Business Franchise March/\April 18 Feature: Franchises in your Price Range

VOL 12 ISSUE 03 march/april 2018

THE PRICE IS RIGHT! Franchises you can afford

planning for

SUccess

10 questions

to ask before buying a franchised business

tips and traps

when buying a franchise Business Franchise Australia and New Zealand 35

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franchises in your price range Over the many years that Business Franchise magazine has been involved in franchising in Australia and New Zealand, we have dealt with hundreds of different franchise systems on a regular basis.

From the newest up-and-coming ‘must-have’ to the ‘old-timers’ established and successful over many years, franchising has never been so diverse. So, where do you start?

One of the questions that we get asked all the time by people researching the purchase of a franchise is, “Which one would you buy?” but surely the first question the potential franchisee should be asking is of themselves and should be “Which one can I afford?”

If you are lucky enough to know the industry you wish to join, the answer to this will help you decide which franchise systems to approach. If you have no idea of the industry type you wish to buy into, this is a helpful exercise as it will help to narrow down the wide range of 1600+ franchise systems available in Australia and New Zealand.

So what is your price range?

Following are some current franchise systems available, all categorised by price bracket to give you some helpful information on where to start. For additional information and contact details refer to pages 92 and 93.

Up to $50,000 BOOKS AND GIFTS DIRECT Books and Gifts Direct is Australia’s largest direct seller of books and gifts.

We sell our products from lunchrooms and reception desks in more than 25,000 workplaces around Australia. Workplaces include schools, childcare centres, businesses, hospitals, community centres and other corporate entities.

Our ultimate aim is to enhance the environments of our customers through our high quality products and excellent aftersales service.

Over the last 23 years we have developed a secure and proven franchising business model. Each Ecomist franchise has its own exclusive territory based on post codes and purchase price is generally 2x the net income of the existing business.

We also sell online.

Our books and gifts sell up to 70% off recommended retail price. As the leading direct seller of books and gifts across Australia, we use our strong buying power and proven business franchise model, to save money for the consumer and to help you build a prosperous and successful business.

For the opportunity of a lifetime… and to realise your dream, apply now.

ECOMIST AUSTRALIA Established in 1994, Ecomist Australia is a leading provider of premium quality hygiene products and services, specialising in Odour Control and Insect Control.

Our core product is an innovative programmable aerosol dispensing system that won an award for the Best New Product from The Aerosol Association of Australia and New Zealand. Our aerosol products are manufactured in New Zealand and we offer a natural insect killer and over 50 fragrance options with French perfume.

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FASTWAY COURIERS AUSTRALIA Run your own rewarding business and take control of your future as a Fastway Courier Franchisee.

As a market leader in nationwide courier services, our multi-award winning franchisees enjoy • Revenue support packages* • Low start up costs • No weekend work • Ongoing business support and training • Exclusive territories • A perpetual franchise agreement with no ongoing fees

So, if you’re ready for a positive change, we’d love to hear from you. *Conditions apply

Specialists use GroutPro’s own branded range of professional quality products including cleaners, sealers, tile Anti-Slip treatments and shower glass restoration and sealer coatings. This is a complete package to get you up and running in your own business fast.

FASTWAY COURIERS NEW ZEALAND Run your own rewarding business and take control of your future as a Fastway Couriers Franchisee. As a market leader in nationwide courier services, our multi-award winning franchisees enjoy:

• #1 place in a niche market, with a unique product range

• Low start up costs

• Comprehensive, hands-on training, with ongoing business and technical support

• No weekend work

• Average franchisee tenure now over 15 years.

• Ongoing business support and training • Exclusive territories

No prior business experience is needed, just a great attitude and an ability to talk to people.

So, if you’re ready for a positive change we’d love to hear from you. *Conditions apply

LITTLE KICKERS & LITTLE RUGBY AUSTRALIA Double brand opportunity!

We offer fun, energetic, healthy, imagination based activities for kids aged 18m to 7 years.

With over 50,000 children attending weekly, we pride ourselves on being the leader in preschool sport!

Little Kickers & Little Rugby offers a business path for people whom are passionate about working for themselves and creating a FUN environment whilst achieving financial success through our Play Not Push ethos.

Franchisees need not have a background in business as full training is provided. Being personable and a self-starter is essential.

GROUTPRO Earn between $50 and $200 per hour and get a high return on investment in the booming Home Improvement Industry with LOW SET UP COSTS & little competition.

