellan work with and support incoming franchisees in an extraordinary number of ways, including providing highly competitive vendor financing terms to approved purchasers (TAP). Narellan is looking for people who have the will, the passion and the commitment to reflect our brand’s vision, mission and the values the company maintains.
Everything Narellan does is framed upon a growth strategy which, based on the world’s best and most loved pools, is focused on relentlessly achieving improvement in franchisee sales, revenue and profitability. A focus inextricably aligned with achieving and maintaining a ‘without peer’ customer satisfaction rating. Narellan boasts tools that most organisations only dream about. The company is constantly challenging those tools to improve franchisee’s expectations and thus their customers satisfaction. Including the fact that our franchisees now enjoy full-time business coaches as a cornerstone service of the support they enjoy. At Narellan, we’re continuing the growth of Australia’s best and most loved pool brand through the growth of the individual family businesses, which constitute our brand community. Narellan has invested in analysing the market and mapping the
Narellan enjoys one of the strongest brand positions in our segment nationally. Nationwide consumer research (Jetty Research Feb/Mar 2011) results confirm Narellan has one of the highest rates of prompted recall of any such brand in Australia. The company is leveraging that in impactful ways by developing brand and sales in a local area context. Bringing international brand marketing strategies, initiatives and campaign experience to local area implementation. Everything Narellan does is executed locally to drive tactile outcomes including enquiries, leads, sales and ever-increasing brand recognition. It is about ensuring every one of their franchisees is recognised in their communities as being and representing what is Australian for pools! All campaigns and programs are supported by the strongest possible calendars of specials and supplier promotions. Marketing initiatives include non-stop, year-long schedules to drive sales, grow business
and deliver sustainable and ever-growing profitability. As a Narellan franchisee you are a member of a growing community of successful and longstanding family owned businesses. You are an integral part of a group of people who are absolutely committed to the Narellan brand and to the continued growth of the businesses. Franchisees are also entirely committed to customer service and delivery. Being a part of this amazing brand means that you enjoy the tactile support along with the fraternity and camaraderie from within the group. You also benefit from the vast business, financial, operational and marketing expertise coming from the franchisor and our national support offices. Your business is spearheaded by senior executives; people with an extraordinary amount of experience in all areas of industry and business. You also receive valuable mentoring from the team of Franchise Business Coaches. These professionals’ sole focus and obligations revolve around the development and growth of your business. So you see, Narellan isn’t just Australian for pools; it’s Australian for one of the world’s best franchise systems too. Everyone at Narellan are firm believers in the proposition that they bring customer’s dreams to life. Narellan is also absolutely committed to the fact that continued success will be built upon bringing perhaps an even more important dream to life - yours. Being a licensed builder is not a qualification of ownership, but passion, determination, business acumen and experience, together with a commitment to the customer, to our vision, mission and values and to building a service oriented business around profitably delivering on customer dreams is imperative Stop imagining and start acting on making things happen. Please contact Andrew Bain at: Phone: Email: Web:
0447 242 940 email@example.com www.narellanpools.com.au
Business Franchise Australia 31
E X PERT A DV ICE
Stake your claim in the online space Creating a social media campaign
e all know the retail world is changing. Consumers can now find out what they want to buy, where from and how much they will be paying with a few clicks. A study by market research firm, Colmar Brunton, found 66 per cent of consumers search online for a better price, with 40 per cent of Australians shopping online ‘a significant amount of the time’. As a franchisee, you may feel you are losing sales with more people choosing to buy online, so what can you do to increase foot traffic? Creating a specialised online campaign that resonates with target audiences can turn followers into spending advocates through the use of online tactics. As franchisees, you may be restricted in what you can do with online marketing, but you have the advantage of running targeted
32 Business Franchise Australia
marketing within your geographical area. Depending on your situation, you can use social media to put your business on the ‘local’ online map.
consumers. This interaction provides the ideal platform to tap into the most effective way of selling a product – peer to peer and word of mouth marketing.
Franchisees, depending on franchisors rules and regulations, can be involved and be the driver of social media for the purpose of connecting with their audience. It helps brands achieve a balance between entertainment and education, satisfying a consumer need without the need for over the top promotion.
Franchisees can use this tool to research their target audience and find out what they are interested in. This then provides a lead for a franchisee to understand how they can become part of the conversation, providing real genuine content that consumers will want to engage with.
Best places to start
Some things to remember when you’ve set up your page:
Facebook is the leading contender of social networking sites and receives 25 percent of traffic on the internet. The potential consumers of a brand are actively participating in social media, providing the perfect opportunity for a franchisee to form direct relationships with
Facebook has an easy step-by-step process for setting up a business page.
• Be consistent. Don’t overload your fans with useless information, but do update your page regularly. When you do update, make sure there is value to the content. Ask yourself, ‘Will this add value to my customers?’
“With social media, always remember, if the content does not generate conversation, there is no social content campaign.” Josh Frith, Managing Director, The Dubs.
• Have a personality. Fans want to know there is a person behind the computer screen. Instead of always posting what’s happening in your industry or with your competitions, why not add a quirky anecdote about something that happened at work that day. Fans will appreciate the honesty.
users. They can claim these offers when they check in to your venue. This can be anything from a discount to a free gift with purchase.
• Reply to feedback. This means both negative and positive feedback. Don’t get emotionally involved with negative comments. Try and help your disgruntled customer, but don’t get pulled into an argument.
As a venue owner, to make sure you are getting the best possible return on investment (ROI), make sure to check your venue stats dashboard which allows you to track foot traffic from customers.
Twitter is about the human element. If your tweets come across as marketing ploys or if they are really promotional, followers will see straight through you. To keep your followers, and gain more, have an honest and interesting personality. You want followers to recognise there is a real person behind your tweets. When tweeting about your business, make the information something useful. You can give advice, notify followers of specials or even give your opinion of a major news story of the day. People are less likely to switch off if they find what you’re saying interesting. Remember that it is a two-way conversation. You need to listen and keep on top of what is happening within your industry space and with your customers. Reply to people who have taken the time to write something to you and answer their questions. Even if it has nothing to do with your business and is simple as, ‘What are you doing today?’ Twitter is a community and within a community there is always give and take. Foursquare is essentially a social media application which allows users to check-in to a location to let their followers know where they are. As a ‘venue owner’, Foursquare allows you to attract new customers and reward loyal ones with specials offered to
Users can become ‘mayors’ of a venue. Mayors are people who have checked into a venue the most in the last 60 days. Creating a reward or special for new Mayors is another way to attract repeat business.
With social media, always remember, if the content does not generate conversation, there is no social content campaign. Just because something is uploaded on Facebook or Twitter does not automatically make it a social content campaign! This is why it is so important to get the content right. Blogs are a great way to let people know more about your area of expertise. You can set one up for free through a number of sites. But before going down the road of a blog, ask yourself, do you have something interesting to say within your industry? A blog can’t just be on a whim, you need to pick a theme and stick to it. If you are a fashion retailer, this could be along the lines of blogging about fashion trends. A health food franchisee could keep followers up to date on developments in the health food industry. Blogging should be seen as a regular activity. Once you stop blogging, you lose your faithful followers.
The five key elements to social content 1. Research, research, research – Use social media to research what your target audience are interested in. There is no point spending hours creating content that your audience won’t engage with.
2. Keep your content authentic – Make sure your content is genuine and tells a real story that will engage your audience. Avoid anything that is overly promotional. 3. Keep your concept simple – Brands often fail by trying to over-complicate the content. A simple, easy to follow story line, that can be viewed and understood quickly, will have more chance of succeeding. 4. Keep your content short – There might be a lot to say, but keep it short and draw your viewers in quickly. Include the hook to the story in the first 10 seconds and keep your content to a maximum of one minute 15 seconds. 5. Keep it conversational – Understand who your target audience is to develop a tone that your audience can relate to. Avoid a corporate tone, as this style is out of place on social media. This may seem like a whole new way to market your business, but be assured it is an effective way to keep your business in front of customers. Once you have thought your strategy through, don’t be afraid to dive-in and make the most of the online world’s marketing potential. Josh Frith is an expert in digital strategy, next generation web, video marketing and advertising. He creates environments that inspire audiences to interact with brands by connecting them with the brand’s story. The Dubs is a digital engagement agency with 15 years’ experience. The Dubs creates environments that inspire audiences to interact with brands by connecting them with the brand’s story and each other. For more information contact The Dubs at: Phone: (02) 8247 8700 Web: www.thedubs.com
Business Franchise Australia 33
PROFILE : bra zilian butterfly
SPREADS ITS WINGS A
fter working in the beauty industry for more than 15 years, Tanya Farrar identified a unique marketing opportunity – to develop a business model that would specialise in and provide a total body care experience for men and women. Armed with plenty of experience and enthusiasm, Tanya opened her very first Brazilian Butterfly salon in Richmond, Victoria, in 2002. Almost 10 years after opening her first salon, Brazilian Butterfly has successfully grown to 22 franchise salons in Victoria, Queensland and the Australian Capital Territory. Today, Brazilian Butterfly is ready to spread its wings all over Australia, aiming to open new salons in every state in Australia over the next three years. Tanya believes that central to the business philosophy is a commitment to providing exceptional customer service in a fun, energetic and professional environment. Tanya takes enormous pride in the Brazilian Butterfly brand and together with her husband of almost 20 years, Managing Director Scott Farrar, they are committed to seeing a salon open in every state in Australia. Tanya also takes great pride in the opportunities that the Brazilian Butterfly brand has offered to women, enabling them to own their own business, with support
34 Business Franchise Australia
and guidance, within a structured franchise formula. “My aim was to develop a unique brand that would own the ‘Brazilian waxing’ and hair removal category,” Tanya said. “I had the vision that Brazilian Butterfly would be successful in the mainstream market, and the success and growth of the business is a credit to the passion and drive of the franchisees. “At Brazilian Butterfly, we continually reinvest in the brand. We manage a national marketing program that continually supports our franchisees, we are constantly looking at introducing the next new great product and we show enormous support to our franchisees.” Tanya is proud of the business that she created and that her franchisees’ have built. The franchising journey began for Brazilian Butterfly in 2004, when a loyal customer of the Richmond salon pleaded with Tanya to become a franchisee. Amy Shakespeare opened Brazilian Butterfly Knox and has established herself as the best performing franchisee in the network. “I first went to Brazilian Butterfly when I was given a gift voucher for my birthday,” Amy said. “When I walked into the salon, I couldn’t believe the efficiency, style and character. Immediately, I said to myself, “I want to own
my own Brazilian Butterfly”. I demanded to speak to the owner of the salon (Tanya Farrar) and told her I wanted a franchise. I met up with Scott Farrar the following week and my journey began.” Amy still has the same passion for the brand seven years later and wants others to join the Brazilian Butterfly team. “Just do it! If you think you have the passion and drive, don’t let anything stand in your way,” Amy said. “You’ve got to have a ‘can do’ attitude and be prepared to overcome the obstacles. A lot of people believed that I couldn’t achieve what I have. With the support of Brazilian Butterfly, a great family and a positive attitude, I’ve been able to prove those doubters wrong,” she said. Brazilian Butterfly is looking forward to hearing from the next franchisees to help the brand spread its wings all over Australia. To make a franchisee enquiry, please follow the links at: www.brazilianbutterfly.com.au
We’re spreading our wings all over Australia.
Ever dreamed of owning your own business? If you’ve ever dreamed of owning your own business, and would prefer the security and experience of one of Australia’s fastest growing franchises behind you, then here is the business opportunity you’ve been looking for. We are now looking for passionate franchisees to join us throughout Australia. Visit www.brazilianbutterfly.com and click on the Franchising link, or email firstname.lastname@example.org
e x pert a dv ice e xpert ADVICE
IN RETAIL, IT’S NEVER JUST ONE THING!
See your projects through to completion etailplanners, a company that assists its clients to maximise their return on inventory investment and selling space, recently completed a major project for a client who is a member of a large buying group.
to ensure the retail offer was as strong as it could be, the end result was going to be significant.
The client wanted to undertake a major extension of its existing selling space, introduce extended ranges of merchandise, improve merchandising standards and lift customer service standards by recruiting and training new staff.
When all was said and done, the key to this project for Retailplanners was ensuring that the customer had a more enjoyable retail experience than they had experienced in the store previously.
What a fantastic project to be involved with! Whilst there was a lot of work to be done
36 Business Franchise Australia
Like any project, the most important aspect to get right from the beginning was the planning.
In the current business, the product range was squeezed into a small area and was badly merchandised.
The plan The building was to be expanded by 100 per cent, providing an additional 500sqm of space. In addition, new fixtures would see an increase in available modules for merchandising by 120 per cent. The process for Retailplanners was systematic: • complete a site visit and inspection • gain an understanding of the business • develop all the necessary plans, as well as the necessary merchandising guidelines to improve merchandising standards.
“There are no shortcuts to be taken to achieve the outcomes you were looking for at the beginning of the project. A project schedule needs to be a focus throughout the life of the project.” Bob Way, Managing Director, Retailplanners.
• complete a project schedule providing for all of the key components, including training of new staff and marketing activities • use the project schedule to help launch the business upon completion of the extension and refurbishment This project schedule included provisions for activities that were beyond the scope of the design brief. However, it is important to launch a new store in the local community with the objective of: • communicating with existing customers • generating new customers • increasing the average sale per customer • generating more sales and gross profit A short time after Retailplanners completed the project, the owner of the business was contacted to gain an understanding of the results the business had enjoyed since the project was finished. Given the increase in selling space, product range, fixture capacity and staffing, you can imagine my surprise when I was informed that the store was trading just a little over 15 per cent up on the same period the previous year. From my experience, my expectation had been that the store would be trading somewhere in the vicinity of 30-50 per cent up on the previous year. From my perspective, there didn’t seem to be any reason to suggest that the store should not be showing significant increases in sales. It had more retail space, carried a more expansive product range and was merchandised to a superior standard. As the discussion progressed, items were ticked off the project schedule; the completion of fixture installation, the merchandising of the shelves, the product range and the assistance from supplier
representatives in training staff in regard to the new ranges of merchandise. All these steps had been completed. However, what emerged was the following: • The new staff had been trained in the new products, but the existing staff hadn’t been trained because they were too busy serving customers. • The opening launch events, to celebrate the opening of the new store and to attract new customers, were deferred for a combination of reasons; one of which was that everybody was tired after all the months of work on the new expansion. • The advertising campaign, which included a combination of local radio, local press and television advertising and execution of a public relations program, had all seemed to be too large a strain on the budget. It is fully understandable that a major project would have an impact on the performance of management and team members - everyone works long hours to achieve the desired outcomes of such a large project. The budget, too, is usually challenged because of the extra activities that often popup with a major project. However, all of this meant that the objective of meeting new customers expectations, generating a higher average sale transaction and growing sales and gross profit, was overshadowed by the failure to absolutely complete the project. This is a good reminder to us all that in retail, it’s not just one component of the business that you need to get right – it’s all of them. This includes picking the right site, ensuring you have the necessary retail space, having the right stock, merchandising it well, having energetic, passionate and trained staff and finally, marketing it to your customers.
There are no shortcuts to be taken to achieve the outcomes you were looking for at the beginning of the project. A project schedule needs to be a focus throughout the life of the project. All is not lost, however. A new store can launch at any time. Engage the community through local events. You can undertake some local area marketing. Kick start your public relations by contacting the local television and radio station and step-up the advertising campaign. You can bet, in the example given previously, there were many potential customers who didn’t know what a great job had been done to improve this business to a much higher standard. However, there is no time like the completion of the project to bring in the existing customers, as well as new customers, and get the community talking about your business. Retailplanners Managing Director, Bob Way, has spent the past 35 years in the Retail Sector. Bob has earned his experience across the corporate, store operations and buying divisions of some of Australia’s largest retailers. Retailplanners is a business that assists its clients to maximise their return on inventory investment and selling space. An integrated retail consulting business, Retailplanners has been providing merchandising and retail advice and services to some of Australia’s leading retailers for more than 25 years. For more information contact Bob at: Phone: Mob: Email: Web:
03 9763 7511 0418 109 929 email@example.com www.retailplanners.com.au
Business Franchise Australia 37
PROFILE : M ATCH BOX
MATCHBOX COOKING UP SUCCESS
atchbox is Australia’s leading kitchenware and cookware specialist, with stores Australia wide. An independent, family owned retailer, Matchbox does much more than simply supply products – they help their customers become professional home cooks through a fun and engaging in-store experience. Matchbox stores even have built-in working kitchens for cooking demonstrations and classes.
Matchbox Managing Director, David Cohen, believes now is the perfect time to join the Matchbox team, proudly stating that the Matchbox franchise system has now been listed as Australia’s second fastest growing franchise, according to BRW magazine. Matchbox is not only focused on growth, but knows the importance of each of their franchisees within the system. They are dedicated to supporting their new and existing franchisees. For new franchisees, they offer an initial two week training program. From there, franchisees are usually placed into existing corporate stores where they can spend anywhere from a few weeks to a few months in an actual store environment to get an absolute hands-on feel for how to run and manage the business. Once the franchisee has received the training needed, they are ready to open their own store. Matchbox is very particular regarding site selection and stores are almost exclusively located within shopping malls. So once the site is ready to go and the new franchisee is up and running, they can rely on continuous IT support, live and across the board. They also have access to dedicated full time field support staff. As for future plans, Matchbox is currently spending an extensive amount of time and money on repositioning and rebranding. Matchbox has done extensive market research and, based on the results, has launched a new look; including a new logo, new colours and a new in-store design.
David and Charles Cohen
38 Business Franchise Australia
One of the most exciting new features is the in-store kitchen. This allows customers to have a cooking experience, as opposed to just ‘browsing’. Franchisees have the options to do demonstrations themselves, or hire chef’s
to come in and do both demonstrations and cooking classes – using the products sold by Matchbox. For potential franchisees considering joining Matchbox, David states that the initial investment is quite high, ranging from $400,000 to $600,000 depending on the location. As such, potential franchisees should have a passion for the brand and the products sold, be willing to commit to the business model and be strongly involved in their local communities. With the initial investment, however, comes the opportunity for large returns. Matchbox earned in excess of $20 million in revenue in the 2009-2010 financial year, with each retail outlet turning over approximately $1.35 million. The company has recorded a growth of 148 per cent in the past three years (to June 2010). As the Managing Director leading this expansion, David Cohen notes that with such large growth, “We are looking forward to an exciting year ahead as we continue to capitalise on our strength and expertise in this market, with a view to opening our first two franchises in New South Wales and continuing our successful growth in Queensland and Western Australia.” Franchising since 2005, the Victorian based company now has seventeen stores within VIC, three in QLD and four in WA. If you are interested in becoming part of this fast growing franchise system, contact Kevin Bugeja, Franchise Consultant at: Phone: 1300 372 624 Email: firstname.lastname@example.org Web: www.matchbox.com.au
Join Australia’s leading cookware & kitchenware specialist – Matchbox!
Fantas tic sites availab le now!
Our successful franchise group has been recognised on the 2011 11 Fast Franchises list, polling 2nd fastest in Australia for growth wth in both revenue and number of outlets, jumping from 4th place in 2010. 2010 Matchbox currently has great franchise sites available Australia wide, including Queensland, New South Wales and Western Australia.
Our Secret Recipe: • Australian owned, franchising since 2005 • Proven business model with high net profit returns • Full training and support provided • National marketing program • Professional shop design with in-built kitchen • Large range of professional, well-known brands
r Registe yo u r t interes! today
Contact Kevin on 1300 372 624 or email email@example.com
PROFILE : JA M ES’ H O M E SERVICES
HOME SWEET HOME
Tony and Nikki Gr
James’ Home Services extended family
he true test of a successful franchise is not in its systems or procedures. Although these components form an integral part of the sound business structure. To know if a franchise system delivers what it promises, you need to hear from the franchisees themselves. James’ Home Services is proud of their business and committed to all of their franchisees 100 per cent. Just ask Tony and Nikki Groeneveld. Tony and Nikki purchased their James’ Lawn and Garden care franchise over five years ago. “It all goes back five years,” says Tony. “I was in a store management level position at a supermarket. I was tired of working ridiculous hours and working for a big company that didn’t take care of their staff.” Tony actually injured his back and was off work for three months. Tony and Nikki had an 8 month old son at this time. Tony said he was lying on the floor (because of his back injury) and his son crawled over to him. It was at this point that Tony realised he had been working so hard and so many hours that he hadn’t even realised his son had started to crawl. While this was happening a James’ Home Services ad came on the television. It was a pivotal moment. Nikki did some research on the internet and ended up sending an online inquiry to James’ Home Services and had their first sales consultation the morning after her inquiry. They were sold from day one. The immediate response to their inquiry, along with the professionalism presented at the first meeting convinced Tony and Nikki it was the
40 Business Franchise Australia
right path for them. The initial draw for the couple was the brand awareness with James’. They spoke with the Master Franchisee and other franchisees and confirmed that James’ was a proven system that worked. Tony said, “We went with James’ because it was a franchise that had support and training. We learned the practical skills to make our business successful.” The rest of the story is a whirlwind of success. Tony and Nikki have grown their franchise to three times its original size. They employ staff to help them manage their thriving business. They are both National Trainers and have plans to expand and grow with the company on a national level. Nikki says one of the great benefits of being with James’ is the network of people. “We have in-house referrals from other James’ Home Service franchisees and we help by referring as well.” Add to this the incredible support given by the Master Franchisee, the Regional team, the training staff and the franchisors themselves and it is a winning combination. Nikki and Tony have been recognised for their outstanding achievements – they have been an award winning franchise for the last five years and Tony has received the ‘Trainer of the Year’ three years running. Nikki sums up their belief in the James’ Home Services system by saying, “This will take us right through to retirement. It is not only a franchise that has its proven systems in place, but can be a lifelong career path.” Ray and Anne-Marie Micalleff are another couple who have found success and freedom through James’ Home Services.
Ray and A
The couple originally owned a retail shop. There was not enough work to keep Ray busy, so he inquired about James’ Home Services. Ray says, “I didn’t have a plan or goal originally, I just wanted something new to do.” That was six and a half years ago. Ray and Anne-Marie have since formulated a very strong plan and grown their franchise with the help of the strong management team and proven systems of James’. Ray states, “Day one I had six calls that turned into five sales.” That was the beginning. “We got rid of the retail shop after 12 months. We have a lot more flexibility and this business is so much more lucrative than retail,” says Ray. The couple has since bought the two neigbouring areas. They have five casual staff and do much of the work together as a couple. They are both thrilled with the support and encouragement they have received from everyone at James’. Ray and Anne-Marie both agree that being part of the James’ Home Services family is a long-term career. If you are interested in becoming part of a growing, professional, caring franchise team and are looking for not only a business opportunity, but for a long term career path, call James’ Home Services to book your consultation. If you are ready for a life change contact: James’ Home Services Phone: 1800 1 JAMES (1800 152 637) Email: firstname.lastname@example.org Web: www.jameshomeservices.com.au
Join Australiaâ€™s fastest growing home service franchise, and earn from $600 to over $2500 per week.
