Nov/Dec 2019 Business Franchisor

Australia & new zealand

Franchisor B u s i n e s s

VOL 07 ISSUE 03, 2019

what will franchise finance look like in 2020? curating and building

A successful franchise model why lawyers are the last Business Franchise Australia and New Zealand 25

NEWSitems MOTTO MOTTO JAPANESE KITCHEN APPOINTS HUXTABURGER’S MATT FICKLING AS HEAD OF FRANCHISING recognised franchisor. Fickling transformed Huxtaburger’s business, led their franchise strategy, built an executive team and pioneered network growth across Australia. Just last year he penned a 10-store franchise expansion deal for the burger business with NSW investment group, Yesdac.

Motto Motto Founder and Managing Director William Liu said, “We are very pleased to have attracted someone of Matt’s experience and capability. He brings significant franchise and strategy experience coupled with his ability to contribute to our brand & marketing, supply chain & operations teams because of his multi-disciplined background as a successful chief executive.

As an entrepreneurial and dynamic thinker Matt will be a powerful addition to an already high performing executive team.”

Fickling said, “The opportunity to bring my executive experience and join an innovative and talented team at Motto Motto was too good to refuse. Motto Former Huxtaburger CEO Matt Fickling has been appointed Head of Franchising at Brisbane based premium casual restaurant brand Motto Motto Japanese Kitchen as they announce their move to franchise the brand.

Motto is joining a franchise market where we can solve some of the issues

Fickling joins Motto Motto after spending three and a half years with the

company operated brand, transforming the company’s supply chain and

Melbourne based fast food chain. He joined Huxtaburger back in 2015 and

supporting brand and marketing initiatives.

as CEO grew it from a small founder led business to become a nationally

www.mottomotto.com.au

the sector is faced with through a compelling offer built on transparency, differentiation & unparalleled support.”

Fickling is charged with the responsibility for the franchise strategy for the

Yia Sou! Say Hello to a new franchise in Queensland!

The Yiros Shop, a fun and popular Greek restaurant and takeaway, has exciting plans to develop its franchise network in locations across Queensland, Australia.

The Yiros Shop is home to Brisbane’s most iconic and authentic Greek eats. Founded in January 2015 came the first location in the notable James Street, Fortitude Valley, Queensland. The family-owned business set out to bring traditional Greek Yiros and other tasty Greek delights to its neighbouring areas.

To date, there are five successful restaurants established around Brisbane and Nicholas decided that there has never been a better time to start franchising. The colourful brand also has two new stores in Albion and Aspley opening early next year!

Nicholas Mitrossilis is really keen to get the ball rolling, he said, “The Yiros Shop is a 50/50 restaurant and takeaway and we have five existing stores all of which are doing really well. It’s fantastic to see how popular our fresh Greek food is among locals and visitors and with this, we have built a

James Young, Head of Franchise Sales and Development at DC Strategy believes the brand is in a perfect position to expand. He said “The Yiros Shop stores are going from strength to strength and it is the perfect time to start developing a successful franchise network. We’ll also look to grow

huge following of loyal customers who keep coming back for more. I think

the franchise business along the eastern seaboard once we have the right

customers love our fun, chilled out atmosphere, not to mention the delicious

partners in place.”

and authentic mouth-watering Greek menu!”

www.theyirosshop.com.au

26 Business Franchisor

Thermawood’s new partnership set for double success!

The Coffee Club breaks into 10th international market The Coffee Club has added a new store and new market to its growing portfolio, with the opening of its Vietnam establishment earlier this month.

The Coffee Club in Vietnam will cater to locals and travellers, offering a relaxed atmosphere where workers, students, tourists and families can all enjoy time away from the hustle and bustle of Ho Chi Minh.

Nick Bryden, Minor DKL Food Group CEO said the restaurant-style format provides an all-day dining experience with a menu balancing famous The Coffee Club favourites and local Asian dishes.

“The Coffee Club offers a distinctive restaurant experience with great selections of food and beverage menus, excellent coffee and a welcoming relaxed atmosphere enriching the contemporary lifestyles of Vietnamese consumers,” said Nick.