GroutPro specialises in the after-market care of tiles and grout to homeowners and businesses. Offering a range of professional services from stain protection of new tile and grout installations to our flagship grout “colourseal” application which rejuvenates and recolours old grout saving customers time and money without having to re-tile.

Our solutions provide all the benefits of double glazing without the hassle of replacement windows. At Magnetite, we aim to exceed our customer’s expectation of comfort. We believe this starts with the first contact and continues through an assessment, installation and after sales service. Join the team that has: • 18+ years technical and practical experience

• Revenue support packages*

• A perpetual franchise agreement with no ongoing fees

Magnetite specialises in double glazing existing windows, as the core offering in a product range that includes seals, tint and other complementary window treatments.

Members of the FCA, the peak body of the country’s franchising sector, since launching, Little Kickers has become the most established and fastest growing preschool program in Australia, replicating the success that the brand has enjoyed around the world. Seeking interest for Sydney & Surrounds, Melbourne and Surrounds, Canberra, Coffs Harbour, Port Macquarie, Northern Territory and Tasmania (Hobart & Launceston).

MATT FIDDES MARTIAL ARTS Join entrepreneurs and instructors who are part of our concept in providing children and adults with answers to the questions which worry them most: how do we stop kids being bullied or tempted into drugs; how do we equip them, and ourselves, with the self-confidence, character and ability to succeed in a competitive world?

Focusing both mind and body to develop life skills is why Matt Fiddes Martial Arts Schools became the largest Martial Arts franchise in the world. This success is down to hard work, high values and simple principles – built on a commitment to provide the most professional instructor training possible. This is based on developing role models, respect, discipline, better school grades, confidence, self-defence, focus and maintaining a “can do” attitude.

Our programmes help students lose weight; improving both their self-respect and physical abilities. They also learn self-defence in a fun, safe environment.

MAGNETITE WINDOWS Do you have a trade license or are you hands-on? Do you want to become your own boss?

Your WINDOW of opportunity is now.

As noise and energy efficiency are prominent issues plaguing home owners, now is the perfect time to become part of an expert team who solve these issues every day.

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No prior business experience is needed, just a great attitude and an ability to talk to people.

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NANOSHIELD New & Exclusive in Australia Unique and exclusive to NanoShield Australia, Cosy 24/7 has finally reached Australia after strong international success in over 30 countries. Share in this opportunity as we couple a great product with an effective business system to provide a cost-effective solution to a rapidly growing market with minimal competition in its class.

Australia’s increasing energy problems, harsh climate and the impacts of climate change is predicted to create rising demand. The superiority and affordability of Cosy 24/7 makes it well poised to sustainably service this demand.

Franchises currently available for discerning and passionate individuals to help improve the quality of life for Australians through the sales and installation of Cosy 24/7!

Currently, there are no direct competitors in the energy saving window nanotechnology coatings market in Australia! Seize the opportunity!

SMALLPRINT Smallprint is a home based business that handcraft silver keepsake jewellery. We capture loved ones fingerprints, hand or footprints, children’s drawings, words or names in a range of charms, pendants, key rings and cufflinks.

Having commenced in the UK in 2005, Smallprint is now a global brand with franchisees in over 20 countries including Australia, which has 30 plus franchisees in all states.

Exclusive territories are still available for sale.

If you are looking for a home based business that returns more than a hobby then we maybe the right one for you. You do not need jewellery experience as full training is included prior to commencement.

Strong customer service skills coupled with a drive to succeed could see you in a business that rewards in so many ways.

SOCCAJOEYS

This is a sincere “Be Your Own Boss” system.

Soccajoeys has been developed by a team of childhood development experts to provide soccer programs to children aged 2.5 to 8 years. We deliver our programs to over 27,000 children annually with over 300 classes in operation across the country.

You genuinely keep all the profits!

Our mission is to give children the opportunity to develop skills for life through soccer. Transform lives, including yours and become a Soccajoeys Franchisee.

We offer a unique opportunity for people to become mentors to the next generation of Australian kids, instilling in them a passion to lead healthy and active lives.

• Ongoing training to boost your success • Continuous Head Office support (marketing, operational, financial and systems) • Access to industry leading childhood development programs • Coaching and mentoring workshops • Trusted Australian brand • Become part of a thriving and energetic network of franchisees • Your own business and exclusive franchise zone • Rewarding career in the childhood development industry • Flexible lifestyle.