Interior House Care Window & Exterior House Care
Be part of the team and call James today on
1800 1 JAMES
Carpet & Pest Control Mobile Pet Grooming Mobile Car Cleaning Lawn & Garden Care
Capital required - 220K - 410K Number of outlets - 13+ Opportunities available - nationally
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Capital Required - 280K - 350K Number of outlets - 1 Opportunities available - nationally
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Capital required - 70K+ Number of outlets - 4 Opportunities available - nationally
Capital required - 150K - 350K Number of outlets - 650 worldwide Opportunities available - nationally
Capital Required - 250K Number of outlets - 1 Opportunities available - nationally
Capital required - 175K-195K+ Number of outlets - 8 Opportunities available - nationally
Capital required - 300K - 400K Number of outlets - 4 Opportunities available - nationally
Capital required - 350K - 400K Number of outlets - 80+ Opportunities - nationally/internationally
Capital required - 295K - 310K Number of outlets - 37+ Opportunities available - NSW, SA & VIC
Capital required - 99K Number of outlets - 12 Opportunities available - nationally
Capital required - 150K Number of outlets - 3 Opportunities available - nationally
BI M O LE
WWW.FRANCHISESELECTION.COM.AU PHONE 1300 FRANCHISE (1300 372 624)
CONNECTING PEOPLE TO OPPORTUNITIES CHOOSE FROM AUSTRALIAS BEST SELECTION
Capital requiredB-&S54,995 Sharp +GST le Number of outlets - 12 Opportunities - nationally/internationally en
Capital required - 250K - 600K Number of outlets - 40+ Opportunities available - Victoria and Master opportunities available nationally
Capital required - 250K - 400K Number of outlets - 7 Opportunities available - Sydney, Melbourne, Canberra, Newcastle
profile : fo rt y W i n ks
at FORTY WINKS
one size doesn’t fit all A ustralian branding icon, Forty Winks, is not a franchise system, it’s a family.
Established in 1984 by disgruntled owners of a rival franchised bedding retailer, Forty Winks has enjoyed a steady growth for more than 25 years, now boasting 90 stores across Australia.
The leading bedding specialist in the Australian market today, Forty Winks is blessed with franchisees who reinvest in the brand. Many of them are multi-store owners. Franchisees’ commitment to the brand is largely due to the fact that Forty Winks provides them with a unique formula that continually supports them on their journey to success. Forty Winks Chief Executive Officer, James Hayward, said the large majority of franchise fees were reinvested back into the business to support the stores with marketing and media. “The national support office operates as a not-for-profit business. We are driven and motivated by watching our franchisees grow their business and achieve personal wealth,” James said. “We have marketing and product committees, made-up of franchisees, who make a significant contribution to the decisions we make as a group. We listen to our franchisees and work with them, continually, to ensure they have the right product at the right price for their stores.
44 Business Franchise Australia
James continues by saying, “We work with our franchisees. There are no rules, only boundaries. Every store in every demographic is different and it’s important that we all work together to provide the right offering. “Communication is the key to the growth of Forty Winks.
“It’s humbling when we hear franchisees talk about Forty Winks as a family, not a franchise. That’s why franchisees want to Get into Bed with Forty Winks,” James said. Forty Winks franchisees’ agree. Theo Thanogiannis, together with his mother, father and two brothers, own three stores in New South Wales (Penrith, Castle Hill and Campbelltown). Theo and his family first became Forty Winks franchisees in 2006. He said that Forty Winks was an obvious choice for his family because of the support it received from the brand. “Forty Winks is a family and promotes family and community,” Theo said. “Forty Winks works with us at a local level to promote the brand to our community and to ensure that the products we offer support our demographic. “They provide outstanding support to ensure we are always ahead of the pack, including product exclusivity, infrastructure and consistent marketing, both nationally and locally.
“When my family decided to work together in business, Forty Winks was the strongest industry brand, nationally, and they embraced us into their family,” Theo said. David Williams started with Forty Winks six years ago when he opened the Prahran store in Victoria. He has since opened a further two stores in Fitzroy and South Wharf. David first came into contact with Forty Winks as a sales representative when he was in the Manchester and linen trade. “I always thought the Forty Winks business model was a good one,” David said. “The model allows franchisees to be involved in the decision making, which gives us the best opportunity to be successful. “To succeed in business, it certainly helps to be with a well-known and respected brand that is driven by maintaining relationships with its franchisees. Marketing, franchisor support and having the ability to localise the Forty Winks brand to our own demographic is what makes us successful. “At Forty Winks, one size doesn’t fit all,” David said. If you want to Get Into Bed with Forty Winks, contact James Hayward at: Phone: 03 9588 0044 Email: email@example.com Web: www.fortywinks.com.au
Get into bed with Forty Winks Secure your future
At Forty Winks, we donâ€™t just say weâ€™re the best bedding franchise around, we prove it. With exceptional brand recognition, great products, and an aggressive National marketing strategy that consistently drives strong sales, our successful franchise model has shown that we are able to stand the test of retail time. Our enthusiastic and driven National Office team provides comprehensive training programs and ongoing operational and marketing support, to guarantee our franchise family thrives. Take the first step to developing a successful future. To find out more about our unique and rewarding franchise model, go to http://www.fortywinks.com.au/forty-winks/ franchising.html or give us a call. We love nothing more than getting people in to bed.
Helena and Glen Blakeney Store owners from Nowra
For more information contact Forty Winks National OfďŹ ce phone (03) 9558 0044
PROFILE : G ARAG E WO R L D
for the long term G arage World and Shed Boss are renowned for an uncompromising attitude towards professional workmanship and delivering high quality, affordable steel building designs that fully comply with the Building Codes of Australia.
It is not only the product that matters, though, when considering buying a franchise. Garage World offers a solid, proven business system and continuing support to all its franchisees. Max and Andrea Grimmond are testament to the benefits of being part of Garage World. They purchased their Garage World franchise in 1990 and are still going strong. Andrea states, “We made the decision on Garage World because of the supportive and proactive franchisors. The initial franchisors had a passion and energy that was contagious! “We were excited by the prospect of joining a newly formed franchise that had only been
operating for 12 months and was growing rapidly. Their youngest son, Will Emms, is now Business Manager,” says Andrea.
As a couple, the two made a good business team. Max was a licensed builder and Andrea came from a desktop publishing background. Max’s building experience was the primary reason for choosing a building franchise and admittedly has been the catalyst for their success. Andrea’s publishing skills did help with marketing in the early days. However, Andrea states, “Most of the business skills we have today have been learned through lots of training, hard work and experience.” As such, Andrea now assumes the role of Business Manager for the couples franchise.
“What we like best is the fact that Garage World is a corporately run organisation, but still maintains support for the family run business. Our experience when dealing with the franchisor has always been proactive and respectful. This is helped by the fact that the current franchisor Business Manager, Will Emms, has owned and operated a Garage World franchise and understands the day-today challenges,” shares Andrea. “The other aspect we like is the wealth of knowledge within the network. To be able to pick up a phone and contact other franchisees around the nation (and also New Zealand) is a great tool to problem solving. There is generally always someone out there who can offer support on technical issues, business management ideas and even mentoring,” she says. Garage World does offer start-up training for new franchisees and Max and Andrea utilised this support early on. However, Andrea stated, “We believe in the importance of attending industry workshops and information sessions along with conducting formal training to keep up with industry standards, as well as good business practises.”
46 Business Franchise Australia
She goes on to reflect on the demands of owning a business by saying, “Like anything in life there are pros and cons and owning a business is very demanding. There are times when you work long hours and face many challenges. “It is always with you and the work/life balance can sometimes take a back seat, especially in the early days when starting out. As a husband and wife team we try not to talk work after hours… but that is not easy I can assure you! “However, the advantage of our business is that it has allowed us flexibility of work hours, which was so important in the early days with a young family. We certainly do spend more time together than most married couples and enjoy sharing a common vision,” says Andrea. “We can attend outside appointments and family commitments. We are home together every night. With the demands of a business, it is important to take time out for our own interests. The business has given us opportunities to travel and pursue personal interests.” As the business expands, Max and Andrea plan to continue to grow and strengthen their business to enable them to have a strong saleable asset for the future. According to Andrea, the best part of being with the Garage World franchise is, “The freedom to be the decision maker in what we do, but also having the backup support if needed. What I particularly love about being a Garage World franchisee is the great network of people I’ve gotten to know and respect.” For more information on licenses within Australia and New Zealand contact: Phone: 07 403 11911 or 1300 743 326 Web: www.shedboss.com.au or www.shedboss.co.nz.
YOUR CHANCE TO ENTER THE GARAGE AND SHED BUSINESS UNIQUE FRANCHISE OPPORTUNITY Join Australia’s most dynamic quality shed building network. Kit buildings from Shed Boss are in a league of their own and are proven best sellers. Economical entry to the shed and garage industry Patented systems make our sheds the strongest on the market Full support for design, engineering and building materials We are currently taking applications for new start-up operators. Prime territories are still available in most states. If you have experience in building, sales or marketing, with the capital and ability to run your own business, this could be the opportunity you’ve been waiting for. 1300 743 326 (1300 SHED BOSS) Or register your interest on-line www.shedboss.com.au Morinda Australia Pty Ltd ABN 34 082 051 287 Trading as Garage World and Shed Boss. A member of the Fletcher Building Group.
FR A NCHISEE INe xpert ACTION : W e t-se a l ADVICE
A WaterProofer that can Cook! Darling Downs Wet-seal franchise came up for sale. This was an existing franchise that was rated as the number one franchise in Australia for growth and sales. It was time for Andrew and his wife to take the leap and invest in their new life. They bought the franchise and as Andrew said, it was smooth sailing from that point forward. “As a new franchisee, you do five weeks training with Wet-seal. During this training period, they cover absolutely everything. You learn the technical side as well as sales and marketing. You experience working with all the different products.” Wet-seal has some great products, some of which are their most environmentally friendly products to date, and are forever developing new products as well.
n the franchising industry, you often hear stories of individuals who have made a smooth transition from working in a particular field as an employee, to buying a franchise in the same field and becoming their own boss. Every once in a while, however, someone comes along who completely shatters this pattern. Andrew Bridgeman is a perfect example. Andrew was a confident and successful chef, who had spent many years fully entrenched in the hospitality industry on the Gold Coast. Despite his success as a professional Chef, Andrew decided he needed a break from the high demands of hospitality. As luck would have it, his next door neighbour owned a Wet-seal franchise and was looking for some able hands. Andrew tells us how it all started. “I began working for my neighbour in September
48 Business Franchise Australia
2004. He taught me the ropes and I absolutely loved the work.” According to Andrew, he loved the job from day one. He liked the work, he liked meeting the clients and he liked the excellent products and service that Wet-seal provided to their customers. Andrew worked with his neighbour for around 13 to 14 months. Following this, he decided to go back into hospitality to gain some invaluable management experience. The plan was to get as much management experience as possible, while keeping an eye out for an available Wet-seal franchise. Nearly five years passed by. Andrew, his wife Katharine and their three children, were happy where they were living and did not want to relocate – so they waited patiently for the right franchise opportunity to come along in their area. Finally, in January of 2010, the Toowoomba/
“I knew a lot already as I had worked for over a year with my neighbour, but also learned so much during the training,” continued Andrew. Wet-seal provided Andrew with all the training and materials he needed to successfully take over the Toowoomba/ Darling Downs franchise. He stated that the support from the corporate office was outstanding. Andrew particularly enjoyed his interactions with Anthony, the ‘sales guru’ at Wet-seal. “Anthony always has loads of advice and precise ideas on how to chase new business and find new business,” chuckled Andrew. Wet-seal also has two regional meetings each year and a bi-annual National Conference. Some of these events are held within Australia and some are held overseas. Andrew said these were extremely beneficial from both a training perspective, as well as for networking with fellow franchisees.
Another component of the Wet-seal support structure that Andrew believes is vital is from the occupational health and safety side. Wet-seal provides continuous training to ensure all franchise owners and their employees have a safe working environment and know how to properly use all the equipment and products provided by Wetseal. When asked about other areas of support, Andrew said, “Right now, I have three lads working for me. If there is ever a time when one franchisee is too busy, if possible, other franchisees will work together and send some extra workers to help. It is more like a family, we all talk, we all have each other’s phone numbers. Everybody wants to do well and have their business grow, so we help each other.” Wet-seal was quite a life change for Andrew and his family. “I didn’t see my first lad grow up, but I have two more kids at home now. I am doing the normal parent thing now.” “Best of all,” says Andrew, “my wife has a waterproofer that can cook!”
We didn’t invent waterproofing…
We Perfected It! Where did Wet-seal start?
Why is Wet-seal so successful?
It’s not an original saying, but it’s certainly an appropriate one in the case of Wet-seal, the largest waterproofing company in Australia and New Zealand. The continued expansion of their franchise support team and an active involvement in production and distribution has seen them construct a custom designed and built corporate office in beautiful Coffs Harbour, New South Wales.
Wet-seal’s strength lies with its franchisee’s, professional and dedicated business owners that provide the best waterproofing and underfloor heating available. Independently operating in large geographic areas, franchisee’s get the opportunity to work in various places and keep fit and active in the course of their job. Over time, they build a business which, if they choose, they can sell for many times what they originally paid. Some franchises are currently billing over $1 million per annum and employ several staff!
Even in its humble beginnings in 1984, in a small shed in Coffs Harbour, on the New South Wales Mid-North Coast, the founders of Wet-seal saw the enormous potential to be realised if they could develop a system of waterproofing bathrooms and other wet areas that actually worked (a rarity in those days). The fact that they have now waterproofed over two million bathrooms is testament to getting it right.
Systems that make a difference The corporate office helps the franchisee control their accounts with systems that send out all the invoices and collect all the payments. This means that franchisees get paid twice a week! And all products are delivered to your door ready to go!
Business Franchise Australia 49
FR A NCHISEE IN ACTION : W e t-se a l
How good is the training? Part of Wet-seal’s progressive thinking is the emphasis on professionalism. A rigorous platform of manuals, training and proven systems allows franchisees the scope to build a successful business. The initial training program for new franchisees takes five weeks and covers all aspects of waterproofing using the Wet-seal system. Franchisees also receive comprehensive instruction in sales, administration, small business management and marketing. In addition, Wet-seal partner with TAFE to provide the franchisee access to the nationally recognised Certificate III in
waterproofing, which is quickly being seen as the critical qualification for any waterproofing work. In some states it is even becoming a mandatory qualification.
What about follow up and support? Training doesn’t stop at the end of the five weeks. Ongoing training and support is a vital part of the success of Wet-seal franchisees and a team of experienced technical experts are always on hand to assist with advice and guidance. With two regional meetings each year in your state or region to assist with technical
updates, product updates, building code changes or simply to have some drinks and dinner with the other franchisees, these forums keep you up to date and provide the ideal time to network with your peers. Wet-seal’s National Trainer will work beside you in your initial week and sales and marketing will be available for any follow up support you may require. With this fully comprehensive training program, along with the ongoing support and encouragement of the National Franchisee Manager, you can be assured that you have the resources you need to run your business and be on your way to enjoying your new career.
Quality The Compliance Officer for Wet-seal visits all franchisees to ensure that quality and brand are being maintained. This is a big selling point for Wet-seal customers! Maintaining a neat image and a clean vehicle, along with having appropriate signage and answering phone calls professionally, all add up to high levels of service. Wet-seal prides itself on being the industry leader in waterproofing and continually devotes itself to meeting all of its customers’ requirements, while supplying an extensive range of quality up-to–date guaranteed waterproofing and sealing systems.
How much does it cost? The entry price is very low for new areas. All you need is a white ute or van and you are away! Forget all those expensive leases on premises, this is a work from home opportunity! Not only is a five week training program included in the franchise purchase price, Wet-seal also pays for all travel and accommodation costs whilst you are in Coffs Harbour. The purchase price also includes tools, uniforms, a communication package, stationery, signwriting and start-up materials If you are considering a Wet-seal franchise, please contact: Phone: 1800 025 081 Email: firstname.lastname@example.org Web: www.wet-seal.net
50 Business Franchise Australia
RASHAY’S SUCCESS leads to new franchising opportunity Rashay’s Cafe & Restaurant, a brand that works Rashay’s Café & Restaurant is an Australian owned business that models itself on the principle of ‘food fast’, offering low to moderately priced a-la-carte menu items from a range of seafood, steaks, chicken, pizza, pasta and café meals. It embraces the systematic approach of fast food without sacriﬁcing the quality expected of restaurant meals. Rashay’s dishes are made from the highest quality Halal grain fed meats and chicken as well as top quality seafood products.
An excellent franchising opportunity Offering new franchisees an operation concept that challenges the major players in the fast food business. Despite the comprehensive ‘menuzine’, all Rashay’s menu items have been created in a manner to allow the preparation of many recipe ingredients to be done ahead of time. No experience in the food industry is required for franchisees, as all the training and systems are provided. Front of house and Back of house operations are also provided with comprehensive training and tools, as well as a well-branded ﬁt-out to ensure that the unique atmosphere and service can be recreated time and time again. Franchise opportunities currently exist in most locations in and around Sydney. Interstate inquiries accepted via expression of interest. Rashay’s have an experienced operations team to assist with set up, training and ongoing support. Rashay’s will provide full assistance to help choose sites and to negotiate site locations. Investment requirements starting from $300K+GST. For more information on becoming part of the Rashay’s family – go to www.rashays.com
Cafe & Restaurant
Signatu re D ish : Rasha a crea y’s chic m ken – c restau ra y mush room hick sa nt’s m ost pop uce has bee en ﬁ llet w ith n ula r dis hes fo r one of the ove r 12 yea rs
PROFILE : G EL AT ISSI M O
LIKE SELLING ICE TO ESKIMOS GELATISSIMO BRINGS GELATO BACK TO THE ITALIANS
elatissimo, Australia’s biggest gelato franchise, has gone back to where it all began in Florence, Italy, the home of gelato. Opening one of its trademark stores next to the Ponte Vecchio in Florence, Gelatissimo has become the first Australian gelato franchise ever to expand its operations and fly the Australian flag in Italy, where gelato was first produced by Bernardo Buontalenti in the 16th century. In an act akin to selling ice to Eskimos or coal to Newcastle, Gelatissimo has now come of age and is happily taking its place on the world stage, selling gelato back to its Italian originators. Since it began, as a small family business producing gelato over 20 years ago, Gelatissimo has achieved incredible growth. The successful franchise now operates in six countries, including 23 locations across Australia, 15 stores in four countries in Asia, and now Italy. The Florence store marks Gelatissimo’s first venture into the European market. It is particularly poignant, given that Florence provided the original inspiration for
52 Business Franchise Australia
the concept first launched by Gelatissimo in Sydney in 2002. Each Gelatissimo store recaptures the Florence gelato experience, incorporating Italian music and decor and, most importantly, freshly made artisan gelato ‘gelato artiginale’, into an authentic Italian experience. Gelatissimo gelato includes the finest ingredients, some of which are imported from Italy and some, like the fruit in its signature Mango sorbet, which are home grown. Domenico Lopresti, Joint CEO of Gelatissimo, says, “The original concept and idea for Gelatissimo in Australia came through the unique displays and popularity gelato has in Florence.” Domenico and his brother Marco, fellow CEO, have drawn not only from this Florentine concept, but also from their Italian gelato-making heritage. “For us now to be successfully selling our gelato to the Florence market far exceeds our wildest expectations,” says Marco. “We’ve come full circle. Our strict quality focus and Italian heart has put us in good stead to take the
Italians on at their own game.” For more information on joining this ‘cool’ franchise, contact Domenico Lopresti at: Phone: 02 8845 0100 Email: email@example.com Web: www.gelatissimo.com.au
PROFILE : Ju m pi ng J-Jays a n d St u fflers
HAPPY KIDS – GOOD INCOME NO OVERHEAD RENTAL BUSINESSES BRING IN CASH WITH
o how can you go into business and have no operating costs, like rent or staff? How about no franchise fees, like marketing and royalties, till you get sales? Well, there are not too many opportunities around, but John Newton, Founder of Jumping J-Jays and Stufflers, believes he has pioneered and developed two franchise brands that reward you for your hard work instead of rewarding others. Have you ever wanted to get to the next income level but your job will just not take you there? Does your partner want to give up work to spend more time with the kids, but you cannot afford the loss in wage? Are you wondering how you’re going to pay for that private school education or the next family holiday? The rental industry allows you to send a product out and get it back. The product comes back with little or no wear and tear and allows you to rent it out again tomorrow and the next day and the day after that! Kid’s parties, family functions, children’s
54 Business Franchise Australia
activities or school functions will always happen. Everywhere there are kids, there are opportunities for your business to evolve and MAKE YOU CASH. Stufflers and Jumping J-Jays are the perfect rental business. These two franchise opportunities allow you to make money by letting kids enjoy themselves.
Jumping J-Jays With Jumping J-Jays, you deliver all jumping castles in the morning and forget them. The parents at the homes will supervise and manage the kids. This allows you to be back at home with your own family. Dad can deliver and pick-up castles part-time on the weekend. Mum can then spend one day a week performing the local area marketing program.
Stufflers Bear Stuffing Stufflers bear making allows you to rent multiple bear stuffing machines. The pickups and deliveries are done on the Thursday before the weekend and the parents supervise
and operate it themselves. This gives you most weekends free to do the family thing. Stufflers suits mums who have two free days a week (midweek) to roll out the local area marketing program in their exclusive franchised territory. Both brands give you an amazing additional income. With Jumping J-Jays castles we guarantee you $100,000 rental turnover in the first year! Stufflers income depends on the amount of time you put into the business. Both are flexible and both allow you to keep your other job, if you choose. How easy is that? Part-time in the rental industry giving you BONUS INCOME that works for you, often multiple times a day and hundreds of times a year. If you are interested in either a Jumping J-Jays or Stufflers franchise, contact John Newton at: Phone: Email: Web:
0414 237 573 firstname.lastname@example.org www.partycastles.com.au
Guaranteed $100k sales in first year!