“Our menu in Vietnam is unique to this country. Customers will enjoy a mix of our international signature drinks and dishes with locally inspired favourites.

Ms Julianne Cowley of the Australian Consulate General who officiated the opening ceremony said that The Coffee Club is already a familiar brand with many Vietnamese people who have travelled to Australia and is set to become a household name as more people experience the hospitality.

Thermawood, the leader in the double glazing and retro-fit window industry has partnered with franchise experts DC Strategy to grow their network in Australia.

Known for their double glazing installations with timber frames, Thermawood specialises in retrofitting existing timber joinery. All of their products are unique and exclusive to the Thermawood brand - no other company has the same patented designs or products. This forms part of the key benefits of franchising with the global brand, which gives franchisees the opportunity to be part of the exclusive brand.

Graeme Clarke, Franchisor and Director of Thermawood said, “I have full confidence in the systems and processes we have developed at Thermawood for the both the Australian and New Zealand markets.

“We know what works when it comes to attracting customers and we have tailored marketing campaigns per area and territory.

Now with over 50 franchise locations operating in Australia and New Zealand, Thermawood is ready to hit the ground running and has partnered with DC Strategy to find new franchisees for the existing territories (Victoria, New South Wales and South Australia). In addition, master opportunities are available in new regions including Queensland, Western Australia and Tasmania. Their new ‘double’ expansion strategy planned for key parts of Australia will solidify their franchise network and give more people the opportunity to join their franchise team and be part of the double success.

“The launch of The Coffee Club is a practical example of how we want to link our nations. The Coffee Club will not only create local jobs; but builds on so many other links between our countries,” she said.

Jacki Cook, Thermawood master franchisee for Victoria said, “When we were offered the Mmaster franchisee for Victoria we jumped at the chance as we knew what a great opportunity it was to get into a unique business like Thermawood and the prospect of building a team of Franchisees really appealed to us and we have had no regrets, it has been a great experience so far and we are building a very successful team.”

www.coffeeclub.com.au

www.thermawood.com.au

Business Franchisor 27

expert advice: brian keen

When franchising a business, you can’t work out the myriad of different items to be carefully described in any meaningful franchise agreement, unless you know how a franchise group is going to work.

Even with the best will in the world, lawyers are not in the best position to understand the people side of a franchise group and the businessspecific technical issues which will determine how the franchise structure will work.

Yes, good franchise lawyers will have a precedent they use to structure a franchise agreement. And good franchise lawyers will have the experience to know most of the questions to ask to fill in much of the detail. But a good franchise lawyer also knows every franchise group is different and, to give their clients the protection they will need when things go wrong, they will be looking for instruction on how the group is going to function.

Building a franchise structure from a single business or concept is not quite as simple as it first appears.

A franchise group is, at heart, a people business.

You are creating at least two new businesses from the one you now own – one to service your clients who will be run by your franchisees and one to look after the franchise group and your

28 Business Franchisor

franchisee business partners, your franchisor business.

The key to creating a good franchise group is to work out your people-based franchise structure first and then, once you understand the nuances, you give the information to the lawyers to put into the best legal structure for the protection of both your franchise partners and you, as a franchisor.

As it’s rubbish in, rubbish out, don’t treat this lightly because any oversight or error in your legal requirements could well lead to expensive mistakes, litigation, heavy fines or even business failure. And believe me, it happens. That is why a franchisee-savvy lawyer will want to come last.

There are seven critical areas you must address first so your lawyer can give you a legal agreement which is relevant to your group:

1

Your franchise structure

What exactly are your franchise partners going to do? Deliver therapeutic massage to your elderly clients? Sell houses and manage the real estate agency that goes along with that task? Do your clients’ bookkeeping?

What are the other tasks which go along with each of those broad areas? What marketing will be needed? Where will the leads come in too?

How is the money coming into the group going to be managed?

The list is long. More importantly, so is the list of people characteristics and skills needed to

get the jobs done. Inevitably, most franchise groups will find the people most suited to getting the fundamental job done (massage, sales, bookkeeping) will not have the ability to manage all aspects of their business. None of us is good at everything. So, a reference to multiple experts is essential if you’re to start franchising off on the right foot.