SPRAY PAVE AUSTRALIA Earn up to $3,300 per week.

With Income Guarantee.

That’s right, up to $170,000 per year!

Our service decorates concrete. We Spray Pave,Polish, Epoxy and Stain. Jobs are inside and outside. Customers are domestic, commercial and Government. Our license structure allows you to choose when, where and how you want to work!

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• Learn a range of new lifelong trades.

• Guaranteed work available anytime after training.

• Head office training plus follow-up on your own job.

• Customers contract and interest free finance.

• Lifelong support from 6 Head Office trainers.

• From $7,000 deposit + Support Payment Plan.

Established in 1991, Security with Australia’s largest and oldest network. The name of the industry.

STAIN BUSTERS Stain Busters was founded 27 years ago in 1990 and operates throughout Australia and in New Zealand as You’ll Say WOW Carpet Cleaning.

It has a Point of Difference whereby it can remove 99.99% of stains. Hardly a day goes by where other Carpet Cleaners don’t send us jobs they were unable to complete.

Our new Franchise Partner Model has set a very high bar for other opportunities to try and follow.

• A Guaranteed Income of $5,650 a month for five years • Monthly Bonus Payments of up to $3,000 • There are a number of other incentives • There are Zero Franchise Fees • The majority of your work is supplied • Call Centre makes the bookings for you • Money collected for you • You are paid weekly • Exceptional Training and Ongoing Support

APPLIANCE TAGGING SERVICES Looking for a franchise with on-going repeat business, large territories and access to an existing client base to get you started?

With over 12 years’ experience, ATS are Australia-wide specialists in Electrical Testing and Tagging in accordance with AS/NZS 3760:2010. Providing expert technical, admin, business and sales support, access to our National client base and comprehensive on and off-site training, ATS are committed to helping its franchisees grow profitable and successful businesses.

• New Toyota Hiace Van and State of the Art Equipment.

INGOING FROM $20,500.00 PLUS GST

THE CASH BACK APP

Along with installing double glazing Thermawood installers also fit draft/sound seals to all types of windows including double hung windows, casement windows and doors.

Are you looking for an opportunity to build a true residual income?

Become part of the success story with:

Our franchisees list local businesses on the app.

• Strong industry Growth

Businesses share the app with their customers and customers share with their friends. This is your opportunity to join what we believe will become the next big viral app and potentially Australia’s largest loyalty platform.

• Patented product new to the Australian Building industry.

• Low cost of entry with interest free terms available • No ongoing franchise royalties’ payable • Exclusive territory with uncapped earnings potential • Thorough training with ongoing support • Exclusive access to world’s first ZERO transaction fee payment platform Contact us TODAY to take back control of your life and your time.

We’d love to discuss what this opportunity could mean for you.

THERMAWOOD Thermawood Retro-Fit Double Glazing System is designed to retro-fit double glazing into existing wooden windows.

Proven systems and processes with the Thermawood Patented drainage system.

Retro-Fitting fitting double glazing into existing wooden windows allows the home owner to retain the character of their windows, be more energy efficient, reduce energy costs and reduce noise.

• Full Training and ongoing support • Full Advertising & Marketing

We are looking for passionate self-motivated people to join the Thermawood team.

TRENT DRIVING SCHOOL At last! You can have a meaningful career helping learner drivers.

Have you been looking for a career that provides you with the opportunity to grow your own business, help your community become safer and truly make an impact?

Work with a proven system and brand.

As a Trent driving instructor, the time you spend training learner drivers will have a positive impact on their lives and create a safer future for all road users.

This exciting business opportunity will give your day purpose. Get involved with a strategy to reduce the road toll.

Great flexibility and work life balance.

Inclusions-

No prior electrical experience is required, just a passion for safety and a commitment to growing your business.

With low entry fees, minimal franchisee administration, and average returns between $1,000 and $3,000 per week an ATS franchise may be just the opportunity for you.

ATS were named FCA Emerging Franchisor of the Year 2011 and the FCA National Franchisee of the Year 2013 (less than 2 staff).

ATM2GO ATM2GO is the only franchised ATM business in Australia. With more than 25 years’ experience in the ATM industry we were one of the first to provide mobile ATMs at both large and small events. We have franchisees located across Australia and we are looking for more people interested in working for themselves and owning their own business.