Jumping Castles Franchises
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Mobile Teddy Bear Making Franchises
made by you
This exciting new franchise was launched in Australia in 2010. Building on the successful VDOHVLQ$PHULFDQEHDUPDNLQJVWRUHV6WXIÃ€HUVLVDOODERXWPDNLQJVWXIIHG DQLPDOV DW NLGVÂ¶ SDUWLHV DQG HYHQWV XVLQJ WKH 6WXIÃ€HUV XQLTXH PRELOH PDFKLQH V\VWHP :LWKFORWKHVORYHLQVHUWVDQGVSHFLDOFDUU\FDUWV6WXIÃ€HUVLVWKHQH[WSDUW\SKHQRPHQRQ %HVW VXLWHG WR D VWD\DWKRPH FDUHHU GULYHQ PXP WKDW KDV GD\V SHU ZHHN available. Email: email@example.com Phone: 1800 788 335 Web: www.stufflers.com Be the first to secure an exclusive region!
E X PERT A DV ICE
“The best form of leverage is education.” Katherine Grace, Certified Platinum Level Business Coach
BE MORE EFFICIENT IN LESS TIME
re you in (or planning on being in) business and wondering why you ever thought it would be less work than being an employee? It’s a common misconception that when you are your own boss, you will naturally be a good, lenient boss. Actually, you can be the meanest, most slave-driving boss you ever had. Until you understand the meaning of leverage. Leverage is the key to being successful in any business and not having it drive you insane, ruin your health and impact severely on your personal relationships. It is what every entrepreneur knows and every exhausted, working-18-hour-days coffee shop owner doesn’t. Leverage is more important than money because with the extra time and mental space you create using it, you dream up and act on hundreds of new ways to improve your business and your wealth. It is even more important than profit, because it allows you the space to enjoy the money you have.
So, what is leverage?
Leverage is the action of using a lever to move more than you would physically be able to move alone. Just think of the age old image of the man using a stick to pry up a large boulder. In terms of business, it is the philosophy of using something to DO MORE WITH LESS. Generations Y and beyond are often criticised for being lazy. Whether or not this is warranted, one of their key benefits is that they are constantly looking for an easier way to do things. This is, exactly, leverage. It means giving up the old belief that ‘working hard = more money’ and changing it to ‘working smarter = more money and less effort’. While the term leverage is widely known for finances, any instance where you can put in an amount of something and get more of something else back, is leveraged. For example:
• more done in less time
• more profit with less sales
• more results with less activity Leverage also means creating something once and using it forever, as nothing can be a better return on investment than: Doing x 1 = Return x infinity. Think about the act of creating a system, writing a book, or selling a franchise. You create it once, but how many times can it be used? Forever.
How can you tell if a business is leveraged? There are some glaring indications that a business owner has employed the principle of leverage throughout their business. If it ticks
56 Business Franchise Australia
some, or all, of these boxes, the business is using leverage to create more freedom and room to expand and improve. o Is the owner generally happy, relaxed and willing to help others? o Are the directors frequently taking holidays?
o Does the business have good cashflow, earning it good relationships with its suppliers?
o Are isolatable, low value tasks such as bookkeeping and cleaning, outsourced? o Is the business openly on the lookout for new ideas and better ways of doing things?
o Does the business dabble in ‘market research’, seeing what others are doing and trying it?
o Is the business commercial, profitable and can run without the owners?
Ways to get leverage If your business doesn’t tick many of the above boxes, but you are still reading, this means that you have the mindset to get more leverage in your business; you just haven’t got the tools yet. Some of the best ways to build a more leveraged business are: • Leverage through Time
• Leverage through People
• Leverage through Systems • Leverage through Money
• Leverage through Marketing However, there is one form of leverage that surpasses all others in the return of what you get for your time.
Australia is a world leader in franchising. Worth $128 billion a year, the Franchise Council of Australia states that â€œFranchising in Australia is amongst the most dynamic & progressive business sectors in the economy. It is a recognised & reputable way of doing business in Australiaâ€?. s 5NIQUE HEALTHY @!SIAN &RESH CONCEPT s STORES OPERATING IN 7! 3! !#4 1,$ s %XCELLENT TRAINING PROGRAM PROVIDED s /NGOING SUPPORT FROM .ATIONAL 3UPPORT /FlCE and other stores
s )NITIAL INVESTMENT DEPENDING on location, size and style s ! PROUD MEMBER OF THE &RANCHISE #OUNCIL OF !USTRALIA s %XCLUSIVE OFFER AVAUILABLE TO NEW FRANCHISEES
For more information on a wokinabox franchise opportunity, contact us on 1300 859 989 or visit www.wokinabox.com.au
E X PERT A DV ICE
The best form of leverage is education By reading a book, you can realistically save years of trial and error and go right to the best possible way of doing whatever it is that you want to do. By attending a workshop, you can spend a few hours and learn not only the entire scope of a theory and how to implement it, but the other viewpoints and experiences of others on the same topic. And by spending time with a consultant or a coach, you can effectively compress and absorb their learning from MANY workshops and books into a short space of time. You will benefit by receiving the most vital information in a condensed format, specific to your needs. Today, with the information age, the ability to learn something new has got even more leveraged. Nowadays, I often send my clients off to the ‘University of Google’ or to YouTube to learn how to do something new, especially if it is to do with marketing, online information or technology. I even use a YouTube clip to explain coaching to people!
Leverage through time You can’t get more time, but you can get better at using it. Having said that, if you are currently doing the work of three people you can’t time-manage yourself out of that situation. Sorry, but you will need to hire someone to help you! So how do you utilise your time more efficiently? Start with these steps: 1. Know your worth - Firstly, work out how much you take from the business, on average, every week. Then work out, truthfully, the number of hours you spend at work, home and elsewhere, working in and on your business. Sit down (if you don’t, you might just fall down) and calculate how much you are currently paying yourself an hour. The next step is to work out how much per hour you are worth and focus on achieving that – either by more reasonable hours or by increasing your income, or both. 2. Focus on high value tasks - Look at what tasks in the business earn you far MORE than a market rate wage and focus on doing them more and more. For example, making a big sale or spending time on marketing might be worth $1000 per hour, while running to the store for milk or (badly) doing your own bookwork might be worth less than $20. 3. Create a default diary - A default diary
58 Business Franchise Australia
simply tells you ‘in a perfect week, this is what I would be doing each day’. For example, Mondays I train staff and have a weekly meeting, Tuesdays I meet with reps, etc. Keeping to this will mean you get more done. You can get on more of a ‘roll’ by grouping tasks together. It also prevents any one part of the business from building up and having to be dealt with by pulling an ‘all nighter’.
Leverage through people If you are already employing people and not getting them to help with more than just their hour-by-hour tasks, you have a massively under-utilised asset just waiting to be put to work. You’re already paying for the hour, so why not get more information, more results and more return out of that time? So how do you start? 1. Quit being a control freak - Control is the nemesis to leverage. If you cannot trust others to do a job as well as you, you will never, ever achieve leverage. By all means delegate properly (there are ways of doing it without losing touch with your business), but come to terms with the fact that you will have to delegate. A lot. 2. A team = a business - If you don’t have a team, even of outsourced helpers, you don’t yet own a business, you are self-employed. Even if you are a microbusiness run from home, you should utilise experts, like bookkeepers, so that you can focus on the things you are great at and which make you money. 3. Meetings and feedback - Your people are the barometer of your business and can tell you what’s going on at the coal face far better than you can. Run regular meetings where you place all the responsibility onto your team. They need to turn up with set reports or information, plus their opinions on it. They should also have ideas on how to improve operations.
Leverage through systems Systems are the ultimate leverage – the combination of everyone’s insight into the best way of doing things (best practice), documented so that the next person will immediately do things in the best possible way. 1. Checklists - These are the little sister of operations manuals and far more useable. Checklists ensure that people who already know how to do something don’t forget anything or veer off the system, once its set up. And - a checklist actually makes
you look more thorough (not more stupid) in a customer’s eyes. 2. Software - Almost every industry has a range of custom-designed software for running the business, booking clients, recording details and marketing. Many franchises even have their own. As soon as you can half afford it, industry software will take your business to another level and probably replace many manual tasks, so time can be better spent doing income generating activities. 3. Recruitment system - Having a recruitment system means being able to hit a button and the entire process rolls out effortlessly, finishing with a qualified, perfect new team member landing in front of you. This includes standardised job ads, scripted phone interviews, a great group interview process and qualifying criteria. Eventually, you will be able to hire new staff without ever even meeting them. Yes, really.
It’s not lazy – it’s leverage! There are many other ways to leverage (by using finances, marketing and training, amongst others), but, hopefully, you now know that an entrepreneur should always be looking for a faster and better way of getting the same or better result. So come to terms with the fact that you don’t have to be working hard all the time to show you are a good business owner. Use your head more than your hands and you will find you have more time for new ideas, better relationships and making a better business. Katherine Grace began in business at 17 and has been the owner and General Manager of several franchisor businesses. She is now a business coach with ActionCOACH and has been ranked as high as 14th in the world, most recently winning Best Client Results Globally. ActionCOACH is the world’s largest business coaching franchise with over 1,200 coaches in 40 countries. Possessing a massive database of strategies, templates and systems for business growth, ActionCOACH also connects its clients with 15,000+ other businesses across the world. For more information please contact Katherine at: Phone: Email: Web:
0413 839 974 firstname.lastname@example.org www.actioncoach.com/ katherinegrace
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FR A NCHISE IN eFO CUS :ADVICE LUX A FL E X xpert
Triumph with your own
Luxaflex Window Fashions
Opportunities now exist with the most successful program in the window fashions industry
here is now an opportunity to build your own successful business as a licensee for the market leading brand, LUXAFLEX® Window Fashions. The successful and award-winning Luxaflex Window Fashions Gallery program is currently expanding, with key markets in both regional and metro areas available. Winning a National Marketing Institute award in its first year, Luxaflex has the most successful program available in the window fashions industry. Joining this program means you will be a part of the national network of these top-tier storefront window fashion retailers. You will have exclusive access to a variety of tools, resources, incentives, products, training and much more. No experience in window fashions retailing is required, with all training provided. Hunter Douglas, who own the Luxaflex
Window Fashions brand, provide intensive training programs designed to help you enhance the customer experience, increase profitability and grow your business. The goal is to provide consumers with a unique retail experience - a thoroughly satisfying shopping experience - from the time they first inquire about Luxaflex Products until the time their window fashions are delivered and installed. David John, from Fashion Floors & Windows in Parramatta NSW, comments on his experience in joining this award-winning program. “The support I received throughout the process of building my own gallery business has been phenomenal. The training is first class and right from day one, my team and I felt confident helping consumers with all of their light, privacy and design requirements. The program is truly designed to assist you in making your business a success.” “The quality of the showroom fitout is exceptional. A lot of thought has gone into the look and feel of the showrooms and while they are very much a designer-inspired space, they are very practical as well. All products are full-sized and completely motorised. The showroom is one of the big advantages of being part of a program such as this,” says David. The market-leading Luxaflex Window Fashions brand has been available in Australia for over 50 years and is best known for its extensive range of innovative products. The soft shades category is a specialty of the brand and includes exclusive products such as DUETTE® Shades, SILHOUETTE® Shadings, LUMINETTE® Privacy Sheers and the new PIROUETTE® Shadings.
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David John goes on to say, “The entire soft shades range is known for its quality, which you just don’t see in competitors’ products. There is a long list of features available from fabric colours, textures and opacities to energy efficiency and operating systems. “Best of all, the products are custom made so there is no need to hold any inventory which means no need for stock management and no headaches about out of date stock.” Being part of the Luxaflex Window Fashions Gallery program not only means access to exclusive and innovative products but also exclusive promotions. There is also the benefit of the ongoing advertising and public relations program, which is designed to ensure that the Luxaflex Window Fashions brand continues to reach its potential in the Australian market. David reflects, “Before the business even opened, I received expert advice on local signage and how to market to the local community. As well as having templates for local advertising and public relations, the business also benefits from all of the national activity. It’s great to see the brand consistently featured in all of the top home and lifestyle publications.” As training is such a focus of the program, emphasis is placed on continuous training on a multitude of topics. “The focus is always on delivering a unique experience for the consumer, so as well as receiving ongoing customer service and sales training, we are also kept up-to-date with new product developments and overseas trends. Other training focuses on how to handle human resources in a small business and tips on how to enjoy a work/life balance; all valuable resources for a business our size. “Ultimately, the benefit is that I get to run my own independent business with just the right amount of support – which is always available when needed. I’ve hired a great local team and am assured of exclusive access to a marketing territory. I enjoy the peace of mind of being backed by a luxury and successful brand such as Luxaflex Window Fashions,” David concludes. Jenny Brown, Marketing Manager for the Luxaflex Window Fashions Gallery program discusses other upcoming benefits of the program. “A highlight of the year for the program includes the annual conference, with locations chosen to encourage networking and give each of the hardworking businesses a well-deserved break. Last year’s conference was held in Fiji, with the next
conference due to be held on the Gold Coast in August. “The conference delivers intense business training as well as an overview of the new products and marketing initiatives for the next 12 months. The time is also taken to recognise the performance and success of each of the businesses. There is a gala awards evening where prizes such as the ‘Gallery of the Year’ winner are awarded. Members of the 500/1 Million Club are also applauded,” states Jenny. Being part of the program also provides eligibility for the Luxaflex Windows to the World Travel Incentive program. Jenny goes on to say, “As part of the Travel Incentive program, each business is given an individual sales target goal which they must achieve in order to qualify for the five star holiday of a lifetime. More than 270 people from companies all over Australia travelled to Europe in 2009, declaring the program a resounding success. It was the eighth time the World Travel Incentive program has run over the last 12 years. In previous years, winners have visited South Africa, Mexico, Alaska, Greece, Thailand and Singapore. The program is clearly the market leading incentive program in the window coverings industry. The next incredible destination will be South America in 2012.” Hunter Douglas is also one of the most technologically advanced companies in the window fashions industry. At the backend of the Luxaflex Consumer Website is an online gallery dealer portal - a secure online resource and e-learning centre for every business owner. Each gallery dealer can access the portal directly to retrieve their sales leads, access up-to-date product information and training manuals, plus much more. “Each gallery dealer also has their own
unique URL directing consumers to their personalised six page mini-website, which is an effective mechanism for promoting their services and products online. “As you can see, there are many benefits of being a part of the Luxaflex Window Fashions Gallery program. You get to build your own independent business, while relying on the support and training that is provided. There are never any guarantees when starting your own business, but being part of our program certainly means that you have every chance of achieving success,” concludes Jenny Brown. Luxaflex Window Fashion Gallery territories are still available in selected parts of Australia. To find out more call Mark Futeran at: Phone: Email: Web:
02 9638 8000 mark.futeran@hunterdouglas. com.au www.luxaflex.com.au
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consulta nt closesher pa g rou p e xpertup: ADVICE
CLIMB HIGHER “Blame no one. Do something. Expect Nothing.”
ords to live by if you are part of Sherpa Group. Vicki Prout, Founder and Chief Sherpa of Sherpa Group, believes these words are the key to success. Vicki’s background and subsequent rise in the world of global franchising is a unique story in itself. At a young age Vicki
decided to join the Navy. This she did with tremendous strength and determination. After a decade of serving the Navy and her country, Vicki decided she would enter the small business arena. Starting with a pet food delivery company and then moving on to become the International Development and Marketing Director for Cartridge World.
can franchise their business, but forget to ask is the business ready to be franchised? Through our analysis of many franchises, successful and unsuccessful, new and old, Australian and foreign, we have been able to determine a shared set of characteristics that businesses should possess to show that they are ready for their franchising journey.
It was in this position that Vicki gained invaluable insight into the world of franchising, growing the Cartridge World franchise from 436 stores to over 1600 stores in 42 countries.
And, if the business is not quite ready, then we need to answer 2 further questions:
Building from principles learnt in the defence force and over 15 years’ experience in the franchising sector, Vicki established Sherpa Group in 2009. The company draws on Vicki’s in-depth understanding of relationship building, team orientation, franchise recruitment marketing, brand development, strategic development and implementation as well as the documentation and reconciliation of the expectations of entrepreneurs in widely differing cultures. As such, Sherpa Group operates as an international consultancy, guiding businesses throughout their franchising journey. Vicki’s experience as a franchisee, franchisor and consultant, affords her a wealth of knowledge and a remarkable “live” skill set within the business world. In recognition of her achievements, Vicki was voted SA Franchise Woman of the Year for a record four years in 2006, 2007, 2008 and 2010. Vicki was also the FCA National Chair for Women in Franchising. The Sherpa Group team has travelled the path and along the way have gathered the tools and know how to help guide businesses through the rocky landscape of franchising. “It is amazing how many people think they
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1. What needs to be done to get your business ready for franchising? and 2. With our help, are you and the business able to do what needs to be done A well run business that is in a viable market with great operating systems and making consistent profits will be an attractive proposition to new franchisees. When it comes down to the required commitment your system should follow the landscape of sound compliance framework, ensure the model is profitable at all levels, exhibits longevity in the market, is simple to reproduce and the owners should be prepared to shift focus to training, support and R&D. Not all business owners receive the correct advice before undertaking the awesome franchise journey. The process is not difficult; it just takes time and commitment and resources. This is never a get rich quick scheme – it is sheer dedication, passion and determination – putting yourself, your business model, systems and processes constantly on the line,” remarks Vicki. The same process and diligence needs to be undertaken when looking to purchase a franchise business. As expert consultants to potential and current franchisors, Sherpa Group knows what constitutes a strong and stable franchise system. Vicki and her team have developed
BE WILLING TO USE ADVISORS. If you can’t find a successful franchisor to mentor you then get some great advisors to guide you through the process. You don’t know what you don’t know. Sherpa group believes each journey in business is different, each person has different reasons and motivations for being in business and your dreams and aspirations are as unique as the business you have built. If your vision for the future includes franchising, have a Sherpa join your team for the journey. If your vision is to become a franchisee, be prepared for a mountain climb, be willing to be courageous and energetic and research and gain as much knowledge as possible, then go forward, knowing you are not alone. For further information on Sherpa Group, please contact Vicki at: the Top 10 tips for becoming a franchisor – however, this list is equally as vital to potential and current franchisees. So, if you believe passionately in your business and are contemplating becoming a franchisor, evaluate yourself and your business. The same applies for becoming a franchisee, but in this case you would need to evaluate yourself and the business you are buying. Take a good look at this list and see if you are ready for the journey.
TOP 10 TIPS FOR BECOMING A FRANCHISOR BE AMAZING. You should be the best and offer amazing results in your business if you’re thinking about franchising. So when you have lines of people going round the block every day, you are probably ready to think about franchising. If your competitors have lines going round the block and you don’t, you’re probably not ready. BE UNIQUE. Having something that is different, exciting, unique or new, means your business systems are better than the competition. Franchisees will want to buy that. Another pizza shop with “organic” olives on their Supreme alone isn’t going to slice it! BE COURAGEOUS. You have to be determined to learn it all again. You need to be willing to risk everything again (after you have probably just given yourself some breathing room) and teach yourself all about franchising and what it takes to make it.
BE HUMBLE ENOUGH TO COPY. Look at what other successful franchises are doing well and see if it would work for you. It’s valuable to have a unique and amazing product or service but proven operating systems and practises do not need to be rescripted.
Phone: Email: Web:
02 9267 6277 email@example.com www.sherpagroup.com.au
BE CREATIVE. Come up with an amazing franchise business model that will lead to strong franchise growth and profitability for you and importantly the franchisees. BE PREPARED. Research franchising magazines for articles that advise on how to find the right franchise and ask yourself, ‘Could your business meet those requirements?’ BY THE BOOK. You need to document the whole business, from systems and procedures to marketing, technical and financial guides – be prepared to have comprehensive manuals. Don’t cut corners. BE ENERGETIC. Lead by example. Bring energy and passion to your role as a franchisor and your team and franchisees will feed of it. Be prepared to continually reinvest back into your network. BE COMPLIANT. Make sure all your legal documentation is prepared by an experienced franchise lawyer and be prepared to incorporate comprehensive compliance management systems.
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MastersÂ inÂ pavementÂ maintenance SealÂ yourÂ financialÂ success
CRACKMASTERSÂ areÂ leadingÂ theÂ wayÂ inÂ pavementÂ maintenance. BecomingÂ aÂ CRACKMASTERSÂ franchiseeÂ willÂ provideÂ youÂ withÂ multipleÂ opportunitiesÂ including: Â‹ Â‹ Â‹ Â Â‹ Â‹ Â Â Â‹ Â‹ Â‹
6\[KVVYZ3PMLZ[`SL >VYR3PMLIHSHUJLMSL_PISLOV\YZ 4VIPSL!THZZP]LJVTTLYJPHSHWWLHS[V[OL governmentÂ industry -PUHUJPHSS`ZPTWSL^P[OZ[YVUNJHZOMSV^ *VZ[LMMLJ[P]L[LJOUPX\LZHUKZPTWSL technologiesÂ providingÂ aÂ hugeÂ competitiveÂ Â edge :[YVUNZ\WWVY[LMMLJ[P]LL_[LUKLK [YHPUPUN(WYVI``V\YZPKLMVYMPYZ[ML^ ^LLRZH[[OLV\[ZL[ )\PSKPUN`V\YV^UI\ZPULZZLX\P[` L_NZ[LU[Y`PUJS\KLZL]LY`[OPUN V[OLY[OHU`V\Y\Z\HSS`SLHZLK]HU
TheÂ bestÂ part:Â ground-floorÂ andÂ innovativeÂ VWWVY[\UP[`/\NLTHYRL[WV[LU[PHS^P[O commercialÂ accountsÂ alreadyÂ inÂ place.
CONTACTÂ JasonÂ Cobb (WWHYLS*SVZL )YLHR^H[LY=PJ[VYPH 7OVUL -H_ 4VI ^^^JYHJRTHZ[LYZJVTH\ QHZVU'JYHJRTHZ[LYZJVTH\ 64 Business Franchise Australia
musclebeach â€œIts all about the supplements in lifeâ€?
â€œItâ€™s all about the supplements in lifeâ€? Muscle Beach have been supplying Australia with the worldâ€™s best sports and
Muscle Beach supplements have been supplying Australia withathe worldâ€™s best supplements since nutritional since 1993. Offering huge variety ofbody quality products, assisting 1993. Offering a huge variety of quality products, assisting with individual training programs with individual training programs and providing expertise on supplement strategies, and providing expertise on supplementation strategies, Muscle Beach are now franchising.