Marketing, sourcing leads and managing basic business administration are often areas in which most franchisees need help.

If you want your group to work – you, as a franchisor, are inevitably going to have to take on these tasks. It takes a little working out, and your lawyer is probably not the best person to help with this fundamental first step.

2

The money

Your lawyer is not an accountant.

So many new franchisors expect their lawyer to tell them what their initial franchise fee and ongoing levies should be. These are not fair questions at all!

Sure, you can dig up some averages for different industry sectors, but they mean nothing at all to your business. Because every business has different ways of doing things, different cost structures, different advertising budgets, add to that the cost of the list of tasks you have discovered you will need to take on to help your franchisees become successful in business.

It’s not just your initial franchise fee and the ongoing royalties. You need to determine accurate costs for providing initial training, for the marketing fund, service fee, transfer and renewal fees.

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

The list is also long, and without help from a franchise savvy accountant and franchise consultant with business experience, you’ll likely miss a lot of critical information.

3

Territories and strategic network planning

Territories are not as simple as postcodes, or population or a handful of other key denominators. It’s a science, and it’s a highly sophisticated exercise with very skilful analysis of specific data information around your franchise outlets.

You might not need to specify a physical territory at all, but rules around whichever way the work is distributed will go into the agreement – and then don’t imagine you can tinker with them afterwards because you’ll find it very difficult to do so.

If you do have physical territories, the impact of initial network planning can be worth millions to you. Territories which are too small, mean franchisees will likely not grow a sustainable business. If they’re too big, you’ll likely not be able to meet customer demand so the business will leave a significant amount of income, profit and value on the table — a wasted opportunity.

A good lawyer respects your researching this area before you brief them.

4

Services and goods

hamstring you from having this flexibility. A very costly omission

5

Promotion and lead generation

Generating leads is critical to any business, and your current successful method may get turned

Then there are all the smaller but less important items to consider: Insurances What types and amount of cover are to be specified? Where is it to be obtained?

on its head when you appoint franchisees.

Managing the business

Just think about who you will be recruiting as

You probably do not want an untrained or unqualified person running your franchisee’s business in their absence, or indeed permanently if they decide they want to step back and play investor. How is this to be addressed in the agreement?

franchisees and what’s reasonable to expect their skillsets to be.

As a substantial single business, you may have a sales team made up of people who love what they do. Or your phone may suffice for taking sales calls right now. But you know your business

Confidentiality

backwards and can handle most questions on

The last thing you need is for someone to copy your business and set up in competition. There are many ways this can happen, so closely protecting your Intellectual Property (IP) is a must.

Trademarks and a carefully considered corporate structure need the attention of accountants and lawyers skilled in the franchise space and something done sooner than later in your franchise program.

the fly.

If you are expecting your franchisees to do their selling, you might be setting them up for failure. Sales are probably the most intimidating, most stressful and scary thing for most people, and your bookkeeping or massage therapist franchisees will find this role impossible to do over the long haul. In this digital age, your website is probably the best lead magnet you have so you

Defining the service you offer may be simple enough, but what about the other needs of your client profile. Jim started with weeding, then lawnmowing, and only years later did he move into the first of his now 40 or so mobile service businesses. He may have struggled to do this if he’d not wisely made adequate provision at the outset.

will be receiving most of the first calls.

Many franchisors have their product or are dependent on an outside supplier. Working out the balance can be tricky. Many begin with an outside supplier, then move to white-labelling a product before, in time, manufacturing their own. They often end up making more profit from their product than from the rest of the franchise operation, resulting in a large increase in the value of their business asset.

resolved first.

You need someone to walk you through this discovery process so you can make provision for this kind of evolution in your business. Miss this point and your franchise agreement could

7

Sundries

6

Premises There are many things to consider if your

franchisees need to operate out of a building, many of them way outside the gambit of your lawyer. There are significant practical and commercial considerations to be explored and If yours is a brick and mortar outlet, do you buy or own the premises, do you lease it, or does your franchisee? Do you fit it out or does the franchisee? Who is responsible for signage?

If it’s a mobile or work from home business model, then vehicles come in to play. Do you provide the vehicle, is it a lease package, what models do they have to be, are they to be branded?