With ATM2GO you are in business for yourself but not by yourself. No prior ATM or electronic experience is necessary. We provide a comprehensive training program that covers all aspects of ATM operation and maintenance. Plus, we provide 24/7 support with a Tech Desk, not just a help desk!

We’re the ATM experts! We take the hard work out of running an ATM business for you by providing the supply of equipment, spare parts and guidance regarding events, fixed ATM placement and day-to-day issues.

BEGIN BRIGHT

• Best in market website

• + much more!

Begin Bright has been leading Australia’s School Readiness and Primary Tutoring market over the last 10 years, and is now expanding with new territories available throughout Australia!

Get started!

Since 2008 we’ve grown to over 30 centres,

• Online live booking system for use in vehicle • Sales and administration teams

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From $50,001 to $100,000

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delivering 84,000 sessions each year, with the mission is to help children become happy, smart and confident.

With exciting opportunities for growth, there’s no better time to join our network of business owners! Becoming a Begin Bright franchisee means you’re equipped with operation and management support, a state of the art online booking system and strategic guidance – enabling you to run your best business!

No matter your background, franchising with Begin Bright is an exciting decision.

FOCALPOINT As a global company with a local presence, FocalPoint has been going strong for 12 years. We offer exclusive franchises in Business Coaching and Professional Development Training.

Our services are highly sought-after as our materials and methods have been developed by world-renowned business expert Brian Tracy over 35 years of research. We guarantee results and have over 5 million satisfied graduates of our programs.

FocalPoint is a brand you can trust.

You can own your own business coaching & training franchise. As a certified FocalPoint professional business coach and trainer, your clients range from the solopreneur to multi-national companies. You receive full training, resources and support so you can confidently make a fast, profitable start and build a long-term, residual income. Our 200 coaches worldwide recommend this opportunity as a personally-fulfilling and financially-rewarding business offering a balanced lifestyle.

GUTTER-VAC Prior to Gutter-Vac, there was only one way to effectively clean gutters, which was by hand. In 1995, Warren Ballantyne pioneered the first effective gutter vacuuming machine, revolutionising the gutter cleaning industry.

Gutter- Vac then began franchising throughout Australia in 2000. To this day, Gutter-Vac is a family owned business.

The Gutter-Vac service system allows for the quick and safe removal of debris and leaves from domestic and commercial properties. Gutter-Vac is an innovative cleaning franchise using revolutionary vacuum equipment to quickly and effectively clean corporate and domestic gutters, roofs, ceiling spaces, rainwater tanks, stormwater sumps and much more. As there is no other systemized service in the market that competes with Gutter-Vac, its acceptance by home owners and commercial property owners has been rapid.

Today, Gutter-Vac is the largest gutter vacuum cleaning network in the world.

The Gutter-Vac network consists of 80+ franchises across seven states and territories including Queensland, Victoria, New South Wales, ACT , South Australia, Western Australia and Tasmania. Gutter-Vac has now expanded internationally to Atlanta in America as Outback GutterVac.

JIM’S POOL CARE MOBILE POOL SHOPS Join our team and Australia’s largest franchise system to build a business that suits your goals and lifestyle.

Owning a Jim’s mobile pool shop means you can earn money from multiple streams.

You charge for your time and charge for the lucrative pool items such as chemicals, pool

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equipment and pool accessories. This means your income is not limited by how many hours you can work and gives you scope to grow the business to a level that suits you.

Another great bonus is our FLAT franchise fee. Yes, our fee is a flat franchise fee system so you can work hard and earn as much as you like and pay the same at fee with all training and ongoing support included.

If you are ready for a change then you need to put us on your list.

We have selected opportunities around Australia so give us a call and come for a ride along.

JUST CUTS™ AUSTRALIA & NEW ZEALAND Join the largest, most successful hairdressing network in the Southern Hemisphere, servicing over 90,000 clients each week! Just Cuts™ offers a fixed franchising fee, with flexible finance options and ongoing business and marketing coaching, guidance and support. Did you know that most Just Cuts™ Franchise Owners are not hairdressers and just over half own more than one salon?

The IFG 50/50 franchise offers the opportunity to get started quickly and with a more modest capital base.

Why?

SNAP-ON TOOLS Snap-on Tools Australia & New Zealand is a mobile franchise operation putting high quality tools and equipment into the hands of mechanics, engineers, and other professional tool users across the country.