Muscle Beach are now franchising.
Reshape your career...we have raised the bar! Reshape your we have raised the bar! Muscle Beach arecareer... offering:
Muscle Beach are offering: Retail business - fitness industry without having to own a gym t 3FUBJM#VTJOFTTĂśUOFTTJOEVTUSZXJUIPVUIBWJOHUP Provenown business a gym systems and processes t 1SPWFOCVTJOFTTTZTUFNTBOEQSPDFTTFT Opportunity for high financial success t Strong 0QQPSUVOJUZGPSIJHIĂśOBODJBMTVDDFTT brand and image, especially in the retail supplements industry t Strong brand and image, especially in the retail Work / Life balance supplements industry Massive product range and choice of supplements t 8PSL-JGFCBMBODF Full training provided and a strong support network from a highly motivated and dedicated t .BTTJWFQSPEVDUSBOHFBOEDIPJDFPGTVQQMFNFOUT team of'VMMUSBJOJOHQSPWJEFEBOEBTUSPOHTVQQPSUOFUXPSL experts t from a highly and dedicated team of experts t Own and run yourmotivated retail sports and nutritional supplements store in an industry with t 0XOBOESVOZPVSSFUBJMCPEZTVQQMFNFOUTTUPSFJO enormous growth potential
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Reshape your future and streamline your wealth. Call now: Michael Clunne Phone: (02) 4628 4020 Mobile: 0405 577 985 Email: firstname.lastname@example.org www.musclebeach.com.au
an industry with enormous growth potential Reshape your future and streamline your wealth. Call now: Michael Clunne Phone: (02) 4628 4020 Mobile: 0405 577 985 Email: email@example.com www.musclebeach.com.au
Donâ€™t miss your opportunity to be involved in the fast growing Green Business sector. We are looking for enthusiastic individuals to become authorised licensees to deliver the 6P Green Program to the SME market. The 6P Green Program is a unique workshop style program that creates an Environmental Management System for organisations over six easy steps. Do you Have practical business experience and the ability to leverage your business networks? Want to work your own hours? Want to improve your work/ life balance? Aspire to be your own boss? Want to assist organisations improve their bottom line whilst reducing their carbon footprint?
â€œIâ€™veÂ neverÂ hadÂ soÂ muc Â Â ClareÂ Williams,Â OwnerÂ Operator
OperatingÂ aÂ sKidsÂ franchiseÂ isÂ financiallyÂ rewardingÂ butÂ moreÂ soÂ itÂ isÂ emotionallyÂ rewarding. WorkÂ withÂ kidsÂ inÂ yourÂ areaÂ byÂ providingÂ structuredÂ supervisionÂ viaÂ OutÂ ofÂ SchoolÂ HoursÂ careÂ (OOSH)Â programmes
Comprehensive training, systems and program material provided. Ongoing support. Very low start up and operating costs. Safe Kids In Daily Supervision
A limited number of licences are available in most states. Visit www.6PGreen.com.au WRĂ€QGRXWKRZ\RXFDQEHFRPHDQDXWKRULVHG3*UHHQ3URJUDPOLFHQVHH
VickiÂ Prout M:Â 0439Â 803Â 078 Ph:Â (08)Â 8272Â 8488 E:Â firstname.lastname@example.org workingÂ with:
W a s
“I’ve never had so much fun at work!” Clare Williams, Owner Operator
Operating a sKids franchise is financially rewarding but more so it is emotionally rewarding. Work with kids in your area by providing structured supervision via Out of School Hours care (OOSH) programmes
Build relationships with precious cargo- the kids! Have fun, listen to creative stories, learn, laugh and cry! Be part of the kids growth and development
Rewarding Business Make a difference Safe Kids In Daily Supervision
Contact: Vicki Prout M: 0439 803 078 Ph: (08) 8272 8488 E: email@example.com working with:
We are looking for Master Franchises and local franchisees in every state to share the sKids dream. Are you looking to work with children and make a difference? Then talk to the award winning team at sKids.
“Partner with Intrinsic and grow your accounting firm” The Intrinsic Business Coaching system is a structured coaching and mentoring program that maximises business performance and produces positive lasting change. Intrinsic has partnered with several accounting firms implementing the coaching program successfully and offering clients a more comprehensive management strategy. The coaching program operates within a franchise framework, but simply looks like an extension to the accounting firms own suite of services! Find out more about growing your firm’s offering, contact: Timothy Millar Ph: 08 8372 7828 Fax: 08 8372 7800 Email: firstname.lastname@example.org www.intrinsiccorporation.com.au working with:
As an accounting firm and Intrinsic strategic partner, you’ll enjoy: A proven fresh approach A logical strategic expansion of your business Access to Directors who have a track record second to none – knowledge and expertise A unique offering and positioning - adding value and benefits to your firm Simple set of business tools, products and services knowledge, tools, products, and services are skills based and are NOT readily available
We pride ourselves on: Having a positive reputation for identifying problems, Maintaining and applying a high level of industry knowledge, Possessing the ability to shape and tailor solutions, and Providing tangible and measurable results through a well structured, easy to implement and profitable model.
feature The retail industry… it’s big, it’s exciting, it’s everywhere!
y definition, retail is the sale of goods to end users, not for resale, but for use and consumption by the purchaser. The retail transaction is at the end of the supply chain. Manufacturers sell large quantities of products to retailers, and retailers sell small quantities of those products to consumers.
Your product So, as a retailer, or potential retailer, your product is the most important component in your business, right? True, your product is vital. It should be top quality and something you believe in. But to succeed in retail, you must be a shrewd business person who considers all facets of the business. If you don’t have a sound business plan, a strong marketing strategy and a firm grasp on your financial status – the quality of your product becomes second tier.
The potential market According to recent figures listed on the ‘blyncmedia’ website, the Australian population as a whole make nearly two billion visits to shopping centres each year. If you take into consideration the total population this averages out to around two visits per person, per week. During these visits to shopping centres, Australian consumers hand over $84 billion to secure their purchases. Add to this consumer online buying and other local outlets and centres and the cumulative
68 Business Franchise Australia
spending in the Australian retail industry reaches a whopping $240 billion.
Can you do it? Tempting, isn’t it? Do you have visions of owning your own quaint little dress shop in the local village, or a big name coffee house in the flash shopping centre in the city? Can you get your hands on some of this vast sum of money being handed over by eager consumers? The answer is yes, but tread carefully. The recent global financial crisis has affected nearly every industry throughout the world. Australians are still willing to spend money, but they are much more selective now. Consumers are more conservative, more willing to seek out a ‘good deal’ and more willing to wait for the items they want. This means retailers are competing in a highly competitive arena as they fight to win the dollars that are being spent. Add to this the fact that commercial rental rates have gone through the roof, with large shopping conglomerates pushing for leasing rates based not on what the market can bear, but what they can scrape out of their leasees. So, if sales are down and the cost of doing business has gone up, is it worth the risk of entering the retail market now? The answer, again, is yes, but tread carefully….again.
Security in franchising This is where the benefits of entering the franchise industry come into play. If you know you want to own a corner bakery, why not purchase a bakery franchise. It is romantic to envision the sign over your bakery having your own name on it, however this is symbolic of the situation that will follow. You will be on your own. You will have to develop your business plan, secure funding, choose a site, negotiate your lease, supervise your fitout, formulate a marketing strategy, source your products and then actually run the business. Are you tired yet? Imagine if all of this work had been done for you already? Well, at least a great majority of the work. This is the beauty of franchising. Retail is romantic, in a sense, but it is also risky. As opposed to the service sector or the work-from-home business options, in retail you have bigger costs and bigger risks.
The strength of experience But don’t despair. Despite the drop in consumer confidence, people are still
spending. Perhaps not as quickly or as easily as before – but they are still spending. Being part of a franchise system that has weathered previous economic storms, and knowing that you are an integral part of a larger network, can give you the strength and knowledge to not only survive retail lulls, but continue to prosper. Along with the actual site you eventually choose, hopefully with the help of your franchisors site selection strategy, you also now have the online space to consider.
Online spending This is a fairly new arena for many retailers and perhaps a bit daunting as well. Currently, online retail spending in Australia accounts for only about three per cent of the total retail sales figures. But this figure is poised to grow. Social Media is a powerful tool and one that can not be ignored. The benefits of utilising the social media platform include reaching a large audience to develop and instill brand awareness, increasing the effectiveness of marketing plans and creating an interactive experience for your current and potential customers.
Make it happen In the end, the choice will be yours. Whether you decide to go forth into the world of retail and whether you choose to do this as part of a franchise, it is ultimately up to you to define your success. You must be passionate about your product, committed to offering the best service to your customers and willing to work hard to make your business successful.
Retail Battery World Forty Winks LuxaFlex Matchbox PoolWerx Snooze TeleChoice Telstra United Petroleum
Business Franchise Australia 69
PROFILE : AUST V END I NG
Candy into Cash?
importantly, Austvending will provide you with ALL of your locations upfront. Yes, you read that correctly, Austvending finds suitable locations for you, installs all machines on site and provide you with training wherever you are in Australia. Bulk vending began in 2001 in Australia with the U-Turn ‘money maker’. The same concept that gave us all those great little toys over the past 40 years, suddenly began to provide confectionery, nuts and toys – all in one great machine.
he vending industry may seem too big and varied or perhaps you believe there is no money to be made in owning your own vending business. Few people realize the potential for a substantial cash income in vending. The team at Austvending believes differently. Through their years of experience they have developed potential earnings based on average takings per machine. If you own 100 machines and each machines makes only $3 per day (a low figure) – if you calculate this over one year your Gross profits are $92,092. If you have 200 machines, well you can do the math. Then consider that some machines will make more than $3 per day but it is the average what really matters. Luis Nevares, General Manager of Austvending remembers when he first started in the vending industry. He and his business partner had very little money (being full time students) and had difficulties starting their own business. He was unsure as to how much income he could generate from working in the vending industry. At the end of the first month they spread all the 20c coins across the dining room table. It took some time, but when they had finished counting – they realized they had just made enough money to pay the rent and keep the business going. It was at this stage the Luis realised if he
70 Business Franchise Australia
dedicated himself to this industry, he would be able to make a reliable cash income and be his own boss. “I was planning to go back to the finance industry where I worked for some years but after my vending experience there was no turning back. I effectively managed to beat the 9 to 5 grind.” Luis is now committed to helping others achieve the same personal success and to bring new proven business concepts into Australia. Many of Austvending’s current business owners and nearly every individual who enquires about the vending industry wants to either supplement their current income or change their current occupation to allow themselves more time to enjoy their life. Whether you are building for your retirement or just complementing your current income, vending is a sound investment that will deliver tangible cash every month. This part-time job can generate a full-time income. Austvending offers you a personalised plan and business structure for achieving your financial and personal goals. They have a proven system that can provide steady, ongoing, long-term cash income. They offer a large variety of package systems to meet your growing income goals. Most
These portable machines are now found in universities, banks, office buildings, staff rooms, shopping centres and airports. They have extreme flexibility in location placement as there is no electricity required to run these machines and they take up very little space. With the machines now operating at $1 and $2 vends, many Austvending operators earn in excess of $1000 per day when servicing their rounds. The U-Turn ‘money makers’ offer the highest profit margin of any similar machine in the world. Want to feel good about making money too? Austvending has exclusive relationships with the Royal Flying Doctor Service, Teen challenge, Ch.L.C.R.F and other associated charity partners. This ensures excellent location opportunities, integrity and goodwill. Austvending business owners contribute $30+GST per machine per year. For this licence fee, they are supporting charity organisations and being given prime locations, along with badges confirming charity support for all their machines. Austvending’s mission is to offer the finest vending equipment available, to establish successful vending business partners and to provide service that exceeds expectation. Austvending provides global products with national support and local service. Austvending wants their business owners to prosper. For more information on becoming a part of the Austvending team contact: Luis Nevares Phone: 1300 769 967 Web: www.austvending.com
Invest with Austvending and begin a lucrative, rewarding way of life
At Austvending we specialise in establishing new vending machine businesses for individuals all-over Australia and New Zealand. We take care of all the machine locations, the initial stock for the machines, the local training and deliveries; all with an outstanding level of customer service. รท (DUQDIXOOWLPHLQFRPHRQSDUWWLPHKRXUV รท 3URรฐWRQSURGXFWsIURP%WR รท &XUUHQWO\ZHKDYHZULWWHQYHQGLQJORFDWLRQ DJUHHPHQWVLQHYHU\FDSLWDOFLW\ in Australia รท ,QYHVWPHQWVGHOLYHUDUHOLDEOH&$6+LQFRPH HYHU\PRQWK, do vending with Austvending
We are the experts with 14 years behind us.
and receive your information pack
1300 769 967 www.austvending.com email@example.com
E X PERT A DV ICE e xpert ADVICE
HOW TO CHOOSE
A RETAIL SITE? accurately defined your business and your customer. The following points are crucial: • know your business parameters and optimum shop size • know your target CUSTOMER • know your customers habits - how, when and where they shop • have very clear medium and long-range goals Defining your customer or customer group, is really the basis that allows you to score or ‘weight’ each criteria, allowing a methodical approach to site selection.
ver the past 30 years in retail, I have opened, closed, moved or refitted over 50 stores. In doing so, I’ve looked at and analised thousands of site opportunities.
So how do I choose a site? I follow a systematic step-by-step procedure. If I didn’t, I would have given up or gone crazy by now. Business is too tough to just roll the dice and hope. Whether you are opening your second, third or thirtieth store, it is still your hard-earned and tax-paid profits that are on the line. So for me, I’d rather do some homework before I sign up, rather than fighting to lift a failing store. Retailers need to be aware that the current bunch of leasing ‘executives’ or leasing
72 Business Franchise Australia
‘super salespeople’ are hardened and wellinformed. They are motivated by huge salaries and BIG commissions. The big boys (Westfield, Lend Lease, and the big property trusts, etc.) have been collecting data and refining techniques on how to extract more income per square metre for decades. They collect information worldwide and then educate and train these ‘super salespeople’ on how to beat retailers in the tenant/ landlord leasing negotiation. Just remember, they will get their commission regardless, even if you lose your shirt over the lease period! So retailers need to enter these leases only after a thorough and systematic analysis has been completed! Before explaining the steps I take, I firstly have to assume you have seriously and
I have certainly learned the hard way that high traffic sites can be a disaster if the traffic is wrong for you! Similarly, other seemingly innocuous things, like external noise or smells, can really effect potential turnover. My next piece of advice before we start the process is to USE CONSULTANTS!! You will be the one risking a large amount of money, no one else, so get some experts on board. Make sure the consultants you choose are not biased by commission or have a commercial interest in the deal. The key is to pay them whether you sign or walk away. The first step in choosing a retail site is to draw up a 10-point criteria or evaluation sheet. Here’s mine: • size of potential market • size of shopping centre • population in primary draw area (I always drive this area) • number of competitors in draw area • traffic flow past the site
“Retailers need to be aware that the current bunch of leasing ‘executives’ or leasing ‘super salespeople’ are hardened and well-informed.” Rick Jobson, Ceo, Kings Jewellers and Anthonys Fine Jewellery Group.
• neighbours in traffic area (the adjacent shops, at least four in every direction) • site layout (size, shape, frontage) and it’s potential • direction of traffic past site • lease cost and outgoings, terms, and relevant commercial details • fitout regulations and restrictions (one of today’s biggest traps…the fitout guys are autonomous to leasing!) Under each of the above headings I have a subgroup of points to check and research. Each of these 10 criteria have a bearing on the final decision, although I am very fluid with the ‘weighting’ of each point. Don’t get hung up on a one to ten rigid score, sometimes a ‘very good, OK, or poor’ weighting will do. However, it is MOST IMPORTANT to have a warning or ‘kill’ switch on your scoring or weighting process. There are factors that will certainly ruin a site for any business and you must know these for your particular industry. For example, I once took a site that was physically too small for my business model and despite doing in excess of $30,000 per square metre, I still lost money. Leasing salespeople will know the attributes and drawbacks of the site on offer. Of course, they will flog the good points and downplay or try to hide any problems. Do your homework and be prepared to walk away. Keeping arms length from the leasing teams is sometimes a safe option. Don’t rely on your solicitor to fight these big players if you miss something or its ‘concealed’. The big boys have far deeper pockets.
Nothing is ever easy or clear. You can start by working through your list quickly at first, to knock out the obviously wrong sites. Then start getting more thorough. I analyse which, if any, criteria I can alter. For example, I might change my shop design to utilise a site that at first doesn’t instantly fit my model. Or perhaps, with a certain type of advertising campaign, I can improve one aspect. These ‘extra efforts’ need to balance against the price of a site. Some of my best sites have seemed a little awkward at first, but as the rent is lower, it leaves room to work around any issues. Balancing these issues are the criteria that I cannot change. Perhaps a ramp, or an incompatible neighbour that has a long-term lease. Once again, the leasing agents will dismiss these problems or often indicate they are temporary… don’t fall for it. The next step is to weigh each of your 10 criteria. If you use a consultant, they will assess your existing stores and give you a rating on your best stores. This can give you the ‘winning features’. Once you recognize the top features, it becomes easier to assess future sites. But common sense and experience will help with the scoring of each point. From this ‘total score’, I would then estimate the likely turnover I can achieve from the site. I then work this figure backwards to estimate how much I can afford in total occupancy costs. If I need more than the usual fitout allowance or advertising costs, this is then deducted from the potential gross profit prior to calculating the maximum rent viable. At this stage you should refer to a ‘checklist’.
This list is not your 10-point assessment, but rather a common sense or gut feeling review of the process. Mine is something like this: • I’ve walked the site and centre, and have a good feeling of the shopping centre. • I’ve driven around the car park and around the major roads nearby to assess the area. • I have talked to all my consultants (property consultant, solicitor, shopfitter, etc.) and they have given me their advice. Lastly, I’ve done a ‘what if’ on the 10-point list. This shows me how much money I might lose if one thing on my list changes. If everything looks good, start the discussions on rent and terms. In my experience, if it comes together quickly, the chance of success is far more likely than with drawn out and protracted negotiation. The leasing agent will always push you and indicate other retailers are ready to ‘snap it up’. If you are getting squeezed up in rent or the deal is souring on certain terms…walk away. Rick Jobson is the CEO of Kings Jewellers and Anthonys Fine Jewellery group. Rick has been in the jewellery business for over 30 years and uses his expertise as both chief designer to produce custom designed and manufactured jewellery. Kings Jewellers and Anthonys Fine Jewellery are vertically integrated with retail stores, a wholesale import/export division and a factory. For more information please contact Rick at: Email: firstname.lastname@example.org Web: www.anthonys.com.au
Business Franchise Australia 73
FI N A NCI A L A DV ICE e xpert ADVICE
PROTECT YOUR MONEY TAX CHANGES EFFECTING FRANCHISE BUSINESSES Diagram 1.
or at least the last decade, a discretionary trust has been considered the best structure to operate a small to medium enterprise (SME) in Australia. Recent changes mean this may no longer be the case.
The most common business structure for SMEs is a discretionary trust (family trust) as the main trading entity with a corporate beneficiary (bucket company). The discretionary trust enables the streaming of income to individuals within the family group. Typically, this was up to a maximum of $80,000 (top of the 30 per cent tax bracket) for mum and dad.
FAMILY TRUST Mum $80,000 Dad $80,000
Balance Child 1 $3,333
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Child 2 $3,333
A distribution of $3333 is the maximum tax free distribution which can be made to beneficiaries less than 18 years of age. The balance of income is distributed to the corporate beneficiary, who pays a flat rate of tax at 30 per cent. In this way, the marginal tax rate for the group is capped at 30 per cent. Therefore, mum and dad are not subject to the higher marginal tax rates, which are 38.5 per cent and 46.5 per cent, inclusive of the medicare levy. Diagram 1 represents the typical flow of distributions within this structure.
“In my view, it will become more commercially acceptable for purchasers of an SME business to buy the shares in a company.” Jamie Bishop, Partner, McLean Delmo Accountants and Business Advisers.
Typically, in the above scenario, the distribution of income from the trust to the company is not paid in cash. When this happens, the cash is retained in the family trust for working capital in the business or it is invested. A company is not a good investment vehicle since it does not receive the 50 per cent Capital Gains Tax (CGT) discount, which is available to trusts and individuals. When a distribution is made to a company from a trust and the cash is not paid across, an un-paid present entitlement (UPE) is created. If a UPE exists and the beneficiaries draw cash from the family trust which has not been distributed directly to them, then Division 7A of the tax act deems these drawings to be a dividend. This deemed dividend is taxed at top marginal rates and severe penalties may also be imposed. The result would be an effective tax rate of well over 50 per cent. A scenario which should be avoided! Similarly, if a shareholder draws money from the company which has not been paid out by way of dividend, a deemed dividend can also be imposed. Until recently, a UPE between a trust and company created no tax issues, provided the beneficiaries or shareholders did not draw funds they were not entitled to. The trust could retain the cash from profits distributed to the bucket company. The Australian Taxation Office (ATO) Ruling 2010/3 seeks to overturn this position. ATO Ruling 2010/3 states that any UPE created post 16 December 2009 is a loan according to Division 7A of the tax act and
will be deemed as a dividend if one of the following is not done: 1. The trust pays out the UPE by transferring cash to the bucket company. This is not always possible since the cash is often used as working capital in the trust. Further, there is the issue of how to invest the funds in the company since the CGT discount is not available. 2. Convert the UPE to a Division 7A compliant loan. This loan must charge a minimum interest rate set out by the ATO, which is currently 7.4 per cent. The loan must include principal reductions each year. The maximum term for an unsecured loan is seven years. A secured loan may have up to a 25 year term. The interest charges on this loan will be taxable income in the company. In addition, there is a cashflow issue for the trust since principal and interest amounts must be paid every year. 3. A sub-trust may be created in the family trust which sets aside a specific asset for the benefit of the bucket company. The value of the sub-trust asset must be sufficient to cover the UPE balance. There are a number of requirements which must be satisfied for this sub-trust arrangement to be valid. 4. The company may ‘buy’ assets such as plant and equipment from the trust to clear the UPE. The plant and equipment would then be leased back to the trust on a commercial basis. Depreciating assets in a company do not have the CGT disadvantages of investment assets in a company since they are written off each
year and are not subject to CGT. Of these remedies, Option 2, the Division 7A loan, is by far the most commonly employed. The problem with this option is that a new loan is required each year. At the end of seven years there will be seven separate loans in place, each one requiring principal and interest payments. This would become administratively very difficult to deal with. Further Division 7A loans are often paid by way of declaring dividends from the bucket company. These dividends are taxable income in the hands of the business principals, since they are usually the shareholders in the bucket company. The tax impact of declaring these dividends over time becomes worse than the tax that would have been paid if no distribution was made to the bucket company in the first place. As I am sure you can now appreciate, this is a complex and difficult scenario to deal with. Unfortunately, most of the SME businesses in Australia will be impacted by the above changes in some way. In my view, the solution is to transfer the business out of the trust structure and into a company structure. The shares in the new trading company should be held by a family trust. Under this structure, business profits are taxed at the flat corporate rate of 30 per cent. Any cash drawings required by the business proprietors must be paid out by a dividend from the company to the trust. This dividend income is then distributed out of the trust to the beneficiaries. These trust distributions may be streamed in the most tax effective manner.