Are there specialist tools and fit-out? Who does this work, and who pays for it? All question to be answered before you consider the legal process.

Conclusion There are many things to consider, and this article touches the tip of the iceberg. It’s unrealistic to place the burden of providing this advice on your franchise lawyer. Which is why it takes a careful and conscientious new franchisor three to 12 months to work through a properly detailed franchisor program with a specialist who can help you step your way around these many often overlapping and confusing obstacles.

Once you have an idea of how your group is going to run, you do need the services of a good, specialised, franchise savvy lawyer who can help to frame up the best franchise agreement to suit your business today and give you the flexibility to adapt, long into the future. The best will want you to have ticked the other boxes first.

For more information Brian can be contacted at Franchise Simply on 1300 960 136 or go to www.franchisesimply.com.au

Business Franchisor 29

profile: wollermann franchise developments

The Power of Empathy with Intelligence Good business practice defines management as the art of ‘getting things done through other people’. and packages its proven operating systems, together with its brand profile, into a business system. This they make available to other people (who buy their franchise) who then simply follow the procedures and systems to maximise their chances of success.

Colin Crawford

This is absolutely true in well-run, complex organisations. But it is equally true in the most simple of business relationships – that of a franchisor and its franchisees.

The essence of franchise management is that the franchisor (or parent organisation) refines

It works in theory, and it works in practice. But not everyone ‘gets’ it. Some franchisors think that they are in a relationship with their franchisees whereby they can dictate and manipulate the lives and the well-being of their contracted business partners (their franchisees) to their own self-centred ends. The result is almost always a disaster – and usually ends in penalties from the regulator, possible litigation, followed by brand damage and franchisee dissatisfaction.

A smart, intelligent franchisor, on the other hand, recognises the synergistic power of the win-win in good franchise management and sets out to fully support their franchisees.

It’s an attitude thing! A desire on the part of a franchisor to genuinely help others build something for themselves. Smart franchisors understand that there is no greater motivation in a franchisee than seeing real, tangible rewards by working hard to build a business and a life, that

30 Business Franchise Australia and New Zealand

they can control and be proud of.

Disempowering a franchisee by a franchisor will create a compounding negative synergy.

However, a practical helping hand, together with a sincere desire to work collaboratively with a franchisee, will generate the multiplier effect that franchising is renowned for.

Think about it the next time you hear or read negative media stories about how badly some franchisors have treated their franchisees. They do themselves no favours. Poor franchisors are the opposite of good managers and, at the end of the day, they are only harming their business, themselves and their franchisees.

Franchising has a 50-plus year history of building personal and business prosperity by recognising the duality of company systems being utilised by local-area owner-operators. This model is continuing to grow and evolve. It still can, and will, create prosperity for those who understand its power. Implementing it properly benefits all stakeholders – franchisor, franchisees, employees, customers and the whole broader society.

For more information go to: www.franchisedevelopments.com.au

WFD What are the key principles in successful franchising?

Better Franchisee recruitment, then empowering them with better strategies, better systems, better buying and better marketing.

Putting it all together is our responsibility!

With 25 years in the franchise industry we know how to grow a business locally, nationally and internationally, while building on the key factors that make your business successful.

Looking to grow your business?.

Contact Colin Crawford, National Franchise Manager.

WFD Wollermann Franchise Developments on FREE CALL 1300 249 276 or visit our website.

www.franchisedevelopments.com.au Melbourne | Sydney | Gold Coast | Adelaide | Hobart | Perth Business Franchise Australia and New Zealand 31

expert advice: James Scurr

What Will Franchise Finance Look Like in 2020?

After Australia’s lending landscape undertook significant changes throughout 2018/19, many franchisees and franchisors are thinking about what their finance options will look like in 2020.

The aftermath of the banking royal commission left many business owners struggling to access funds, as the banks tightened their lending conditions in an effort to be more risk-averse.