Why? Because our proven systems, support and training allows your Stylists to easily run the business for you.

Just Cuts™ are also excited to announce our kiosk option! With only 49 sites available Australia wide, you can buy yourself a new lifestyle from just $80,000!

Just Cuts™ Franchisees also have exclusive access to our professional retail range made in Europe; JUSTICE Professional™.

LISTEN TO YOUR BODY (LTYB)

Snap-on Tools is a subsidiary of Snap-on Incorporated, a leading global innovator, manufacturer of tools, diagnostics and equipment solutions for professional technicians, with an established network of franchise operations across the globe.

After 30 years in the Australian market, Snap-on continues to perform, providing robust financial results for its network of over 175 franchisees.

Extensive training and ongoing support is provided - no previous mechanical experience required.

Snap-on offers an exclusive finance package to assist new franchisees.

Because we syndicate all transactions with our franchisees 50/50. Franchisees do the ‘people work’ - we do the ‘paperwork’ – a great combination to achieve an aboveaverage return.

V.I.P. HOME SERVICES FENCING & HOME MAINTENANCE V.I.P. Home Services - Fencing and Home Maintenance is a newly launched division that is part of the iconic V.I.P. Home Services group. You have a choice of owning a Fencing Franchise or Home Maintenance Franchise or why not do both?

Affordable Franchise Opportunities NOW available in Melbourne, Victoria and Perth in Fencing or Home Maintenance.

• 8 Weeks Paid Training - Fencing • 4 Weeks Paid Training - Home Maintenance

In fitness, one size doesn’t fit all. LTYB sessions are individually programmed to drive 90%+ retention rates across all studios and build a strong local fitness community.

THE INTERFACE FINANCIAL GROUP - IFG 50/50

• Comprehensive Cloud based IT systems

Established in 2004, LTYB has proven progressive systems, high level franchisee support and strong goals of member results and Franchisee Profitability.

The Interface Financial Group franchisees provide short-term working capital for businesses by purchasing their invoices at a discount.

• And much, much more.

LTYB look for motivated people who have a passion to make a difference to member’s lives. To be successful in the fitness industry, you need to walk the talk and continue to grow as a business leader and fitness leader.

In the current economic climate SMEs need working capital but banks are unwilling or unable to provide it. Many of these businesses are turning to Interface for a

• Ongoing coaching and mentoring • National and local marketing Regional (Master) Opportunities available!

Currently we are seeking suitable candidates to take up this excellent but limited opportunity that is available Australia Wide. Husband and wife teams or business partners with integrity, energy and selfmotivation should apply!

LTYB currently have 11 Studios in Victoria and Queensland with expansion plans Australia Wide. We offer our franchise partners an exclusive territory, full marketing support, IT and Software support, Online Operations Manual access and training, Studio business coach, Franchisee Induction program, supplier discounts, professional development opportunities and everything required to open your studio.

We are currently recruiting Franchise partners Australia wide.

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solution. Interface has been in the alternative finance market business since 1972. It is the leading alternative funding source for business, and distributes its service through its franchise network in Australia, New Zealand, Canada, the Republic of Ireland, the United Kingdom, the United States, Mexico and South Africa.

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From $100,001 to $250,000 DR BOOM COMMUNICATIONS Dr Boom has brought technology and fashion together since 1994.

We have been both the leaders and innovators in mobile devices with brands such as Beats, JBL, Diesel, Kate Spade and Bodyguardz.

Our category leading marketing and promotional activities and an innovative vending program across the east coast continues to set the standard.

Join the Boom!

HITMAN PROFESSIONAL PEST CONTROL A Hitman franchise is a highly profitable business generating in excess of $100,000 net of expenses in its first year. Clients are generated by Hitman and allocated so franchisees only have to focus on doing an exceptional job for clients.

Hitman has been servicing clients in Brisbane, Gold Coast and Sunshine Coast since 1995. The company services approximately 20,000 homes and businesses each year and has a client retention in excess of 80%.

The head office staff manage marketing and sourcing of new clients as well as the rebooking of all existing clients. They also manage the day to day scheduling of jobs for each franchisee.

The new franchisee receives full training and then starts earning from day one. The franchisee collects money from the client and head office invoices the franchisee on a fortnightly basis.

MAIL BOXES ETC (MBE) With Australian SME’s employing over half of the working population together with the increase in numbers of home and internet based businesses, the need for basic business services like packing and freight services, printing, mailboxes and virtual office facilities are all in high demand.