Business Franchise Australia 75
FI N A NCI A L A DV ICE
It is important the trust holds the shares, since dividends paid from a company are fixed in proportion to the shares held. Therefore, it is not possible to stream dividend income which comes directly from the company. Under the current marginal tax rates it is possible to pay a gross dividend of $166,666 to mum, dad and two children without exceeding the 30 per cent marginal tax rate. The cash component of this dividend, assuming it is fully franked, is $116,666. The balance of the dividend is imputation credits of $50,000. These imputation credits should more than cover the tax resulting from the dividend, provided mum, dad and the children do not have significant other income. Under this new structure the flow of income through the group is as follows: Income
trading COMPANY Dividends
FAMILY TRUST Mum $80,000
Child 2 $3,333 Dad $80,000
Child 1 $3,333
76 Business Franchise Australia
When transferring the assets from the trust to a company, there are CGT rollover provisions which provide relief from the income tax consequences. Other issues, such as the stamp duty on asset transfers and existing contract arrangements, should also be considered before any decision to role over into a company structure are taken. Using this structure, the tax implications of ATO Ruling 2010/3 and Division 7A may be avoided. The one major disadvantage of this company structure is capital gains tax when the business is sold. When a business is sold, the purchaser can either buy the assets out of the structure or alternatively they can assume control of the existing structure by purchasing the shares or units. Typically, when an SME business is sold, the purchaser buys the business assets out of the structure. This is because a structure retains its history when a new owner takes over. The purchaser does not want the exposure to any legal consequences which may result from this history. The way to ensure there is no exposure is to buy the assets only and place them in a fresh structure. When selling a business out of a trust structure, it does not matter either way since the CGT 50 per cent discount is available under both scenarios. In a company structure, however, the 50 per cent CGT discount is only available if the shares are sold. This is because the trust owns the shares, therefore it is the trustâ€™s capital gain which has access to the 50 per cent discount. If, however, the company sells the assets, then the company makes the capital gain and no discount is available. In my view, it will become more commercially acceptable for purchasers
of an SME business to buy the shares in a company. This change will be due to the above tax issues, which will drive more SME businesses to operate through a company structure. Every business and family circumstance is different. Therefore, it is critical professional advice is sought before any decision to alter your businesses structure is taken. The proposed restructure will not be appropriate in some situations. The taxation issues created by ATO Ruling 2010/3 should not be ignored. The impact of a deemed dividend would be threefold: 1. A 46.5 per cent income tax. 2. Penalties imposed by the ATO. 3. General interest charge levied on the outstanding tax balance. Jamie Bishop is a partner and head of the franchising division of Melbourne firm, McLean Delmo Accountants and Business Advisers. Jamie has over 14 yearsâ€™ experience in public practice, specialising in business structuring, franchising, management consulting and business valuation. McLean Delmo is a leading provider of accounting advice to franchise businesses in Australia. The team includes progressive accountants, financial planners, auditors, mortgage brokers, tax and other specialists. Contact Jamie at: Phone: Email: Web:
03 9018 4604 Jamie.Bishop@mcleandelmo. com.au www.mcleandelmo.com.au
Fun, Fresh, Fabulous!
Trampoline Gelato franchise opportunities 100% Australian owned Trampoline are passionate about the quality and flavour of their award winning gelato. Healthier than ice cream, Trampoline gelato is made fresh using only the finest natural ingredients and the best milk from local farmers in Gippsland, Victoria. Franchisees receive comprehensive training, ongoing marketing support, an easy stock management system and complete, turnkey store opening process. Immediate franchise opportunities include stores in Church St Brighton, Vic and in Melbourneâ€™s new Royal Childrenâ€™s Hospital.
Find more at trampolinegelato.com.au or call Jen on (03) 8416 0316
TR0366 BFA 185x135 Ad.indd 1
2/6/11 5:03:14 PM
Do you want to join one of the largest Australian owned independent retail convenience and fuel companies? As a franchisee with United you will receive t Merchandising and promotional support - including our United Petroleum is one of the largest independent fuel companies in Australia. unique monthly magazine. We continue to grow in strength opening more sites each year providing innovative products and services, merchandising promotions, training and mentoring to help t0OHPJOHQSPEVDUJOOPWBUJPOT you grow your business and achieve maximum profit. t&OWJSPONFOUBMMZGSJFOEMZQFUSPMFVNQSPEVDUT But donâ€™t just believe us, hereâ€™s what some of our franchisees had to say; t5FOVSFTVQUPZFBST t.FOUPSJOHBOEDPBDIJOHGSPNPVSEFEJDBUFEĂśFMEUFBN â€œWhat I personally like about United is their high level of knowledge of the business and the staff/directors that stand behind you; always there to help grow your business. t*ODMVTJPOJOFYDMVTJWFSFUBJMQSPHSBNTJODMVEJOH.:&3POF
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Sites fast for so almost act quickly! â€œI haveare beenselling with United 3 years. I am looking forward to a long lasting business relationship because of Unitedâ€™s attitude towards its franchisees and my ability to work in a team. As a franchisee I have utmost belief for Unitedâ€™s business Go to www.unitedpetroleum.com.au and complete your application knowledge, guidance and feedback. Not only do I appreciate the financial benefit by online now or contact Melinda on 03 9413 1562 to find out more running a United store, I see myself grow with United and being part of a great success story is rewarding.â€? - Harsha P Go to www.unitedpetroleum.com.auDQGFRPSOHWH\RXUDSSOLFDWLRQRQOLQHQRZRUFRQWDFW-RGLHRQWRÂżQGRXWPRUH
unitedpetroleum.com.au United Petroleum is proudly a member of
Harsha P. Patterson Lakes, VIC
spotlight on services : B I L L I NGS LO NG
A Perfect Fit
For Your Business B illings Long are a national shopfitting company specialising in quality retail food fitouts throughout Australia. With 13 strong years of experience, Billings Long is committed to aligning themselves with franchisors and franchisees to understand the specific requirements of each system and then delivering a full fitout that meets the goals and visions of the franchisor.
the design, permit and construction phases of a fitout. This allows the franchisor to concentrate on other key areas of their business and the franchisee to focus on the many other tasks associated with starting a new business. This commitment to service streamlines the process and minimises the risk of costly mistakes. Because we understand the brand and the company behind it we can deliver on their vision.
A good fitout in good time
Franchisee and franchisor relationships
Wayne Billings, Director of Billings Long shopfitting, believes that two of the most critical aspects of a shopfit are the timing of the fitout and the cost involved. “We take extreme care in pricing and scheduling each project, knowing that we can deliver to expectation on time and on budget. We have worked with many franchisee systems developing and fine tuning their fitout costs so they can achieve the required price point in the market. Most franchisors will relate to the ongoing balancing act between the quality of components and finishes in the fitout and the effect these have on the overall capital outlay required by the franchisee,” confirms Wayne. “A key element in allowing us to deliver on time and on budget is our in house capabilities. We manufacture all our own joinery and signage, have our own graphic and design team and our own project management team, as well as directly employing an extensive team of tradespeople and apprentices. What this means to our clients is that we have complete control over the manufacturing and production of the fitout components in respect to both quality and timing.”
Quality service By fully understanding the brands we work with and the process their franchisees need to go through day to day, we gain the ability to confidently guide new franchisees through
78 Business Franchise Australia
One of the main things we have gained through our experience is the ability a shopfitter must have to effectively work with both the franchisee and the franchisor. On many occasions we will be contracted direct to the franchisee, but on every occasion we represent the franchisor. It is important a shopfitter understands the brand and the company they are representing. Product range, manufacturing process, market focus and culture are a few core areas. This is critical in ensuring that not only the brand identity is consistently maintained, but also that the functionality of the final project and the finer details are all delivered above expectation.
After the opening Wayne says, “Once the store is opened, our service team is on hand to take care of any teething problems. Back up and maintenance issues are all dealt with in a timely manner. Our aim is to ensure the franchisee is not only happy with the store we have completed for them, but also with the system they have bought into.”
Lasting partnerships Stan Gordon, Managing Director of Franchised Food Company, is testament to Billings Long commitment to their clients. “I formed Franchised Food Company in 2009, which holds the four franchise brands,
Mr Whippy, Pretzel World, Cold Rock and Nutshack. I was introduced to Wayne and Billings Long in 2008 by a colleague. Billings Long initially undertook work for Pretzel World, with Cold Rock following shortly thereafter.” When asked what sets Billings Long apart from other shopfitters, Stan said, “Their attention to detail, their willingness to go the ‘extra mile’, their professionalism and their on time on budget philosophy. The fact that their craftsmen are some of the best I have seen, as well as the fact they are just nice guys also helps a huge amount! “We have forged a partnership with Billings Long. They understand the vision, they are not afraid to add an opinion and not disillusioned if their opinion is not accepted. They think ‘outside the square’, which is refreshing. They understand constraints including budget, location and time requirements. They have the unique ability to provide real solutions!” Stan also stated, “Billings Long like to (and we have embraced this) become involved every step of the way, in order to meet the objectives. Simply put, they take control of the project, manage it from concept to conclusion and then beyond. Nothing is too much effort. Billings Long are proud of their work, which makes us, as a client, happy and ultimately our franchisee happy.” In conclusion, Stan notes, “Billings Long are some of the most knowledgeable people in the industry. They have integrity, which is rare in today’s society, they follow their work up, are easy and dare I say fun to work with.” If you are a franchisee or a franchisor looking for a reliable, proven shopfitter to assist you in expanding your retail food business or reassessing your current fitouts, contact Wayne Billings at:
Phone: 03 9432 5445 Email: email@example.com Web: www.billingslong.com.au
FIN A NCIA L ED UCATION
Australia’s First School of Money
ccess to high-quality expertise and advice can make or break any small business.
Whether it’s having a grasp of cash flow, financial management or even human resources, knowing even just the basics can make all the difference. Education is one of the keys to success for any franchisor or franchisee. Westpac recently launched Australia’s First School of Money – the Davidson Institute, a comprehensive educational resource of seminars, short courses, accredited courses and financial education and advice designed to help all Australians make more confident financial decisions. The Institute has a particular focus on the education and training needs of the franchise sector through; financial management, cash flow, business planning and HR short courses. In a challenging retail environment, the financial knowledge and decision making skills of franchisees will continue to be a critical factor in determining whether franchise businesses succeed, stagnate or fail. Given the subdued economic conditions that many retailers will continue to operate in over the next 12 months, now is a great time to increase the financial knowledge
80 Business Franchise Australia
and commercial capability that resides in your individual franchise business, and more broadly within your franchise system. The first financial institute of its kind in Australia, the Davidson Institute makes financial literacy accessible to everyone, regardless of their level of experience, with resources including everything from nationally-recognised qualifications through to free local seminars and a comprehensive library of financial education hints, tips and tools. Davidson Institute is a place where it’s ok to learn from scratch or build on existing skills. Importantly, you don’t have to be a Westpac customer to become a student of the Institute, however they do reward Westpac customers with a 25 per cent discount off short courses fees. The education solutions are tailored to the training needs of both franchisors and franchisees. Some franchisors have adopted the training programs on a systematic basis for all new and existing franchisees, to supplement their existing system training programs. The short courses are also a great vetting tool to help assess the commercial aptitude of prospective franchisees, before a commitment is made to sell a new store. It’s a practical way to avoid a costly mistake. Franchisees are able to enrol in public courses that are run throughout Australia, as advertised on the Davidson Institute website. The Institute is named after Sir Alfred Davidson, a former head of the Bank of New South Wales (now Westpac) during the Great Depression, and a pioneer of the importance of sound financial education. The driving force behind the creation of the Davidson Institute was an increase in demand for Westpac’s financial education services following the Global Financial Crisis, and the need to simplify that access for individuals and businesses. In 2011, Davidson Institute will continue to deliver over 600 education short courses in metropolitan locations, as well diverse
regional locations such as Kalgoorlie, Dubbo and Mt Isa.
Raising the bar in finance and business training The Davidson Institute represents a significant breakthrough in helping everyone, from individuals and small businesses, to community-sector organisations, better understand their financial options and improve their financial decision making skills.
Sharing 194 years of corporate knowledge and experience Large organisations have significant internal resources available to assist with staff training, people management and financial management. In contrast, many franchise business customers feel there are real gaps in their business’ capability in relation to those critical areas. These skills gaps were highlighted in the results of Westpac’s National Local Business Sentiment Survey, conducted with 2435 small business owners in May. The survey found that 36 per cent of small business participants ‘don’t have a cash flow budget’, and 32 per cent of participants ranked ‘managing cash flow’ as the most difficult financial factor in running a business. These statistics suggest many business owners are flying blind and have little control over the financial drivers of their business. Not a great position to be in, especially in a challenging economic environment. The Davidson Institute enables Westpac to share 194 years of its corporate knowledge and experience with franchise organisations, as well as many of the training materials that they provide to their employees. Good business planning and strong financial management skills help businesses survive and prosper, regardless of the economy in which they are trading.
It’s also worth noting that as employers, many franchisors and franchisees may be eligible to receive Commonwealth government funding, of up to $4000 per employee, towards the cost of training staff through Davidson Institute qualifications. Funding is provided by the national Apprenticeship scheme and eligibility criteria applies.
Accredited Courses Davidson Institute offers a range of nationally recognised qualifications at Certificate IV and Diploma level, across finance and business and management streams. Courses include: • Certificate IV in Frontline Management • Certificate IV in Retail Management • Certificate IV in Small Business Management • Diploma of Management Qualifications may be completed online, or through a blend of online and face-to-face learning. Davidson Institute qualifications are designed for individuals and employers. The interactive short courses cover a range of personal finance and business management concepts in an easy-to-follow, practical format. Courses cover personal and business financial management, business planning, human resources and international trade. Short courses are relevant to individuals, businesses and not-for-profit organisations. Online learning is provided via a comprehensive library of free articles and resources across a wide range of topics including: cash flow management, business planning, human resources, international trade, market commentary, superannuation, retirement planning and the fundamentals of managing your money. To find out how your business could benefit from a Davidson Institute training solution, please contact Davidson Institute on 1800 012 501 or visit davidsoninstitute.edu.au
Business Franchise Australia 81
PROFILE : BAT T ERY WO R L D
Think Green, Act Purple
Environmental initiative highlights benefits of franchisee/franchisor relationships
he huge success of Battery World’s ‘Think Green, Act Purple’ initiative has highlighted the importance of franchisee involvement in a franchise’s broader engagement strategy. General Manager of Battery World, John Pascoe, says that ‘Think Green, Act Purple’ is an excellent example of a franchisee initiative that has provided far-reaching benefits to both the Battery World network and the general community. “We work hard to ensure that our franchisees are given the necessary tools to run a Battery World enterprise. But franchising is a two-way street. Our franchisees are independently developing new strategies to help themselves become more successful within their own community. Over the years, we’ve seen some really great ideas come out from the stores - and the very best have ended up being adapted by our Support Office and rolled-out nationwide,” says Pascoe. Greg Leslie, owner of Battery World Townsville, and founder of the ‘Think Green, Act Purple’ initiative, attributes the ongoing success of the brand to its willingness to listen and engage with its franchisees. “I’d rate good communication between franchisor and franchisee at about a twelve out of ten. If the two aren’t working closely, the franchise as a whole is going nowhere,” says Leslie. In 2006, Leslie was struck by a lack of places where his customers could responsibly
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dispose of their used batteries. So Leslie introduced Battery World branded recycling bins into his store, offering a freeof-charge battery disposal service to local households. He also placed bins in 29 nearby schools, providing free education sessions to students and offering incentives to encourage their involvement. As a result of the campaign, Battery World Townsville experienced a 30 per cent jump in sales. The success of the program within Townsville saw Battery World implement the program nationwide. Today the franchise has successfully prevented some 500 tonnes of batteries and over 16,000 EPIRB’s (analogue maritime emergency beacons) from going into landfill. And more often than not, these devices have had their toxic components salvaged - saving energy and valuable natural resources and limiting environmental damage. “Batteries are an integral part of modern life. Improperly disposed batteries are a serious problem - posing a risk not only to the environment, but to human health as well. What we do first and foremost is sell batteries, so we naturally consider it our duty to help people responsibly get rid of them. “Customers can come in, drop off their old batteries and we’ll take care of their
responsible disposal. They’re under no obligation to purchase anything. It’s a way of showing that we genuinely do care about the environment and the community,” says Leslie. Pascoe says that ‘Think Green, Act Purple’ is just one example of a franchisee initiative that’s proven to be a huge success, and that there will be many more to come. “We’re honoured to be working with Greg and the rest of our franchisees to develop some exciting new strategies that we hope to introduce in the coming year,” says Pascoe. For more information please contact James Taylor at: Phone: Email: Web:
0417 192 251 firstname.lastname@example.org www.batteryworld.com.au/ franchising
L egal A dvice e xpert ADVICE
RETAIL LANDSCAPE THE T
he success of any retail franchise is inextricably linked to the success of the lease negotiations. Rent generally constitutes the largest fixed cost in any retail business, ranging from 8 per cent of sales up to 25 per cent of sales in some cases. Given the significance of the cost impost on any retail business, negotiating the lowest gross occupancy costs, and keeping them low throughout the tenancy, is a key skill to be acquired by all good retailers. The long-standing domination and concentration of shopping centres in the retail environment has long been a thorn in the side of many franchise networks, as retailers are forced to deal with shopping centres to meet consumer demand. Though industry experts would suggest that retailers should deal with landlords at their own peril, and must take responsibility for the business decisions they make in commercial negotiations with landlords, there is a clear underlying imbalance of power, given the heavy concentration in the Australian retail property environment. The problems in retail tenancy in Australia have been well documented, with very little government action or implementation of a consistent national code. There is currently nothing analogous to the Franchise Code of Conduct to level the playing field between landlords and retail businesses. Whilst franchisors face increasing disclosure requirements and regulatory burdens, the same cannot be said of large shopping centre owners, who arguably have greater bargaining power than even the biggest franchisors. In the absence of legislative change to allow greater transparency in retail rents and
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commercial negotiations between landlord and tenant, what can retailers do to level the playing field?
The critical component Information is vital and having comparable information to undertake sufficient due diligence, before proceeding with the appropriate negotiations with landlords, can prove to be the vital difference between securing a good rental deal and being lumbered with a bad one. Major shopping centre landlords have sophisticated lease management systems to monitor and analyse comparative sales data from retail tenancies, tenancy mix, trading trends, lease milestones, financial returns, network growth and centre patronage numbers. In contrast, retail chains rarely have this broad, industrywide information available to them. They therefore tend to rely on their own data, the institutional memory of senior management and their own confidence in their relationships with their leasing managers and executives.
Leasing demands Shopping centre landlords demand regular reporting of sales figures to determine percentage rents. They continue to push the limit, with base rents being squeezed as close to 20 per cent of gross sales as negotiations will allow. This increases pressure on retailers to drive store performance and sales â€“ which on renewal may simply result in further demands from the landlord for rent increases. Although few landlords will openly admit it, lease renewals are often based on what the tenant can bear, rather than the market rent for the space. The question becomes, â€˜What then happens to
those retailers who are unable to continue to meet the demands of shopping centre landlords where rents increase, fitouts get more expensive and marketing contributions increase?â€™
Request market rate for rent The key is not to use percentage of sales as a starting point for negotiations on renewals or on new leases. The criteria for rent reviews and renewals should be the prevailing market rent. If the landlord can confirm that an unconditional offer from another tenant at the rent they are asking has been made, then the rent they are asking for meets the market. If they are basing their demands on pushing the rent as close to 20 per cent of gross sales as they can, or by some other arbitrary measure, then the rent is not a market rent but a rent extracted by pressuring the tenant into fearing for the loss of its fitout. Having these negotiations at least 12 (and preferably 18) months prior to renewal, with clear examples of cheaper alternative sites, perhaps with fitout contributions included, will bring many landlords to the table, making them stand to attention as they become aware of the work put in to developing alternative site options. Retailers should also be aware of the budget cycles of each landlord. Most landlords budget for the July-June financial year. However, some large international landlords budget for each calendar year. Once a budget for a tenancy has been put in place, it is difficult to get the leasing executives to reconsider the rental deals. Therefore, retailers should make their intentions known well before the budget cycle is completed, to ensure these lowered expectations are
“Although few landlords will openly admit it, lease renewals are often based on what the tenant can bear, rather than the market rent for the space.” Marwan Kojok, Executive Partner, DCS Lawyers.
factored into the budgets. This will help make it easier to conclude a competitive deal.
Retail legislation varies Legislation is inconsistent across the country in regards to leasing. This creates difficulties for retailers in administering their affairs and seeking the information they need to make informed decisions. Although greater consistency has been achieved in the eastern states, this has not yet been achieved nationally. In addition, different states continue to have different registration requirements, adding to the administrative burden. Although many retailers consider the current legislative regime covering retail leasing to be inadequate, there is at least some protection provided. Some of this legislation allows for claims of unconscionable conduct by parties during the negotiation and continuance of retail leases, disclosure prior to entering into lease agreements and dispute resolution processes. As an example, the Retail Leases Act 1994 (NSW), and similar legislation in other states, governs retail leases for, and imposes various obligations on, the landlords. These obligations apply before the lease is entered into and during the lease term. The disclosure statement summarises the lease terms and sets out other relevant information about the premises. Importantly, the disclosure statement will provide an estimate and a break down of the ‘outgoings’ payable under the lease. If the landlord fails to give you a disclosure statement within this time, you may be able to terminate the lease at any time within the first six months. Additionally, if you find that the disclosure statement failed to mention important issues, or if it was in some way defective, you may be entitled to seek compensation from the landlord.