However, during this period the need for finance did not cease, and many within the industry began looking elsewhere for funds. As a result,

James Scurr has extensive franchising and small business experience, spending almost a decade as a successful multi-unit franchisee for companies including Boost Juice, Dreamy Donuts and other independently owned businesses. He is an internationally recognised Certified Franchise Executive (CFE) and a FRANdata Registered Franchise Lending Specialist. James founded Cashflow It in 2014 which now operates as Franchise Finance Australia.

we began to see heavy adoption of alternative providers in tandem with a shift in what consumers value. After a culture of dishonesty and misleading terms was exposed among traditional lenders, consumers moved their priorities to lenders which displayed transparency and honesty.

The rise of relationship-based lending In the past consumers displayed an undying brand loyalty to their banks. Once they opened their first bank account, people often didn’t look elsewhere when it came to their home loan, personal loans and even business loans. While relationshipbased lending is the philosophy that drove this loyalty, as Australia’s big banks grew in scale, the concept was somewhat left behind.

In 2018 Martin North, Director of Digital Finance Analytics, said ‘Irresponsible lending is endemic in Australia’. This was followed by an ASIC crackdown on non-compliant lenders, who were not meeting responsible lending requirements.

The perception that financiers were trying to maximise their revenue, even if that meant making reckless lending decisions, was widespread among the public.

After 12 months of tightened lending conditions and uncertainty surrounding the credibility of the country’s most prominent financiers, consumers are analysing the relationship they have with their finance providers more than ever. However, the

32 Business Franchisor

As well as alternative lenders, other innovative solutions such as crowdsourcing, peer to peer lending and microloans have become more mainstream.”

After a culture of dishonesty and misleading terms was exposed among traditional lenders, consumers moved their priorities to lenders which displayed transparency and honesty.

one thing that has changed is people’s approach to brand loyalty. Consumers have access to more information than ever before, and because of this, they realise that a company which is a good fit for their personal banking, might not be right for their business affairs. Franchisees do not necessarily want to lump their personal finances with their business finance. As a result, many are looking to build independent relationships with lenders who fit the needs of their business.

Alternative finance becomes the norm In 2017 Equifax reported a 68% growth in commercial demand for alternative lenders, and the highest adoption rates were among SMEs who accounted for 98% of all alternative finance enquiries. This trend has continued, with the

popularity of innovative and out of the box finance sources rising.

Even though alternative lenders have been around for quite some time, there has been a steep increase in adoption over the past five years.

As borrowers begin to see such providers as a realistic options, the feedback to their offerings has been overwhelmingly positive. In 2018 Medici reported an approval rating of 55-60 per cent for alternative providers, compared to just 23-27 per cent for banks. Finance is not a one size fits all solution, and while banks excel in meeting the needs of big business, this data suggests that Australia’s vast small to medium enterprise (SME) network is finding the support they need from non-traditional options.

As well as alternative lenders, other innovative solutions such as crowdsourcing, peer to peer

lending and microloans have become more mainstream. Recent data found that the playing field between banks and alternative lenders has levelled, citing an 18 per cent increase in the number of SMEs choosing alternative providers as their first choice.

Ultimately it appears that small business owners, franchisees included, are leading a new direction for Australia’s lending landscape. We are experiencing a shift away from a centralised model, with the big four banks at its core, to a more diversified selection of lenders.

The new challenge A recent SME Growth Index shows that more of Australia’s SMEs are positioned for growth than the country has seen since 2016, with a 51 per cent forecasting revenue growth over the next six

Business Franchisor 33

months. However, this same report suggests that these strong growth targets cannot be achieved due to barriers to finance.

Australia’s volatile property market is making it difficult for many small business owners to access the funds they need to meet their aspirations. Despite the fact that almost 60 per cent of small business owners are seeking access to funds, the timing of tumultuous market conditions has meant that many are feeling uneasy about their ability to do so. A decline in property prices means that applicants have less equity to source when trying to secure finance, driving demand for unsecured finance options.

The franchise industry now faces a new challenge, sourcing funding options to support the growth of its networks that also meet the unique needs of their franchise partners. Alternative finance options are set to play a significant role in overcoming this challenge. While it’s acknowledged that such providers are unable to match the low-interest rates of the bank, in the current lending landscape, this is not applicants main concern. Instead, an outstanding 91 per cent of those surveyed in the SME Growth Index stated they would be willing to compromise on a rate to avoid risking their home as security. A further, 61 per cent said they would ‘definitely’ make the trade-off, which is double the number of recent years.