Established in 1980 Mail Boxes ETC (MBE) is one of the world’s largest Business Service Franchise with more than 1,700 service centres worldwide with 36 of those here in Australia that offer these in-demand services all under the one roof.

Having these 3 in-demand services sets MBE apart from other franchises too. It means that owning a MBE is like owning 3 franchises in one; print, freight and mail boxes giving our franchisees 3 strong revenue streams.

Initially establishing itself as an exhaust and muffler specialist, we’ve become the auto service experts specialising in car service, brakes, suspension and, yes of course, exhausts.

There are currently over 80 Midas Auto Service Expert centres across Australia and we have an ambitious plan to grow our network across Australia. We are always looking for new franchisees who have a passion for all things automotive.

Midas franchisees are comprehensively supported in all areas of business, including workshop operation, national & local marketing, a fully-integrated point-of-sale system and ongoing local field management expertise.

MIDAS Midas is a trusted household name with over 40 years of experience in the Australian market.

POOLWERX Poolwerx are the leading global aftermarket swimming pool retailer and service company. Our history of innovation is multiawarded in franchising and the industry.

• 25 years of experience • Proven systems and support • Three income streams (retail, residential and commercial) • Database of all pools

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Our franchisees are a big part of the customer’s experience. So, it is important to us that the right kind of people join the SpudBAR family. If you love the idea of bringing fresh and healthy to the fast casual world, and are excited by the idea of owning your own business then we’d love to hear from you.

THEOBROMA, CHOCOLATE LOUNGES, PAVILIONS, BARS • CRM specific to the industry • Industry best buying power Poolwerx have opportunities at all investment levels.

Join us as a man in a van, progress to multivans, a retail store and vans and then in multi store. Or purchase an existing fast start mobile territory or retail mobile business.

Whatever your journey, we will help you realise your vision.

SANDWICH CHEFS®

SpudBAR takes the relationship with our franchisees very seriously, understanding that investing in a business is one of the biggest financial commitments that a person can make.

The earliest record of chocolate was over two thousand years ago in the central American rainforest where the tropics is the ideal climate for the cultivation of the plant from which chocolate is derived, the Cacao Tree, Latin name “Theobroma Cacao” or “Food of the Gods”.

The concept was developed in response to the spiralling demand of high quality chocolate and chocolate beverages with the added enhancement of a full food menu, with some stores even offering a licensed venue.

Join our team of Sandwich Chefs® and be a part of Australia’s most successful deli-carvery franchise with 50+ stores and continued growth across Australia. We provide over 30 years of brand history with tried and tested offerings from gourmet sandwiches to our carvery, fresh juices and barista made coffee.

Our franchise offers:

Our most successful franchisees exhibit great customer service skills and team leadership attributes.

• Professional support team with a range of skills to assist you.

With a 6 week training program, we will cover all aspects of your business including in-store operations and business administration. A supportive marketing team will work with you to promote your store from promotional campaigns, brand awareness initiatives and local area marketing.

• Innovative and unique concept that includes all of life’s pleasures- chocolate, coffee, food, alcohol and retail.

• Highest quality chocolate products.

• Full training provided.

With new stores opening in countries across the globe, be part of something special.

We are looking for hands on people who are passionate about what they do and are ready to reap the rewards of their own hard work.

SPUDBAR SpudBAR was founded in 2000 around the simple promise to create delicious food that’s healthy, great value and convenient. We discovered the spud was the perfect platform to build a meal around – delicious, filling and much healthier than the typical meal staples of pasta, bread and rice.

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Our franchisees are warm, down to earth people, passionate about bringing healthy, tasty food to their local communities.

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$250,001 and above

We are experiencing a successful period of growth globally, so we are looking for franchise partners in the main cities of Australia who have the synergy and resources to be part of our success story.

BoConcept main figures: • Global brand | 65 countries, 265 brand stores • Stores | Europe: 149; America: 43; MENA: 10; Asia-Pacific: 63 • Yearly | 15,000,000 website visitors, 4,000,000 in-store visitors and 125,000 customers.

Why join BoConcept?

7-ELEVEN At 7-Eleven, we take a different approach to franchising.

We take care of the things that are a hassle about being a small business owner, and provide you with support every step of the way.