Can you afford a dispute Disputes are costly and for small business can be a barrier to proceeding with substantive claims against shopping centre landlords. In most jurisdictions, parties to a retail lease agreement are required to attend mediation before seeking alternate means of recourse. Whilst it may be cost effective to proceed down this path, in many cases the success of the mediation will be determined by the information made available to the retailer and the legal basis of the dispute. A landlord has a fundamental right of control over the use of its property. This right should not extend to engaging in unfair business practices. In the UK, a voluntary code of practice is applied to lease negotiations conduct during a lease. This code of practice also applies to landlord and tenant rights and responsibilities. Australia, like New Zealand, Canada and the United States, have not adopted such a code of conduct and have continued to rely on regulations developed in response to failures that arose in the retail tenancy market. There seems to be more noise now, considering the retail platform in the Australian climate, as to whether or not this will need to be revisited.
Some things to consider when dealing with the landlord • Confirm that the permitted use of the premises corresponds with the intentions for use of the premises. • Ensure the lease term, and an option to renew, coincide with the terms of the franchise. For example, it is unwise to enter into a three year lease if entering into a five year franchise agreement. In our experience, many shopping centre leases do not provide for an option to renew. This
creates significant problems at the end of the lease term.
• Check if the lease is assignable - in the event that the business is sold prior to expiry of the lease term.
• Verify the total payments under the lease (including outgoings), and carefully consider whether the proposed business will be able to afford those payments, both now and in the future. • Consider the amount of rent payable and understand the timing and calculation of rent increases; also ascertain the amounts of any additional payments required such as insurance, maintenance, marketing fees, fit-out costs and outgoings, or shared operating expenses as outlined in the disclosure statement; • Confirm that all representations made by the landlord have been reflected in the terms of the lease.
• Fitout contributions (if any) should be adequately recorded and tested, taking into consideration the suppliers and trades people required to conduct the work.
• Ensure that any percentage rents are based on market and network expectations. Marwan Kojok is a leading authority in the franchising, licensing and distribution sectors. DCS Lawyers are leaders in franchising, licensing, distribution and intellectual property. Specialising in both commercial and corporate law, DCS Lawyers provide top level, practical legal advice at a fixed fee. Contact Marwan at: Phone: 02 8220 8750 Email: email@example.com Web: www.dcslawyers.com.au
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PROFILE : A N Y T I M E FI T N ESS
The New Face of the Fitness Industry!
ustin McDonell and his sister Jacinta McDonell Jimenez launched Anytime Fitness, the highly successful USA franchise, into Australia in 2008. Since then it has become the quickest growing segment of the world’s fastest growing fitness chain, with over 80 clubs open throughout the country in just over two years and further rapid expansion in the pipeline for 2011/2012. Both the gym concept and business model were unique to the industry. Typically the industry was dominated by larger chains that had everything from juice bars to group exercise classes and crèches. In comparison, Anytime Fitness gyms provide members access at any hour, with 24 hour entry, state-of-the-art equipment and top notch facilities 24/7. Local franchisees also offer communities an exceptional product at an exceptional price with the added benefit of convenience; clubs are located near to home to make exercise easier for members. Trained staff or franchisees are available during normal trading hours to provide assistance in using the equipment and working with members to identify and achieve their goals. After hours, members can access the gym safely and securely by using their key card. The franchisee can then monitor the gym from anywhere - the Anytime Fitness franchise model was built around the concept of freedom. Anytime Fitness franchisees can run multiple clubs remotely and require low labour, providing them with more free time and a balanced lifestyle. Anytime Fitness’ monthly franchise fees are also low and fixed, which allows franchisees to benefit from their own business’ growth. Justin McDonell says, “Freedom is what sets Anytime Fitness apart from our competitors. We offer franchisees the freedom to operate their business to suit their lifestyle, freedom to grow within the system and the freedom that comes with knowing they have the support and back-up of the world’s fastest growing fitness club franchise.”
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This business model allows flexibility and autonomy to the clients who use the gym, as well as to the franchisees who own the gym. With minimum staff requirements and secure, remote access to the premises, Anytime Fitness is appealing to individuals who are eager to have a successful career and the free time to enjoy life as well. The combination of all these factors has resulted in Anytime Fitness becoming recognised as one of Australia’s fastest growing companies by BRW magazine. The annual Fast Starters issue has listed Anytime Fitness Australia at number 46 in its run down of the 100 fastest growing companies in the country, and the fitness franchise is also the only fitness organisation to make the top 100 cut. This recognition only strengthens the growing opinion that Anytime Fitness is
becoming the new face of the Australian fitness industry, with other fitness models no longer owning the market and Anytime Fitness moving towards becoming the market leader in the industry. Jacinta McDonell Jimenez comments, “Our members love the fact that our clubs are not only convenient and affordable, but that they are not intimidating to workout in. They really do see the club as their club, and this is something that the majority of larger clubs can’t achieve. Many of our members share the passion that we have for our brand and that is great to see.” For further information on Anytime Fitness contact: Phone: 02 9415 5300 Email: firstname.lastname@example.org Web: www.anytimefitness.com.au
Financing your franchise purchase How do you do it?
aking the decision to invest what is sometimes your life savings, into a business, is a major step and one full of perils. As such, this process should never be taken lightly. Assuming that you have completed your due diligence and reviewed the franchise system, the support, the product offering and you understand the financial commitments of the purchase, the next question you need to address is the finance. Obtaining finance for any purpose is not a simple process, especially in the wake of the global financial crisis. Franchising is, however, very well regarded by the banking sector and, luckily for us all, there are usually policies in place that help obtaining finance easier. As with any lending product, there are a number of factors that must be addressed before you will get the loan. Can you afford the loan – called servicing? Is there enough security? Are the borrowers reputable? Is the franchisor reputable? All of the major lenders have policies on the strength of a franchise system. They have previously reviewed the franchisor and the system and assessed the markets appetite for the purchase of that type of franchise. Effectively, they rank the franchise system in a tier that ranks the risk for the lender providing the funding and not getting their money back. The tiers are very much a simple A, B or C level and dictate the
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maximum amount that the lender will allow for the purchase of a particular franchise.
A banking example One of the major banks has a policy in place that states a certain franchise retailing mobile phones and other aligned products to consumers is a good risk. This franchise produces significant recurring income, their marketing works quickly, it is a growth product and there is very little stock required to be held in the shop. The bank, therefore, will lend up to 60 per cent of the total cost of the franchise system, plus stock. So if the franchise fee, fitout and stock would total $500,000, they will gladly provide you with $300,000 of that as a loan, purely against the security of the franchise itself. This is called a fixed and floating charge. Similarly, this bank has rated a system that sets up mobile dog washers as a risky venture. This franchise usually does not sell easily, cash starts slowly and builds only with increased marketing and good operators (who get many referrals by word of mouth). The bank is reticent to provide any sort of lending, but will give 25 per cent of the cash, with a personal guarantee from the franchisee and a proven existing franchise close to the territory being set up. The balance of the funds required will have to come from the franchisee, either with their own funds or from equity released from property that they own.
Can the finance work? This is all very good, but unless you are comfortable with the business model, it is irrelevant what the lenders will provide. In my experience, it is critical that anyone going into business prepares for that move properly. Whether it is franchising or a non-aligned business, understanding where your sales will come from and what the costs of your operations will be, is critical in determining whether the business can afford your time, let alone the costs of a loan. Setting up an achievable forecast or budget is critical to understanding the cash flow requirements of your business. Unless you are a highly competent management accountant, I strongly suggest that you work with an expert to get this right. That expert is neither your tax accountant nor the franchisor. It needs to be an individual or company who is experienced in franchising and strategically driving businesses. Too often forecasts that I come across have numbers which are rubbery – i.e. can’t be argued strongly, lack the understanding of when cash will come into and go out of the business, or are too aggressive at achieving positive cash flow and profits. Cash is king. If you don’t have enough, it is irrelevant trying to be profitable. Your sales figures should be based on market research, existing franchisee performance or some other identifiable method of determining your potential market share.
“Obtaining finance is not simple, but also not impossible..” Colin Linke, Managing Partner, Bentley Partners.
Being honest Whilst the major lending institutions will have policies that make it easier to obtain finance, your ability to service the loan will depend on the forecasts and the performance against those forecasts. I often tell clients that this forecast is a little like losing weight. You can cheat and manipulate the numbers to provide a picture that, when hung on the fridge, looks OK. However, you are only cheating yourself if you put something up that is not completely honest.
How banks decide The banks will look at a number of factors. The one that appears to be utilised extensively is times interest cover. This is simply the amount of profit generated by the business in a year, divided by the interest charged on the loan. The magic number recently is 2.5 times. So, as an example, if the total interest charged for the year is going to be $100,000, the bank will want to see that there is $250,000 of profit left before interest and tax is charged. The definition changes between lenders. I have also seen recently a need to cover the capital repayment as well, so the above example is very much a guide only.
Words to know The next critical factor in obtaining financing is determining the actual facilities that are required. Here is a list of a few words you should be familiar with when considering financing. • Mortgage – loans secured against property. Usually limited to 80 per cent of
the value of a residential property and 60 per cent of a commercial property’s value. • Overdraft – a loan applied to your bank account that is usually secured against the business. • Business loan – a loan that is provided for business purposes and usually secured with a combination of a right over the business and/or against real estate. • Chattel mortgage – a loan provided for an asset purchase, such as a car, that is secured against the asset only. • Commercial bill – this is a high level loan, usually more than $1 million, which is secured against the business, real estate and the director’s personal guarantees. • Debtor or stock funding – this loan is provided against the stock or the debtors of the business. It can be an onerous form of funding and usually requires regular reporting and potentially audits.
Getting it right Getting the type of finance right is important, as the costs of each of the above differs wildly. The less security you have, the higher the interest rate charged AND the fees charged. You need to watch this carefully. A final word about guarantees. Many new businesses will be asked to sign director’s guarantees for loans provided, often for trading accounts with suppliers. My recommendation is to at least try to NOT sign any of these with suppliers. You will need to so with formal lender, but often suppliers will trade without these in place. Each guarantee that you provide will increase
the amount you are personally liable for and in bad times this can be an issue if a default is issued against yourself personally. Just be careful. And finally, there is a second tier of lenders that provide access to private equity funding, usually via second mortgages against your properties. This is a very costly form of funding and is never the right solution, in my opinion. However, it is available as a last resort.
Conclusion Obtaining finance is not simple, but also not impossible. Prepare your budgets correctly and be prudent. Where possible, provide the lender with as much security as possible and be patient. It can take time to close a lending deal for business purposes. Colin Linke is a CPA and Managing Partner of Bentley Partners, which specialise in business growth, franchising operations and performance management. He has over 20 years of experience in the area. Bentley Partners is associated with Alliance Financial Group, which is a specialised finance broking business that assists franchisees and small business owners in obtaining finance. For more information please contact Colin at: Mobile: Phone: Email: Web:
0409 421 402 03 9681 3099 email@example.com www.bentleypartners.com.au
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PROFILE : SN A P- O N TOO LS
SNAP-ON A LONG TERM INVESTMENT
he continued success of Snapon has necessitated significant investments to propel its growth to the next level.
Investment in infrastructure The growth of Snap-on Tools has been tremendous. This expansion required a move to a larger building. The company had outgrown its Sydney premises, which had been its home for 19 years. In September 2010, the company relocated the business to a more efficiently planned building in nearby Arndell Park. The facility has the capacity to handle the expected organic growth for many years to come.
Investment in systems The company’s continued growth also required an investment in new systems. In January, Snap-on introduced new systems to support the continued growth of the Trade Card programme, which helps customers purchase bigger ticket items. Snap-on also recently migrated its business systems to a new ERP platform. This is now being used throughout the corporation. New software is currently being trialled for use by franchisees in their Snap-on mobile showroom and will be launched this October. These system enhancements will drive efficiency, assist the franchisee in their back office function and improve the service to customers.
Investment in diagnostics Over the past 15 years, vehicles have become more computerised and increasingly complex. Snap-on has recognised that with the increasing sophistication of motor vehicles, diagnostics represents the future of its business. It also recognised
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that some franchisees were savvier than others with the use of technology. However, the company needed to ensure a consistent experience for the customer. So, Snap-on first introduced a ‘Diagnostic Help Desk’ for its customers. This help desk facility has become very popular and averages around 60 calls per day. Snap-on also introduced the ‘Diagnostic Product Specialist’. The introduction of these diagnostic specialists meant that the franchisee, who well understood the customer’s needs, was able to call upon these specialists to assist in the sale of diagnostic products. To compliment the ‘Diagnostic Help Desk’, Snap-on also provides end user customers diagnostic training courses. In 2010, this investment in education saw some 3600 technicians update their skills.
Investment in sales development manager training Snap-on supports its franchisees through a network of Sales Development Managers and Business Managers. The Sales Development Managers have been selected from either the franchise network or from outside. Their primary role is to assist the franchisee grow their business and provide the necessary support to achieve that goal. They report to a Business Manager, who has extensive Snap-on experience. The Sales Development Managers recruited from outside the business, typically spend six months in a company-owned mobile store. This allows them to experience first-hand the life of a franchisee. This significant investment in set- up costs and training ensures that incoming Sales Development Managers are qualified to assist and support the franchisee.
Investment in franchisee support There are 17 Sales Development Managers and Business Managers supporting 160 franchisees. In total, Snap-on employs over 100 employees whose primary concern is the success of the franchise network.
Investment in Franchisee finance Prospective franchisees have encountered delays and challenges in obtaining bank finance. So, Snap-on has recently introduced a franchisee finance programme. The company offers normal loans at competitive interest rates, spread over 10 years. This assists franchisees to enter into the business. A highlight of this finance programme is the zero repayments required in the first three to six months that the franchisee is on the road selling tools. This enables the franchisee to establish a positive cash flow before repayments begin. In addition, a short term GST loan is provided, repayment of which coincides with the GST refund.
The outcome These investments have directly benefited the franchisees. Sales continue to expand and despite the higher interest rates and continued squeeze on retail spending, the Snap-on franchisees have, over the past three years, averaged sales growth of 6 per cent per annum. This confirms Snap-on Tools belief that investing in the company means more growth for the company as a whole and more success for the core of the Snap-on team – its franchisees. For more information on Snap-on Tools franchise opportunities contact: Nick Hudson Phone: 1800 762 766 Email: firstname.lastname@example.org Web: www.snapontools.com.au
OFFICE WITH A VIEW
COMPLETE SHOP ON WHEELS
NO REAL ESTATE INVESTMENT
1800 762 766 www.snapontools.com.au
PROFILE : bo dy & h e a lt h so lu t i o ns
Your path to good health
ody and Health Solutions is part of the Watergardens Wellness Centre. The Watergardens Wellness Centre was founded seven years ago by Trinh Nguyen. As part of the company, Trinh started Body and Health Solutions because she believed it was possible to help people to lose weight and get fit safely and effectively, without the need for risky and expensive surgery and other invasive procedures. Due to the success and affordability of the techniques used at Body and Health Solutions, Trinh decided to start franchising in 2009. Trinh believes the franchise model is perfect for those wanting to start their own beauty franchise. “I chose the most effective equipment for this franchise,” says Trinh. She states that the equipment is easy to use and minimises set up time. The equipment is good for pain relief, weight loss, skin tightening, fluid retention and eliminating cellulite.
Burns up to
• post pregnancy recovery • weight loss • body contouring • increased energy These treatments are open to anyone, but are especially suited to those who cannot exercise due to injury or other medical conditions. According to Trinh, once she started Body and Health Solutions, she knew she had a formula for success. “I always knew that Body and Health Solutions was going to be big, and if we wanted to grow quickly then the people in the company needed to have ownership. There’s nothing like having everything on the line to make a business work well.” This is why Body and Health Solutions began franchising. The company is looking for people who have a desire to help. Franchisees should be motivated, passionate and confident in their desire to help others look and feel good. Body and Health Solutions wants to work together with their franchisees.
1200 calories in one session Trinh is a pharmacist who then specialised in weight loss. With her background she wanted to share her belief that weight loss could be fast, painless and affordable.
“I want to create a “healthy Australia,” says Trinh. “The Formostar Body Wrap machine utilised by Body and Health Solutions is wonderful for weight loss and body contouring, but not many people in Australia know about it.”
The franchise team is extremely supportive and passionate about their treatments. They are honest, energetic and eager to help their franchisees succeed. As the franchise model is very straightforward and easy to set up, new franchisees can get up and running quickly. New franchisees are given two full weeks of training and one full day of on-site support. Once a franchisee has started, ongoing support is always available. Trinh and her staff are eager to have franchisees throughout Australia and all inquiries are welcome. There are several different business models to choose from.
• TARGETED FAT AND CENTIMETRE LOSS Trinh comments on the knowledge of this system in other parts of the world by saying, “It is widely used in Europe and other countries.”
• DETOXIFICATION, CELLULITE REDUCTION The treatments provided by Body and Health franchisees offer lots of benefits to clients including:
• AND MUCH MUCH MORE... • pain relief • relief from arthritis • eliminating fluid retention
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For more information contact Trinh at: Phone: 03 9390 6609 Email: email@example.com Web: www.bodyandhealthsolutions.com.au
Safe and effective 50 minute sessions
FORMOSTAR FAR INFRARED BODY WRAP
Contact Trinh for more information (03) 9390 6609 firstname.lastname@example.org www.bodyandhealthsolutions.com.au
FR A NCHISOR IN D EP TH : SCHNIT Z
IT’S ALL ABOUT
COME HOME TO SCHNITZ – REAL HOME COOKED FOOD
hen it comes to schnitzels, it’s a family affair in the Dyduk home. Schnitz Franchising Pty Ltd is a private, Australian company owned by Roman Dyduk and his two sons, Andrew and Tom. At the core of this franchise system lies the family belief that they have the best product in town. The Dyduk family is seriously passionate about their schnitzel!
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Enter Roman Dyduk, Director, father and schnitzel making king. Roman has over 35 years’ experience in setting up and operating cafes and restaurants. Through all those years, Roman has been cooking incredible, home cooked, made to order schnitzels. According to legend, Roman acquired his perfect schnitzel making technique in a small Jewish restaurant in St Kilda, back in 1974.
Roman’s mouth-watering recipe got such rave reviews from his customers that it became apparent that the family should franchise. This was a natural growth goal, as Roman had successfully opened and run 13 different restaurants over the years. Apart from his talent in the kitchen, Roman also has a keen eye for site selection (an integral part of the business strategy) as well as expertise in store fitout. As hospitality had been an integral part of the Dyduk family, it was only natural that Roman’s two sons, Andrew and Tom, would bring their areas of expertise into the mix. According to Andrew Dyduk, Director, Australia has taken the traditional schnitzel concept and made it into a processed, instant fast food meal. The commercialised versions of schnitzel you see in shops – the ones cut into hearts – are far removed from the traditional recipe. Schnitz has stayed true to the original recipe. The key, according to Andrew, is in the preparation. Pan fried with a tiny bit of oil and made fresh to order, each schnitzel is cooked with pride.
Andrew’s role with Schnitz franchising includes franchisee selection, strategy and development, marketing and advertising, as well as sales and administration. With a strong background in IT, spending 12 years running his own web development company, Andrew brings a wealth of business experience and knowledge to the team. Andrew will work with new franchisees to help them attract local customers. He will also prepare marketing plans and action lists for franchisees to help them attract and retain great customers, improve average dollar sales and generate higher revenues and higher profits. Andrew also cooks up a wicked schnitzel. Tom Dyduk, also an expert in the kitchen, heads up operations, training and HR management. Tom has been entrenched in the hospitality industry since the age of 13 and has experienced all aspects of the food industry. Tom will provide training on all aspects of running your new business, including how to recruite, train and retain great staff. He will also assist with all matters relating to the operations of your Schnitz franchise.
Tom studied business management and has been involved in the fitout and operation of seven of the family’s restaurants. Tom also has sales, logistics and warehousing experience. Tom is yet another super schnitzel maker. So when the Dyduk boys say, ‘Join our franchising family’ – they mean it. Schnitz brings great taste together with sound, successful, proven business strategies to provide a fantastic franchise opportunity. Schnitz is the only schnitzel franchise in Australia and as a result it holds a unique position in the food retail marketplace. Aside from making the perfect chicken schnitzels, the Schnitz brand now accommodates for all sorts of tastes. The menu range now offers ‘Health Saladz’, ‘Rollz’, ‘Wrapz’ and also vegetarian options. So every customer can have the option to try something delicious at Schnitz. All Schnitz items are made using only the finest fresh ingredients from quality Australian suppliers. As a franchisee, you will be proud to serve the freshest, tastiest food in town.
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e x pert FR A NCHISOR a dv iceIN D EP TH : SCHNIT Z
The business model is commercially viable and has very strong customer appeal. People are shifting towards healthier, yet more convenient food. Schnitz offers great taste and fast service at a reasonable price.
• inventory management and stock control
succeed and achieve their goals.
• food hygiene and safety
As a young franchise system, Schnitz is eager to grow and has a well-developed expansion strategy in place. They are looking for new franchisees who share their passion for food and success. Schnitz currently has four stores operating in the Melbourne area. Future plans include expansion within Victoria for 2011, then into New South Wales in 2013. From there it is on to Queensland, South Australia and Western Australia.
• business strategy planning
This is not a trendy franchise. Schnitzels are part of Australian culture and with the great taste of the Schnitz products, it is easy to build a loyal and dedicated customer base.
So opportunities abound. All new franchisees receive a minimum of four weeks of comprehensive, on-the-job training. While your store is being built, Schnitz will have you come and work in a company owned store for a week or two to see how everything works. In addition to hands-on training, Schnitz provides the following training and support: • use of all equipment • point of Sale terminals • food preparation and presentation
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• labour management • local store marketing • goal setting Schnitz believes this comprehensive training program, along with their passion, drive and commitment to their franchisees success, sets them apart from other food franchise systems. Joining the Schnitz system will help you make your mark on the world. This is the time to act and get in on the ground floor of this unique business. As this is a new franchise venture, there are single, multi and master franchise opportunities that will become available. The team will first want to see how you go with your first franchise, but if you are eager to achieve success, you will have the opportunity to grow with the company. As a family owned franchise, Schnitz believes in sharing our dream and getting people on board who want to work hard and have fun at the same time. They are dedicated to helping their franchisees
Schnitz and the Dyduk family would like to share their dream for success and their passion for schnitzels with other like-minded people. Potential franchisees should have a positive attitude, be willing to work hard and have a willingness to learn. Success will come from a franchisees energy and enthusiasm toward building their business, partnered with strong leadership skills and dedication to providing excellent customer service. The team at Schnitz has worked very hard to build a strong, efficient and stable business system that offers franchisees an exciting new career path with a great return on their investment, as well as a superb source of cash flow – and of course, great schnitzels! To find out more about joining the Dyduk family and the Schnitz franchise system contact Andrew at: Email: email@example.com Web: schnitz.com.au
ONLY 4 FRANCHISES AVAILABLE Be a part of the Billion Dollar Shed Industry
BBX Franchises for sale FINALLY...A CARD THAT generates BUSINESS
ShedsnMore outlets are independently owned and operated, competitive in price and range. Starting your own successful business with ShedsnMore is easy. We provide a proven system with comprehensive training, state of the art computerised quoting and ordering, brochure and television advertising, plus all the support you need.