This research shows that the option of property-

Borrowers are placing a high value on characteristics such as flexibility, transparency and unique funding solutions.

Traditional banks continue to play a vital role in Australia’s lending economy, but alternative finance providers are solidifying their place in the market. based security is deeply unfavourable for small business owners, meaning we will likely see a decline in the number of SMEs who are choosing the property backed funding favoured by banks.

Already asset-based security options offered by non-traditional lenders are beginning to bridge this gap.

These statistics reflect how the industry is adapting under the pressure of changing market conditions. Nevertheless, as the needs and wants of consumers evolve, new and innovative offerings continue to become available.

Australia’s franchise networks are determined to capitalise on the strong growth projections for the sector and will continue to explore the wealth of new funding options available to them.

This is just a snapshot of what we can expect in the world of franchise finance throughout 2020. Borrowers are placing a high value on characteristics such as flexibility, transparency and unique funding solutions. Traditional banks continue to play a vital role in Australia’s lending economy, but alternative finance providers are

solidifying their place in the market. Overall, Australia’s small business network is geared for significant growth, and if current challenges in accessing funds can be overcome, this growth will be realised.

Seeing a gap in the market, James founded Cashflow It Group in February 2014. Spending almost a decade as a successful multi-unit franchisee, it is his experience as a franchisee that ensures Cashflow It Group meets its customers needs better than any other equipment finance company in Australia.

Franchise Finance Australia is a specialist funder to the franchise sector, with unrivalled knowledge of franchisees funding requirements. Founded by directors with a background in franchising, we have remained committed to offering flexible funding solutions that allow franchisees to grow their business. www.franchisefinanceaustralia.com.au

34 Business Franchise Australia and New Zealand

2019

law fit for business At Macpherson Kelley we’re trusted business advisors as much as lawyers, with expertise in all areas of franchising.

We help manage and grow your business locally, nationally and internationally with strategic and insightful advice.

We work on the full spectrum of franchising matters: · · · · · · ·

establishing franchise systems and how they work drafting and reviewing agreements acting on mergers and acquisitions brand and intellectual property management and enforcement dispute resolution and litigation all commercial issues

Our clients know we’re with them every step of the way.

1800 888 966 info@mk.com.au mk.com.au

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22/10/19 12:33 pm

expert advice: John O’Brien

Curating and Building

a Successful Franchise Model These days, if you’re not changing, you’re going backwards. It used to be that the first step in creating a successful franchise model was identifying and proving a novel idea with a vivid brand suited to smallbusiness replication.

John O’Brien founded Poolwerx – his 5th successful franchised network, 27 years ago and has grown it into a global, multi-award-winning system. John is an inductee into the FCA Hall of Fame, past Chair of the World, Asia Pacific and Australian Franchise Councils and is a founding member of the Australian Federal Government’s (ACCC) franchise advisory group.

So it took me four attempts to get to Poolwerx,

However, that is no longer viable in today’s market. Instead, you need a system which is capable of rapid evolution. So if your system is showing signs of stalling, if you’re not getting the growth you hoped for, it might be time to look harder at what’s going on around you, your relevance in the mix, and at what market or regulatory changes you need to prepare for.

and while each one was successfully passed

I developed four franchise systems before Poolwerx, and the more I learned, the more I understood that the greatest strength of franchising is bringing organisation to chaotic and fragmented industries, which is why I chose the pool and spa aftermarket as my own end game.

During an extensive international tour, I saw that throughout the world, this industry was primarily populated by stand-alone owner-operators with little idea about collective buying, marketing, retail systems, training, emerging technology and brand. These were family businesses, but children were disinterested in taking over the reins from their parents despite this being a multi-billion dollar sector with a captive audience. Good times or hard times, once you have a pool, you can’t ignore it.

your action. You might have to consider a reboot,

36 Business Franchisor

If you’re not growing, ask yourself if there’s a way to blow the dust off your system and bring better organisation to the industry you’re in.”

on, each time it was ‘start again’. These days I don’t think that has to be. If you’re not growing, ask yourself if there’s a way to blow the dust off your system and bring better organisation to the industry you’re in. As Franchisor, your network is depending on you and your team to out-think, outpace and outflank everyone wanting a piece of but that doesn’t have to be seen as a negative.