• Global brand, with an outstanding reputation and demand worldwide • Solid franchisor, with a unique, proven and vibrant concept • Exceptional training and support in all business areas • Superior store opening process

We’re looking for people with bundles of energy, love providing customers with great service, are great leaders and communicators and have an eye for detail.

• Profitable business with a quick generating cash flow model.

So if you think you’ve got what it takes, we’d love to hear from you.

Clark Rubber is a well-known and iconic Australian business, and has been a part of the retailing landscape for 70 years. Clark Rubber commenced franchising in 1995 and since then has grown its store network to more than 60 locations nationwide.

BOCONCEPT From Denmark to the world since 1952, BoConcept is present in 65 countries, with 265 brand stores specializing in interior design: furniture and accessories.

BoConcept is more than a franchise. It is a concept for creating outstanding modern and sophisticated living spaces at affordable prices.

CLARK RUBBER

development, site selection, comprehensive training and ongoing marketing and IT support. Clark Rubber has identified several great opportunities for further growth, and is now looking for friendly, customer service-orientated business people to join its network.

CREMA ESPRESSO Crema Espresso is a franchise that is continually evolving. Already well known for their food and premium coffee, Crema stores are beginning to make waves in the retail community with their store designs.

When recruiting new franchisees, Crema is always looking for community minded people. The business believes that this mind set and attitude brings a warmth and connection to customers that is invaluable.

Crema Espresso provides a business with supervision and consulting readily available.

This includes everything from full operation manuals, point of sale terminal, uniform package, store design & fit out together with ongoing research and development supported through marketing and advertising.

Joining the Crema Espresso team gives you the opportunity to own your own business, but not just any business.

• A proven business with a simple operation; • Flexible floor plans; • Local support;

In 2006 Clark Rubber was awarded the prestigious ‘Franchisor of the Year’ honour by the Franchise Council of Australia, and today, Clark Rubber is Australia’s leading foam, rubber and pool retailer.

• Regional advertising;

Clark Rubber offers a unique business proposition which includes business

• Store development assistance;

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• A four week training program; • Ongoing learning for franchisees and their staff; • Design support;

• Staff guidance; and

• Ongoing training

• Much, much more.

• Family run national company

Crema Espresso where coffee is the souvenir of the experience.

NENE CHICKEN

FASTA PASTA With our authentic Italian background and 30 year success story, Fasta Pasta is now Australia’s largest, independently owned group of ‘fresh pasta’ Italian restaurants. An innovative ever-changing menu, with healthy options and a commitment to outstanding service, have all contributed to Fasta Pasta being voted Roy Morgan’s ‘Quick Service Restaurant of the Year’ in 2012.

Loved for our affordable, fresh, family meals in relaxed fully licensed surroundings, this is a great opportunity to be part of our winning national organisation.

Extensive initial training and ongoing support is provided. New franchisees undergo 12 weeks of training in one of our company restaurants covering areas such as, front of house, kitchen (all areas), necessary bookwork, PPS, and Management skills.

HAIRHOUSE WAREHOUSE Hairhouse Warehouse, Australia’s leading hair & beauty brand, has huge plans for the next few years to expand with 20 new stores planned to be opened around the country.

We are looking for passionate people who want to own their own business, work for themselves and take control of their own destiny.

Hairhouse Warehouse has become a household name in Australia, with a proven business model that continues to evolve and generate strong returns for franchisees.

NeNe chicken is one of the top Korean fried chicken chains with over 1,000 outlets in South Korea. NeNe Chicken flew into Australia in 2015 and has rapidly expanded to all over Australia.

MAD MEX FRESH MEXICAN GRILL We are continuing our growth, and are actively seeking new franchise partners. Our menu is heavily influenced by fresh, Baja style Mexican food made with authentic ingredients.

Made to order, we pride ourselves on delivering the NeNe experience with uniquely marinated and batter coated fried chicken and range of authentic NeNe sauces.

NeNe Chicken believe the key difference to our franchise system is our genuine desire for franchisees to feel that they are part of the NeNe family - that everybody succeeds when together.

Our focus is on serving fresh quality food in a quick environment whilst still allowing customers to tailor meals to their personal tastes and dietary requirements.

NeNe Chicken invites you to start your own successful story today by becoming a NeNe franchisee.

• Do you have the drive to lead the way with fresh authentic Mexican flavour?

OPORTO

• The passion to utilise your past business knowledge & skills to deliver an outstanding customer experience?