Why open a ShedsnMore outlet? Be your own boss Low entry cost Have control of your own valuable business asset Support from the whole team at ShedsnMore Be personally rewarded for your own growth Product, sales and business development training Large secure business territory Comprehensive marketing
Express your interest today only 4 available! Register you interest online at firstname.lastname@example.org or contact the Franchisor directly on (03) 9308 0222.
BENEFITS INCLUDE: Guaranteeed new Business More sales, new customers, less competition Better Productivity bigger profits
Save Cash and improve cash flow Interest free trading facility up to $50,000
Can you recruit business owners who will welcome these benfits? then why not consider a franchise with BBX? BBX is looking for keen white collar professionals to expand its franchise network and help grow its membership base. You will be helping small and medium businesses grow whilist generating a long term sustainable franchise income
APPLY TODAY AND CHANGE YOUR LIFE FOR THE BETTER, BY BECOMING A BBX FRANCHISE OWNER WITH THE WORLDS MOST PROGRESSIVE TRADE EXCHANGE
email@example.com 02 9499 1121
Business going “swimmingly” for PoolWerx Franchise Perth locals Ian and Irene Hughes first bought their PoolWerx franchise seven years ago, and their business has grown from one mobile van to four retail hubs* with a combined turnover of $1.5million. Ian and Irene have received numerous accolades for their business success, including PoolWerx Franchisee of the Year 2010. “There’s no doubt we’ve put in the hard work to get where we are, but we’ve also seen the rewards thanks to the PoolWerx system. We have a loyal customer base of both residential and commercial clients, our profits have increased every year and we’ve been able to create a very comfortable work life balance that suits the needs of our family.” “Being in a franchise system gives you a solid foundation to build your business on, as all the processes are already available for you. Being a PoolWerx franchisee isn’t just a job; it’s a career path and one that can be very rewarding once you dive in!” Call PoolWerx today to discuss your next step on 1800 245 447 or visit www.poolwerx.com (*Ian and Irene co-own two of their four retail hubs with other PoolWerx Franchisees)
Irene & Ian Hughes
focus : M YCO ReExpert PRO PERT I ES ADVICE
MYCORE Properties Looking out for the little guy
magine a property company that had your best interests at heart. A company that actually discussed what you were looking for and what you could afford in a retail space. A property company that actually wanted you to be successful and thrive. In the current atmosphere of huge property investment companies whose primary
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focus is to attain as much rent as possible â€“ regardless of the impact on their leases â€“ it is nice to know that MYCORE is different. MYCORE is a assent management company that cares about people. Their focus is not huge flashy shopping malls. MYCORE focuses on localised, Queensland community based shopping precincts that can provide low overheads to tenants.
In a retail environment where sales are down and rents are up, franchisees need to be very conscious about where they choose to lease. Several factors have come into play recently that directly affect the leasing industry. The first crucial point is that the huge property companies continue to hike up rental rates, often based on what they can squeeze from the tenant as opposed to what the market dictates.
The other thing to consider is, for many franchise systems, it is the franchisee who is ultimately responsible for the lease. This means when sales are down and rent costs continue to rise, the franchisee suddenly cannot pay rent, cannot pay staff and could potentially lose everything.
exist between owners, managers and tenants. They also understand the barriers to business success. Their creative business growth solutions formulas and industry expertise lowers these barriers and allows for innovation and the opportunity for growth for both the site owners and the tenants.
This does not trouble the big boys – the huge property conglomerates. At the end of the day, as long as they get their money – it’s all good.
MYCORE CEO, Phil Black, truly is looking out for the little guys. “I want to help franchisees make money. Our goal is to support small business. For us, it is paramount that our tenants are successful.”
MYCORE has a different philosophy. Their goal is to manage a shopping precinct where the tenants can thrive. They focus on flexibility in light of what the franchisee wants or needs. The team at MYCORE take pride in finding the right tenancy mix for each shopping precinct. This is essential for the success of each individual shop within the centre. The company understands the complex structures and fragile relationships that
Phil believes in the power of small business. To help each tenant reach their own personal success, MYCORE offers a choice of leasing options, a sales to rent ratio that stays in balance and in-house sustainability modules for all new tenants to help them grow and monitor their business. Localised shopping precincts eliminate the high rental rates and competition of large shopping complexes. Your customers enjoy
the convenience of having their favourite shops close to home with convenient parking. You enjoy getting to know your customers by name and the confidence of a continuous traffic flow through your area. If you are currently considering finding a retail site, check with MYCORE. You will find a friendly, helpful management team who can help tailor a lease agreement to help your new business thrive. If you are currently in a lease that is costing too much, with too many restrictions – don’t despair. Phil states, “You always have options. You can renegotiate your lease terms, leave at the end of term, reduce your space and your overhead, change your business model or move to MYCORE and save!” For more information on working with MYCORE contact Phil Black at: Email: firstname.lastname@example.org Web: www.mycoreproperties.com
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e x pert a dv ice
Marketing vs. Advertising What’s the difference?
n the advertising and marketing world, there is a level of apprehension in regards to the trustworthiness of marketing professionals. I think this stems from the fact that some marketing experts are inclined to make unsubstantiated promises in order to get a sale of a particular advertising package. They make promises as to how many leads will be generated and sales that will be made as a result of these leads.
Marketing Marketing effectiveness is best measured, I believe, by sales. Actual dollars. Not the number of leads. Therefore, a good marketing expert will help a company
address any issues that may hamper a lead turning into a sale. Companies should understand that the way they communicate with the customer at every touch point - telephone, email, online or in person - is a marketing opportunity and responsibility. The success or failure of the best marketing plan in the world and/or the most creative advertising campaign can be damaged by how the customer perceives the level of professionalism of the company in any of its initial interactions. Have you ever heard of a company and then been wowed by their web site when you started to do some investigations? Has a company’s sales representative ever disappointed you by how rude, or inattentive they were? It is all marketing.
Advertising Advertising can, in many cases, ensure that a customer will be delivered to the door. However, a great marketing plan will ensure that the prospective customer is welcomed and becomes an actual customer. Advertising is just one component in the marketing plan. It is most definitely an essential part of the marketing mix.
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Some may say it is the ‘sexy’ component of the marketing mix, because it usually attracts the highest profile and commands the most dollars in investment terms. If a company is not addressing every single individual component of its marketing, then the pressure and subsequent unrealistic reliance on advertising alone to deliver a ‘return on investment’ (ROI) will almost certainly guarantee disappointment.
The plan An effective marketing plan will include quantifiable research. This will in turn assist in the development of products and services and the subsequent sales of these products and services to customers. The marketing plan will also detail how the company will go about promotions via advertising mediums. The plan will also address the many other components of the advertising mix - including media advertising of all forms, publicity, public relations (PR), print and online media campaigns. All of this advertising is undertaken with the ultimate goal of achieving sales. A marketing plan also details the strategy that underlies the sales techniques, business and consumer communication processes and business developments. An effective marketing plan presents the complete integrated process through which companies build strong customer relationships and create value and perceived value as well as loyalty to their customers.
“Companies develop brands that are remembered for their advertising but are successful as a result of their marketing.” Les Hall, Founder, AdMarketing.
Marketing practices and strategies are used to identify the target customer by asking questions such as: • how old are they? • where are they more likely to live? • what are their buying habits? • are they married or single? • are they young or old? • do they have children? • are they single or divorced? All of this knowledge is acquired by accurate quantifiable research of customer’s buying habits and trends. This helps the company identify their specific audience and then continue to satisfy and retain their customers. With the customer as the focus of its activities, a detailed, carefully constructed marketing plan is one of the major components of a successful company’s business management plan.
Consumer needs Marketing has evolved. It is now responsible for the development of new products and services. Marketing should enable companies to anticipate consumer wants, needs and desires. The adoption of much more detailed marketing strategies requires businesses to shift the focus from production and delivery to the understanding of the perceived needs, wants and desires of their customers as a means of remaining profitable, viable and relevant to the consumer. An effective marketing plan proposes and demonstrates that, in order to meet objectives, a company should (with the benefit of quantifiable research) anticipate the needs, wants and desires of consumers and satisfy these more effectively than competitors.
Advertising is simply designed to persuade or influence an audience (viewers, readers or listeners) to purchase or take some action to purchase products, ideas or services. Advertising usually includes the name of a product or service and how that product or service will supposedly benefit the consumer.
Branding This strategy or gentle art of persuasion is usually focussed on a specific target market. The goal is to influence the consumer to purchase or to consume that particular brand. These messages are usually paid for by companies and viewed or heard via various mass media. Advertising can also serve to communicate simple ideas and concepts to a large number of people in an attempt to convince them to take a certain action. Commercial advertisers often seek to generate increased consumption of their products or services through branding. This involves the constant repetition (referred to as a high frequency campaign) of an image or product name in an effort to associate related qualities with the brand in the minds of consumers. There are a number of non-commercial advertisers who spend money to advertise items, products or services or solicit money and donations. These can include charities, political parties, interest groups, religious organisations and governmental agencies. Non-profit organisations may also rely on free modes of persuasion, such as public service announcements.
Media Mass media can be defined as any media which is focused on reaching a mass amount of people. Different types of media can be used to deliver these advertising messages - including traditional media such
as newspapers, magazines, television, radio, billboards or outdoor advertising signage. It can also include direct mail, junk mail, electronic direct mail (EDM) or new media such as websites and text messages. Social media methods that incorporate Facebook, Twitter, LinkedIn, MySpace and others are also defined as new media. These outlets are proving to be, in some cases, as effective, or more so, than mass media such as television advertising. I heard American talk show host, Jay Leno once say, “Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime. Teach a man to create an artificial shortage of fish and he will eat steak.” Such is the power of marketing, advertising and the media and its ability to influence the marketplace. There are many successful companies that believe their business should only have two functions - marketing and innovation. There is enough evidence to suggest that these companies develop brands that are remembered for their advertising but are successful as a result of their marketing. That is the major difference. Les Hall A.F.A.I.M. is the CEO and Founder of AdMarketing Australia. Les Hall has been acknowledged with no fewer than 32 international awards for creative excellence and marketing effectiveness. He has been the driving force in helping many of Australia’s leading brands become household names. Contact Les at: Mobile: 0408 888 537 Email: Les.Hall@AdMarketingAustralia. com.au
fra nchise awar ds
Australiaâ€™s Top 10 Franchise Systems Revealed T
he latest survey from Topfranchise reveals the Top 10 Franchise Systems. Now into its third year, Topfranchise has surveyed over 3000 franchisees (from over 80 systems) across Australia in the last three years. Topfranchise.com.au is a free consumer resource. Research house 10 THOUSAND FEET started the annual franchise channel review three years ago. Topfranchise.com. au is supported by subscription fees paid by franchisors for surveying their franchisees. It allows users to benchmark franchisors against average industry performance across seven categories and provides links to franchisor websites, news articles, video profiles and testimonials. Ratings in each category are updated bi-annually, based on the results of 10 THOUSAND FEETâ€™s ongoing Franchisee Satisfaction Surveys. The site allows potential and existing franchisees to review the best performers in the following key categories: Intention to renew, willingness to recommend franchise to others, financial return, lifestyle, brand passion, franchisor support, expansion opportunities.
Award Calculations The awards are based purely on franchisee satisfaction. We ask franchisees 35 questions that relate to their satisfaction with their
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franchisor and franchise system. The questions span operations and the operating model, marketing, finance, human resources and franchise culture. We weight some questions with greater importance than others. The weightings are determined through sophisticated (multivariate) analytical techniques which show us what elements are most important to get right to make franchisees satisfied.
The way franchisees view what satisfies them is different to the way franchisors would traditionally set up their divisions. Often we find a franchise system will perform well across all categories, other times we find certain businesses are fantastic from a lifestyle perspective, but maybe not so good from a financial perspective or vice versa. For the full top 10 in different categories visit topfranchise.com.au
Based on these criteria â€“ the winners are: Topfranchise.com.au Overall Top 10 - May 2011 Rank Company name
How Many Franchisees In Australia
How Many Units/ Locations In Australia*
Mister Minit Mr Rental
Snap-on Tools Gametraders
*This refers to the combined number of business units owned and operated by the company and its franchisees.
PROFILE : J I M’S ROO FI NG & FLOO R I NG SERV ICES
GETTING THE JOB DONE
FROM ‘TOP TO BOTTOM’
the brand a few months ago, appointing a team of people that are experts in their profession, committed also to growing the new divisions. “Over the coming months, we will officially launch in all states of Australia. We are moving quickly and we’re excited about the prospect,” Cameron said. Jim’s Roofing & Flooring Services, Gutter Guard and Insulation have appointed two brand ambassadors to assist with the launch – Brisbane Lions captain, Jonathan Brown, and Australian Opals player, Abby Bishop.
Jim’s Roofing & Flooring Services has engaged Brisbane Lions captain Jonathan Brown (pictured) and Australian Opals player Abby Bishop to be brand ambassadors.
wning your own business can be one of the most rewarding experiences you have in your lifetime. However, starting your business journey can sometimes feel like a lonely one. You’re never alone when you join Jim’s Group! Undoubtedly Australia’s greatest franchise story, Jim’s Group has more than 30 divisions, 250 franchisors and 3100 franchisees operating across four countries around the world. In just over 20 years, Jim’s Group has become an Australian business phenomenon. Jim’s Roofing & Flooring Services, as well as Jim’s Gutter Guard and Jim’s Insulation, are progressive and exciting divisions with the clear vision of becoming Australia’s most recognised, successful and profitable specialists in their field. Director, Cameron Knight, gained his franchise experience and passion with another franchising juggernaut, Boost Juice,
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where he worked with the founders for many years. Cameron was drawn to the Jim’s Group as a result of the ‘outstanding branding’ that every one of the Jim’s Group divisions enjoy. “The opportunity to become a Jim’s Group Divisional was an exciting one, given the enormous recognition of the brand,” Cameron said. “Jim’s Roofing & Flooring Services, Gutter Guard and Insulation are divisions that present enormous potential, especially with a passionate, driven and motivated person at the helm. “We want to position ourselves as the team that looks after the needs of its clients, ‘top to bottom’,” stated Cameron. The new divisions help us to manage all roofing and flooring needs, including tile restoration and re-roofing, roof cleaning, new gutters, gutter guard and gutter cleaning, insulation and all flooring needs (including refurbishing, renewing or replacing). “We have moved swiftly since re-launching
“Jonathan (AFL) and Abby (Basketball) are both superstars in their sport and they are down to earth, friendly and engaging people, that’s what the Jim’s Roofing & Flooring Services’ brand represents. “They will be the faces and voices behind the brand. Radio advertising with Jonathan has already proved to be extremely successful,” Cameron said. The new divisions are keen for regional franchisees across Australia. Those who join the team can expect outstanding support: • We have a consistent high level of reliable and responsible work. • We undertake all work in accordance with current best practices methods. • We issue a Certificate of Compliance with all work carried out. • We handle all the paperwork. • We provide national advertising support. • You’ll receive full access to our infrastructure systems. To join the Jim’s Roofing & Flooring Services, Jim’s Gutter Guard or Jim’s Insulation team, contact Andy Baxter on 131 546.
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FCA : EDUCAT I O N I N I T I AT I V E
Franchise education Practical training to build better business people
he franchise sector has come of age. In these days of strong competition between products and services, business skills can mean the difference between success and failure. Growing numbers of franchisors are recognising that formal education, tailored for the franchising sector, is not only useful, but arguably essential to establish a healthy future for a franchise network.
But where will it come from? The Franchise Council of Australia has taken the lead. Recognising the need for specific, industry-based vocational education and training, the FCA has developed its own Franchise Academy. This is a clear indication of how seriously leadership at the FCA is taking the issue of education for the sector. Franchising is one of Australia’s most dynamic business sectors. Growth in the past 10 years has been astonishing, as more and more Australian entrepreneurs have chosen the franchise route to grow their business ideas. Today, more than 1000 franchisors have developed business systems, each one unique to its brand. There are now more than 69,000 franchisees operating their own small businesses within the brand of their choice. And the sector attracts all sorts – from young budding hopefuls to mature age workers with money to spend; male, female, young and old. The franchising industry has accommodated people from all walks of life, with a range of business skills to match. While in the past it may have been accepted that system operations manual training was the only necessary education, it is now understood that the more successful
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franchisees usually have a greater understanding of broader principles – the principles of business management and of the franchising model.
Filling the gap The Franchise Academy is a response to the realisation that more needs to be done and more needs to be offered to franchise systems looking to lift their skills and their competitiveness. To help ensure it brings the best expertise available to address the need, the FCA has collaborated with existing sector experts such as Greg Nathan’s Franchise Relationships Institute. William Angliss Institute provides the necessary Registered Training Organisation status, as well as complementary course content in hospitality, food and beverage, business and other retail disciplines. To run the courses, the Franchise Academy has turned to the franchise-specific expertise of Business Essentials, whose team of facilitators offers comprehensive business management training including the Diploma in Franchising and Certificate IV in Small Business, targeted at franchisees. Cert IV in Small Business supplements what a franchise system already provides in terms of operational support and guidance, with sound, small business management practices that can be learned through competencybased vocational education. If you’re a franchisee without bookkeeping or staff management experience, Cert IV would be a valuable course for you to undertake.
Course outlines The courses with modules run over one
or two days each. The facilitators work with small groups of participants to ensure maximum effectiveness. The course content covers subjects that include establishing a franchise operation, management of an operation, site selection and territory planning. Also covered are people management and skills, budgets and workplace environment creation. The courses are run on a regular basis from state-of-the-art facilities at the William Angliss Institute in Melbourne and around the country, as the Institute extends its reach to major centres interstate. But that’s not all. Another important educational step for the Franchise Academy comes with the development of a Continuing Professional Development (CPD) program, currently being finalised, so that FCA members can access ongoing professional development. This will underpin the Franchise Academy’s strong commitment to lifting professional standards and achieving best practice within the sector.
Pathways to growth So much is changing now in the provision of vocational education and training in franchising. As the Franchise Council makes big strides into education, the government too is lending a hand, offering financial support to business leaders who commit to investing in vocational education and training. The horizons look good for smarter franchise businesses across the sector. Franchisors and their franchisees will all be winners as they access an expanding range of educational pathways to sound and sustainable business growth.
Franchise Academy FCA Franchise Academy a wholly owned subsidiary of Franchise Council of Australia
Professional answers to questions from our readers I want to get into my own business – where do I start? Good question! Make sure you have the support of your partner and family, as being in business is going to consume a lot of your time. It is important that they are behind you in this undertaking. Then start saving your money. You should have at least half the purchase price in cash. If you have this funding, you don’t have to borrow more than 50 per cent of the purchase price and that will take a lot of pressure off you.
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The next thing is to start thinking about what sort of business you are going to enjoy getting up every morning to go to. Then look at the skills you currently have. Can you use those skills in your own business? If you can, that’s one thing less to learn about, as there are plenty of new things to learn in running your own business. If you are going to be doing something completely different, see if you can go out and work for someone who is already in this business for at least two weeks so that you can make sure you like doing this work and enjoy it! Take annual leave from your job if you have to, even work for free if you must.
This will be the most valuable thing that you do and will help you enormously in making your decision. If you are looking at buying an existing business, I would recommend a two week trial shift with the current owner. That way, you can determine whether you like the work, you can confirm the weekly sales of the business, you see first-hand how the business runs and what is involved on a day to day basis, etc. There are also lots of web sites where you can research to find out more about the business you want to get into and the industry that it
“Franchising is about the synergy that develops from two people combining their entrepreneurial spirit to grow and develop their mutual business.” George Yammouni, CEO, Bathroom Werx Group.
operates in. It is very important you have a good idea of the big picture and how that can impact on the business you are looking at purchasing. It’s not that hard. You just have to make the decision and then make a start. The more research and preparation you do, the better chance you give yourself of success.
I want to buy a franchise business, but I am not sure. Do I have control and do I have a say in the business? Something very important that you should understand about franchising is that it is not about control. Franchising is about the synergy that develops from two people combining their entrepreneurial spirit to grow and develop their mutual business. The aim of this synergy is to create wealth for the both of them. This means that when you are running the business, you will have certain functions to perform to make sure that you are successful. Your franchisor has certain responsibilities as well, to ensure that the value of the brand, and therefore the business you are in, continually increases in value. If you look at franchising this way, you will soon realise that you are getting into business with a lot of people. They all have a stake in the business and they all want to be involved in decisions and outcomes that affect them. The way you run your franchise business has an impact on every other franchisee in the system and they on yours. You can start to see how important the franchisor’s role of keeping ‘everyone singing from the same hymn sheet’ becomes crucial to the success of the brand. So, back to your questions. Of course you have a say and control. You control the day
to day operations and the interaction of your customers with your employees and with the brand. The question you should always be asking yourself is, ‘How can I run things better so that my customer is the winner?’ These are the sort of answers that your franchisor is always searching for and this is where you have a big say in the business. The other side of this is that you are one part of a big team - your brand. This requires discipline from you, so you can play your part on that team. There is nothing to be unsure about in running a franchise business. The functions that determine the success of your business have been identified and systems are in place to help your carry them out. All you have to do is follow the SYSTEM. This is one of the most important factors in making franchising more successful than small business in general.