The first Poolwerx model was vans servicing domestic pools. These days, individual franchise partners control multiple store empires supported by fleets of mobile service units for domestic, institutional and commercial markets. The model has now grown to support operations in Australia, New Zealand, the USA and soon in Europe.

Based on my own experience, these are the rules in which I follow to manage Poolwerx:

1

You must create a culture of respect

Whatever your altruism, franchise systems tend to go through a phase of ‘them-and-us’ in terms

of relationships between the support team and franchisees - and for that matter, suppliers. Some never get past it. Some do, and then back peddle back into it. In Poolwerx, there is zero-tolerance of disrespect for franchise partners, suppliers and our support team.

2

Never stint on training

Poolwerx has sophisticated training facilities in Brisbane and Dallas, Texas, providing industry and government-accredited modules for franchise partners and their staff. These are now recognised as best in the world for our sector.

The net result has increased the profitability of individual businesses, improved staff retention and a greater sense of future. In Australia, it is

the largest school in the Southern Hemisphere.

We were recently awarded a five-star rating under the independent FRANdata system. I believe this is reflected by the support and training Poolwerx offers employees, which is essential for any franchisee. We encourage anyone in our network to embrace training and complete their CFE Industry Certification - the highest qualification in the franchise industry.

As of this year, Poolwerx currently has the most (seven) accredited CFE graduates in Australia.

3

Your most important KPI must be the profitability of the individual businesses in your network

If your franchisees are making a living comparable with their effort and risk and can see a viable end game, then generally your system remains stable. It’s when people feel backed into a corner financially, or corners are cut, then this is when issues will arise.

Also, while it has taken a lot of money and forbearance to get there, we spend almost nothing on litigation. So as you develop your system, you need to know in real-time where each franchisee’s profitability is sitting against your benchmarks and take remedial action in

If your franchisees are making a living comparable with their effort and risk and can see a viable end game, then generally your system remains stable. It’s when people feel backed into a corner financially, or corners are cut, then this is when issues will arise. cases where fractures begin to show. Most often a process of ‘intensive care’ works.

4

Open as many lines of communication as you can

Create a sense of community within your network. Lead by example, providing regular internal communications and ensure two-way feedback through business meetings. Measure who is opening what network communication and how often they do so. If it’s flagging, find a new and better way.

5

Stay as true as you can be to the person you were when you embarked on your enterprise

Remain at the helm for as long as you can, and invest in culture as much as the balance sheet.

Last month Poolwerx was one of the first franchisee systems in Australia to be awarded a 5-star FRANdata rating for high performance. Here he talks about how to curate and build a successful franchise model and why it’s essential never to give up.

Poolwerx is the world’s largest pool service brand in the industry. Founded by Australian CEO and entrepreneur John O’Brien in 1992, Poolwerx has grown to be the only global pool brand with over 575 service vehicles and 160-plus stores in Australia, New Zealand and the United States. With significant investment in a professional development strategy, recurring revenue streams and a technology-driven and scalable model, Poolwerx swims ahead of its competitors. Poolwerx is also a champion of promoting the importance of teaching life-saving water skills through its annual community initiatives, Learn2Swim Week and April Pools Day.

Business Franchisor 37

When Australia dreams, we all win!

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Each year Australia’s Official Lotteries make dreams come true. With the help of our retailers, Australia’s Official government-regulated Lotteries play an important role in helping to support Australian communities with over $1.1 billion^ available for hospitals, schools and sporting groups. ^ State Lottery Taxes FY18 Australia-Wide (ex.WA).

We are Australia’s largest franchise network with almost 4,000 franchisees, operating across all of Australia, except for WA.

*The Lott represents Australia’s Official Lotteries which are sold by licensed entities: Tattersall’s Sweeps Pty Ltd, Tatts NT Lotteries Pty Ltd, New South Wales Lotteries Corporation Pty Ltd, Golden Casket Lotteries Corporation Ltd, and Tatts Lotteries SA Pty Ltd.

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