I’ve got a great idea for a new business - how do I go about protecting that idea from others copying it? The first thing to do is to make sure that you only discuss this idea with people you trust. And you are going to have to trust a few people, as you go about making sure that this idea is feasible. Your accountant is probably your first step, as it is important to do some financial modelling on your idea first, to make sure that it stacks up. In doing this modelling, you are going to have to make contact with various customers, suppliers and others already in the industry to get an idea of prices, demand, distribution, etc. Ask your lawyer to prepare a ‘Confidentiality Undertaking’. You can then ask people to sign this prior to any discussion you might have with them about your idea. Your accountant and your lawyer will also
discuss things like trademarks and patents to protect your ideas as well. These are expensive undertakings, so doing your modelling and research into the market potential first is a good idea. If you and your advisors determine that you have a good idea, get it out into the market as soon as you can and let the market be the ultimate judge of your idea. If the market loves it, it will reward you with plenty of sales. You can waste a lot of time and money protecting your ideas before they even get to the market, only to find that the market doesn’t like your ideas in the first place. So there is always a trade-off between getting to market first, getting protection and being feasible. It is not always easy to find the right balance. If your idea can be easily copied, then I would get it out to market first and get the edge over everyone else as being the ‘original’. If you have any questions you would like to ask about the franchising industry, please send them to email@example.com. au and we will ask George! George is CEO of the Bathroom Werx Group. George is one of Australia’s leading exponents of service franchising and is a Past Chairman of the Franchise Council of Australia. Having been a franchisee himself, he understands what it takes to build up a successful business. Bathroom Werx specialises in bathroom renovations and makeovers. They renovate over 100 bathrooms per week around Australia for customers, including the world’s leading Hotel groups. For more information contact George at: Email: george.yammouni@ bathroomwerx.com Web: www.bathroomwerx.com
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PROFILE : SPA N ISH DOUG H N U TS
WORLD FAMOUS CHURROS Spanish doughnuts with a twist
he mouth-watering taste of Spanish Doughnuts is one of the most unique food concepts to arrive in Australia over the past decade. Born from Spanish legend, where nomadic shepherds created a cake-like bread that could be cooked over an open fire, comes the delicious selection of sweet and savoury pan fried doughnuts. Originally similar to a bread stick, the mountain shepherds ate this staple plain or rolled in cinnamon sugar. The traditional
star shape has developed over time. This ensures the fluffy inside texture is cooked through and gives the outside its crispness. The fluted sticks of fried dough are usually sold in dozens or half-dozens and are tastiest cooked fresh. They remain popular breakfast, snack and desert fare right throughout Spain and are now available in Australia. Spanish Doughnuts franchise has perfected the Churro recipe and made the business model into a superb franchise opportunity. A quick, fresh choice for people on the run, Churros appeal to people of all ages. Expanding upon the simple plain and cinnamon sugar coated varieties, Spanish Doughnuts now offers Bonbon Churros, Hot Jam Churros, an assorted selection of chocolate Churros and for those who prefer a savoury flavour, cream cheese, sundried tomatoes, peanut butter or cheesybite vegemite filling! So there is something for everyone. Spanish doughnuts offer a unique business opportunity within the expanding indulgent food category. The supportive, hands on team helps franchisees every step of the way. They provide a low start-up cost coupled with
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a strong business model and minimum risk. With such a unique and authentic Spanish flavour, the Churros brand is hard to resist. The franchisor will help secure the best possible retail locations to ensure a strong flow of traffic past your establishment. The team at Spanish Doughnuts is dedicated to providing everything their franchisees need to make the business a sweet success. With a comprehensive training program and a strong support strategy, the franchise business model for Spanish Doughnuts will allow you to get your business up and running quickly and easily. As a franchisee of Spanish Doughnuts you will benefit from the easy, streamlined operation and the strong team culture. You, along with your fellow franchisees, will be able to enjoy a comfortable profit margin and a secure return on your investment. All this while providing hot, tasty Churros to your loyal customers. If you would like to become part of the team, contact Spanish Doughnuts at: Phone: 03 9654 5577 Email: firstname.lastname@example.org Web: www.spanishdoughnuts.com.au
Doughnut MISS OUT Spanish Doughnuts now Expanding
Franchises Now Available for sale in Melbourne. Flinders St Station, Elizabeth Street and Westfield Doncaster.
Call Michael Aldemir on 0403 329 145
PROFILE : FLOW ERS BY FRU I T
A PASSION FOR FUN
Fruitful Opportunities T
ania Katsanis always had a passion for food. For 11 years Tania worked tirelessly in the corporate marketing world. She was happiest when managing food brands. However, as often happens, Tania knew she was not following her true calling. As a marketing expert and no stranger to research, Tania started looking for other opportunities. She came across the ‘fruit bouquet’ concept – which was extremely successful in the USA – but practically unheard of in the Australian market. That seemed to be all Tania needed. A seed of an idea. She moved from Melbourne back to Sydney, her home town and proceeded to charge forward with her new company concept ‘Flowers by Fruit’.
The Flowers by Fruit concept Flowers by Fruit is passionate about fresh food, celebrations and sharing good times. They use only the best quality hand selected fruits and vegetables fresh from the markets, along with Belgian chocolate, to design and create amazing fruit arrangements and bouquets that are not only beautiful to look at but delicious to eat. At Flowers by Fruit, Tania and her team members are proud of being the best at what they do and love to make people happy. The company’s commitment is to ensure that customers not only receive a delicious edible fresh fruit arrangement that will be spectacular, but also that the customer service is second to none.
The next five years produced a whirlwind of activity. Tania managed to sell her house, find a husband and develop the business! She has been extremely proactive and thus extremely successful. In just the last three years, Flowers by Fruit has been the proud recipient of eleven small business awards – including Best Local Business in 2008 and 2010.
Community and environmental support
This aligns with Tania’s long term goals of being the Australian pioneer in this industry. From the humble beginnings as an on-line business, Tania is now ready for the next big phase of business growth – franchising. Tania has a strong business model, a fantastic product and a fun working environment.
Flowers by Fruit also reduces rubbish by recycling as much as possible. Their cardboard boxes and plastic containers are sent to their respective places for recycling.
“We are now looking for franchise partners to join us in our mission to delivering happiness to everyone all over Australia. We have two franchise models available, both suited to people who are of full of energy, vibrant and want to be the best at what they do,” says Tania.
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Flowers by Fruit is committed to giving back to the community. They have partnered with organisations including OZ Harvest and the RSPCA. OZ Harvest receives all the excess fruit to help feed the needy of Sydney. The RSPCA receives continuous support from Flowers by Fruit.
Plans for the future Tania plans to expand with two different business models. The first would be ‘Creation Centres’ where the products are created and delivered within the exclusive region. The next model would be run by EGG’s (Edible Gift Guru’s). These franchisees are responsible for local area marketing and servicing the clients
within the allocated territory. Both concepts offer excellent opportunities. Tania plans to recruit two EGG’s and open two new Creation Centres in the Sydney area in 2011-2012. Flowers by Fruit then plans to expand across New South Wales and eventually throughout Australia. Flowers by Fruit is looking for creative people who want to get on board with this exciting opportunity. This is your chance to get in on the ground floor of a business that can provide fun, flexibility and creativity. Imagine making money by making beautiful works of art that bring joy to people! For more information on becoming part of the Flowers by Fruit team, contact Tania at: Phone: 1300 767 325 Email: email@example.com Web: www.flowersbyfruit.com
An opportunity for you to Fra opp nchise ortu BWBJ nities MB AUS TRA CMF LIA WID
Join the leader in edible fresh fruit & chocolate fruit arrangements Flowers by Fruit NOW offering Creation Centre franchises t:PVSPXOFYDMVTJWF3FHJPOXIFSFZPVNBLFBOEEFMJWFS these delicious edible gifts t&YDFMMFOUUSBJOJOHBOEPOHPJOHTVQQPSU t)FMQCVJMEZPVSPXOMPDBMBSFBNBSLFUJOHUFBN t#FQBSUPGBNVMUJBXBSEXJOOJOHCVTJOFTT t#FJOWPMWFEJOBHSPXJOHNBSLFU
FOR MORE INFORMATION CONTACT
Tania Katsanis &franchising @flowersbyfruit.com 1 Or register your interest online at XXXÃ¸PXFSTCZGSVJUDPN Business Franchise Australia 113
PROFILE : len ar d’s
COMING OF AGE The evolution of the Lenard’s brand.
010 has proven to be a milestone year for nationally-recognised and loved chicken retailer Lenard’s, celebrating 200 stores in September. Since opening its first store in Queensland in 1987, Lenard’s has served more than 200 million customers to become Australia’s largest specialty chicken retailer, selling over 13 million chickens each year. Lenard’s has carved out its own market providing fresh, convenient, quality meal solutions every day. With a range of approximately 150 fresh and value added chicken products available, franchise owners select the products they sell based on their individual market and customer demand. Lenard’s remains a privately owned company with 200 franchised stores, employing more than 2,000 staff and achieving an annual turnover of $147.8m in the 2009/10 financial year. Len Poulter founded the Lenard’s concept after observing a gap in the market. In his butcher shop in the mid 1980s, he noted that at the time, 46 per cent of his sales were for value-added and chicken products. There was nothing like it on the Queensland retailing landscape. The uniqueness of the concept, underpinned by an obvious passion for freshness, quality, innovation and service, generated overwhelming customer support. On the back of this successful formula, the brand quickly grew throughout Australia. In 2001, Lenard’s launched a new chapter in its history with the opening of the first Lenard’s store-in-store concept in Australia, at Ritchies IGA Dromana. Lenard’s also recently formalised an alliance with grocery and liquor wholesaler Metcash Limited to expand this concept through the Supa IGA network. After 23 years of business growth and development, Lenard’s celebrated the opening of store number 200 in Darwin in September 2010. “The 200 store target is one that we have been looking forward to for a while now. And we are so pleased for Lenard’s Hibiscus in Darwin to draw the lucky number. The
114 Business Franchise Australia
franchise owners, Fernando and Melissa Lay, are experienced and fantastic business operators,” said Len. Lenard’s Hibiscus is the second Lenard’s store for Fernando and Melissa Lay, who have also operated the Lenard’s store in Nightcliff since 2006. Lenard’s Hibiscus represented a significant milestone for the national franchise and is a tribute to the success of Lenard’s in the highly competitive fresh food market, satisfying the needs of today’s timeconscious consumer. To capitalise on Lenard’s niche, the franchise business recently launched a multi-channel, quirky marketing campaign including a series of national television commercials as part of a brand ‘revolution’ to reflect the changing retail and customer landscape post the GFC. The campaign provides an easy answer to the perennial question asked by every Australian family – “What’s for dinner?” “Our mission was to dissect and evaluate our brand to ensure we are clearly projecting what Lenard’s stands for internally and externally and the ‘What’s for Dinner’ concept was really resonating with shoppers,” Len explained. “The retail landscape has changed and customers have changed as a result of social, economic and technology factors and we decided this would be the perfect time to give the Lenard’s brand a health check to
ensure we are meeting the needs of our customers and remain competitive in the new landscape.”
So, where to from here? Today, Lenard’s is considered to be one of Australia’s leading fresh food retailers and a pioneer in the kitchen-ready market. The next major challenge is to continue to develop nationally and to expand the franchise into lucrative overseas markets. Lenard’s will look at avenues that may better distribute the Lenard’s product and brand to a wider audience of consumers. “As far as the US, UK, Asia and Europe, there is a gap in the market for our type of offering and we are very interested in developing ourselves in some of these overseas markets,” Len said. Lenard’s is currently investigating entry into the overseas markets of Singapore and the United States of America. There are plans to expand into the retail markets of both countries with Singapore being the primary focus at this time. The franchise business is currently in discussions with retail contacts in Singapore with a view to having an agreement in place inside this calendar year. To find out more about franchising opportunities with Lenard’s call Amanda Fish at: Phone: 0434 600 470 Email: firstname.lastname@example.org Web: www.lenards.com.au
What’s so unique about a Lenard’s franchise opportunity? Our spectacular range of products sets us apart. Over 23 years we have proven that our offer can’t be matched... and Australia loves us for it.
Comprehensive and innovative training Serving a growing staple market A proven system for over 23 years We’re one of a kind Visit us at: www.lenards.com.au Sites now available Australia wide To ﬁnd out more contact Chris Booth on 0434 600 470 or at email@example.com
SPOTLIGHT ON SERVICES : FC busi n ess SO LU T I O NS
GROWTH CONTINUES AT
FC BUSINESS SOLUTIONS
C Business Solutions has kicked-off 2011 in striking fashion, adding a Business Manager - Recruitment & Selection, as well as a Public Relations consultant and Administration Officer to the growing team. Michael Sheedy has joined the team to headup Business Development and reignite the recruitment offering of the business with a never seen before model in the sector. Michael is a fantastic asset to FC Business Solutions, having extensive experience managing and growing businesses, both in Australia and abroad, as well as being an expert in the training and personal development sector. Alex Guidice joins the team as its new Administration Officer. Alex has been managing restaurants for the past 10 years, as well as running a business focussed on coaching restaurant team members. Former Business Franchise Editor, Louise Mitchell, has joined the team as a PR Consultant. As well as being a magazine editor, Louise has also been a newspaper editor and public relations specialist in a number of organisations. FC Business Solutions Director, Corina Vucic, said FC Business Solutions was focussed on capitalising on the achievements of the business in 2010. “Suffice to say that we have not taken our foot off the pedal since relaunching the brand in December last year,” Corina said. “It is important that we continue to add professionals to our team who share the same passion and who are driven by building and maintaining relationships within the sector and the business community.” Corina said that anyone who knew her and the team would be well aware that changes would continue at FC Business Solutions. “We’re not going to sit back and wait for trends to come to us – we want to set the trends. We want to be innovative and one step ahead all of the time. “Keep an eye on us and what we’re doing in the market place because if you blink an eye, you just might miss something,” Corina said.
116 Business Franchise Australia
FC Business Solutions has had a number of wins in 2011, introducing a number of new clients into the business.
• Fitfast – Business planning and mentoring
Providing such a unique, diverse and integrated service offering to the franchise sector has presented the business with many exciting opportunities across a range of exciting brands.
• MindAtlas – Public relations program
Collectively, the FC Business Solutions team offers in excess of 75 years’ experience and it appears that the franchise sector is taking notice. In 2011, FC Business Solutions has welcomed the following clients to its family: • Jim’s Roofing & Flooring – Marketing, advertising and public relations program • Amigo’s – Franchise growth plan and franchise information pack • Tasty Trucks – Franchise re-launch • MPR Group – Public relations campaign • Prestige Smile – Business planning and mentoring • National Solar Group – Franchise growth plan • DOC Group – Business planning and mentoring
FC Business Solutions GM PR-Marketing Andrew Kelly is working with Australian basketballer Abby Bishop (pictured) and Brisbane Lions Captain Jonathan Brown to assist in the re-launch of the Jim’s Roofing and Flooring Services division.
• Quest Apartments – Executive Recruitment & Franchisee Awards • Small Print – Local area marketing kit • Snap-on Tools – Executive recruitment • Integrated Recovery Services – Public relations campaign FC Business Solutions is a fully integrated consultancy firm, specialising in developing, growing and marketing franchise businesses. The business has built a reputation based on relationships and results, assisting businesses to reach their full potential. FC Business Solutions divisions include Business System Development, Expansion and Growth Solutions, PR, MarketingCommunications, People Development and Learning Solutions, Advisory Support and Executive Recruitment. For more information please contact Andrew Kelly at: Phone: 03 9533 0028 Mobile: 0488 333 191 Email: firstname.lastname@example.org Web: www.fcbusinesssolutions.com.au
RELATIONSHIPS & RESULTS
We are a fully integrated consultancy firm, specialising in developing, growing and marketing franchise businesses
Business System Development PR, Communications and Marketing People Development & Learning Advisory Support Executive Recruitment Expansion Growth Solutions
JOIN US www.fcbusinesssolutions.com.au FC Business Solutions Pty Ltd Suite 3 | Caulfield Corporate Centre | 875 Glenhuntly Rd, Caulfield, Vic 3168 P +613 9533 0028 | F +613 8640 0413
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THIS NEWLY DEVELOPED FRANCHISING OPPORTUNITY IS SEEKING INTEREST NOW! For all Media/Advertising/Franchise enquiries please contact Kate Allen, Franchise Manager â€œMan, What a Fussâ€? 17 McKillop Street Melbourne 3000, p: 07 5520 4166 m: 0417 007 560 e: email@example.com
fra nchise e x po 2011
Franchise & Business Opportunities
he informative Franchise & Business Expo series is back in 2011 bringing people who had both the passion and the means to invest in the franchising sector. The Expos (held in Sydney, Perth, Melbourne and Brisbane) continue to attract a diverse audience, with the unifying objective of hoping to become successful business owners. Visitors who are keen to buy a franchise can obtain professional legal and financial advice at the Franchising Advice Centre. A franchise banking specialist will be onsite to explain the process of securing finance, and specialist lawyers are available to help visitors understand their legal obligations and the terms and conditions
120 Business Franchise Australia
associated with signing contracts. For visitors new to the industry, the Expos will include the highly popular Franchising Boot Camp, designed to give a complete overview of franchising in a power-packed and practical session. The Franchising Boot Camp aims to provide essential knowledge to those visitors who are in the early stages of their franchising journey. This session will include an open discussion between the audience and a panel of franchisees, to provide visitors with relevant experiences and a practical perspective. As the largest and longest running exhibition series in the franchising industry, the Franchising & Business Opportunities
Expos are a valued addition to the annual industry calendar. This year promises to be another big year for exhibitors at the Expos, with new opportunities for visitor interaction and access to a highly motivated and investment ready audience. For more information or to obtain your free ticket, visit www.franchisingexpo.com.au
Melbourne 19-21 August 2011 Brisbane 10-11 September 2011
O R KIN
Itâ€™s the perfect place to begin your new business search or finalise your decision making process: t$PNQBSFPWFSGSBODIJTFBOECVTJOFTTPQQPSUVOJUJFT
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REGISTRATION IS NOW OPEN. Please visit franchisingexpo.com.au to pre-register for your FREE ticket.
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ONLINE MEDIA PARTNER
Jason Gehrke shares with us some hot topics in franchising. Jason Gehrke, Director Franchise Advisory Centre.
Behind the Headlines McDonaldâ€™s launches coffee apology campaign McDonaldâ€™s Australia has launched a unique advertising campaign apologising for the quality of its coffee, and has undertaken to improve by training more baristas and offering a money back guarantee. The campaign is the largest conducted by the national chain in the last two years and includes newspaper, radio, television and social media. Meanwhile, the companyâ€™s Mt Isa outlet has resorted to offering free flights and incentives for jobseekers 2000km away from Brisbane, to overcome a shortage of local workers due to competition for staff from the mining industry.
National business dispute resolution options launched An options paper that proposes four methods of providing a national business dispute resolution system, which would also conceivably include the resolution of franchise disputes, has been launched by Federal Business Minister, Nick Sherry. The four methods include: 1. A national information and referral service - to provide a phone hotline and website that refers to existing services. 2. A national dispute resolution service - that adds a mediation service to the option above, where no other low cost dispute resolution service exists. 3. A national small business tribunal - to investigate and conciliate disputes, backed
122 Business Franchise Australia
by Commonwealth legislation. The tribunal would be both a national network and a one-stop shop for small businesses in dispute. It could be based in a capital city and potentially use existing federal court infrastructure. 4. A small business advocate - that would offer independent representation of small business interests and concerns within the Australian Government. Comments and submissions on the options paper are due by June 30. Details are available at http://www. innovation.gov.au/SMALLBUSINESS/ DISPUTERESOLUTION/Pages/default.aspx.
Sydney Harbour ferries to be franchised While South Australia and Western Australian consider proposals to introduce state laws for franchising, the New South Wales government is embracing the concept by announcing that it will franchise the iconic Sydney Harbour ferry service. Under the franchise, the NSW government would continue to own the ferries and retain control of the routes and fares, but will subsidise unprofitable route. The government is looking to a franchised operator to deliver an improved and more efficient service.
Pie Face seeks $10 million capital ahead of $100 million IPO Sydney-based food franchise, Pie Face, has announced it is looking to raise $10 million from sophisticated investors ahead of a
possible $100 million or greater initial public offering next year, according to a media report. The chain currently has 37 franchised and 12 company-owned stores, primarily in Sydney and Melbourne, where some outlets also trade 24 hours a day. The company claims a current market valuation of $45 million. Co-founder, Wayne Homschek, a former investment banker, is aiming to increase the valuation to $100 million plus before proceeding with the IPO, and expects that the company can open another 10-20 stores beforehand. Homschek founded the business with wife, Betty Fong, in 2003 and owns approximately 20 per cent of the business. Current investors include Trevor Rowe, the Chairman of Queensland infrastructure business, BrisConnections. Jason Gehrke is the director of the Franchise Advisory Centre. He is an MBAqualified franchise advisor, conference speaker, business mentor, university lecturer and member of the Franchise Council of Australia. The Franchise Advisory Centre provides advice, education and training to new and established franchisees and franchisors to help improve business outcomes. For regular news updates on current franchise trends and issues direct to your inbox, sign-up online at www.franchiseadvice.com.au or email firstname.lastname@example.org
PROFESSIONAL SERVICES LISTINGS
Wisewould Mahony Lawyers
419-425 Collins Street, Melbourne VIC 3000
4 Graeme Ave, Montmorency Vic 3094
P 03 9629 8333 F 03 9629 4035 Contact Robert Toth
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E email@example.com Lawyers in love….with Franchising www.wisewouldmahony.com.au
E firstname.lastname@example.org www.billingslong.com.au
25 Years of Specialised Franchise Industry Knowledge Member Franchise Council of Australia (FCA), International Franchise Lawyers Association (IFLA), Franchise Association of New Zealand (FANZ) & US Commercial Service.
The Billings Long shop fitting operation specialises in retail food. This means that we understand food brands and how to care for your brand.It also means that Billings Long is fluent in all aspects of the retail food franchise process. We are experts in securing permits and understand complex retail food regulations.
FIXED COST FEES to Franchisors & Franchisees based on scope of works. No hourly rate surprises! Services Provided
It is this knowledge, combined with exceptional attention to detail and successful deliveries that has positioned Billings Long as a leader in the industry. Our extensive experience in shop fitting for retail food brands across every state in Australia is why we’re so comfortable saying that we are the experts.
• Legal and consulting advice to Franchisors & Franchisees • Code compliance requirements • Dispute resolution – mediation – strategies & solutions • Sale/Purchase of Franchise Systems
Billings Long is a genuine one-stop shop fitting solution, with a workshop producing signage, joinery and cabinetry and a network of qualified tradesmen to deliver quality fit outs against critical deadlines.
• Employment Law and Workplace Relations Specialists • Master Franchising
This means Billings Long has 100% control over quality and 100% control over your project to ensure your grand opening happens on the day you planned.
• International Franchising • Business Law Specialists
Billings Long. Building Excellence. Every single time.
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Published on Jul 8, 2011
Business Franchise is a bi-monthly consumer and trade publication bringing you all the latest news, expert advice, and information from the...