• A background with QSR, sales or marketing ideal, but not essential.

• Ability to lead, inspire and motivate staff!

Become your own Head Honcho!

We are seeking expansion Australia wide.

MYFIRSTGYM MyFirstGym is a destination for kids to fall in love with movement and fitness, a place that supports skill development and inspires kids to move their bodies through their most important developmental years. With 8 out of 10 kids not getting enough physical activity each day, and instead spending up to one third of their day in front of a screen, MyFirstGym is the solution that families all around Australia have been waiting for.

When you become an Oporto franchisee, you’re not just buying a restaurant, you’re buying into a powerful brand, built over 30 years. Many other brands and product categories have come and gone yet Oporto continues to grow.

With over 150 stores nationwide, you’ll find us in cities, suburbs, food courts, stadiums and airports. Oporto is a celebration of Portuguese- Australian flavours that continues to evolve as our nation’s tastes and preferences change.

Our wide customer base gives Oporto an ideal business platform on which to grow.

We serve drive thru, dine-in and take away meals, and we also offer delivery to your door.

If you are passionate about customer service and possess business acumen, there has never been a better time to become an Oporto restaurant franchise owner.

Apply now!

Working with industry leaders, you can feel confident you’re joining an experienced and reliable team. Our Ownership Group has a long and successful business history, and attribute a large portion of this success to being highly engaged and invested in the success of each of our franchises.

• A highly engaged market • Low start-up costs • Low-end royalties • Low staffing costs

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• Hands on Head Office and Marketing support

• Lease negotiations

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Tips and Traps when Buying a Franchise

Show me the money!

by Suzanne Jarzabkowska Franchisees are first and foremost entrepreneurs.

People with a passion to own and operate their own business and the tenacity to weather the challenges for the rewards they seek.

What differentiates them from other business owners is their appetite for risk.

The facts are that four out of five independent small businesses fail in the first five years and almost half of them in the first year. Franchisees look to reduce their risk by buying into a proven business network.

Comparing the failure rate of about one out of five franchise business failures in the same period certainly supports that belief.

However simply buying a franchise doesn’t ensure your success. Some franchisees do very well and others less so, even in thriving networks. Ensuring you’ll be one of the success stories starts now as you assess the franchise opportunities available, gather and analyse all the information you can get, weigh up the risk and make the right decision for you.

How much money do you have to invest?

This might seem obvious but work out how

“This might seem obvious but work out how much capital you can raise. This may be borrowing against the equity in your home, loans from financial institutions or family or using your savings.”

Suzanne Jarzabkowska | CEO and Partner | DCS Group

much capital you can raise. This may be borrowing against the equity in your home, loans from financial institutions or family or using your savings. Determining how much you can really afford will narrow down the choice to what businesses are available in that price bracket.

What are the real costs including operating capital?

Operating capital is the money needed to meet the operational costs until the business is profitable. This includes rent, cost of goods, wages, loan repayment, utilities and your wage as an owner operator so you can cover your living costs such as a mortgage or rent, car, credit cards etc. Businesses vary but it may take many months to turn over enough to match your current income. You need to be sure that you will survive, so do your research and ask other franchisees in the network how long it took them.

The fit out is another cost which can escalate, and you need to ensure any possible increase doesn’t eat up your operating capital. Check

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with the franchisor whether the fit out costs are fixed or just estimates and contact the fit out contractors directly to verify how the contract is managed.

Do the numbers work?

Ask the franchisor or recruiter for a business plan or a financial model preferably based on trading data (P&Ls) from other franchises and corporate owned businesses. You need to calculate how many products or services you need to sell, how many clients you need to service per day, and what the average spend needs to be to break even after covering your overheads. Examine the operating costs to ensure rent, labour and the cost of goods are a viable percentage of your turnover.

Analysing this information is imperative so you can figure out if the business will work financially.

How to calculate your return on investment (ROI) Generally, the larger your investment, the longer the payback period will be. This

includes interest on your loans and the operating capital, noting you will need to factor in a reasonable salary during this period. As a very rough guide on investment to return period: • Under $100K - 12-24 months • Around $180-400K - 2.5 to 3.5 years • From $500-$850+ - 4 years or more • Over the $1M+ - 5 years or more The higher the investment, the higher you would generally expect your annual reward, with businesses under $100K bringing around $50-80K and $1.2M+ business investors seeing returns of around $250-400K per annum. Typically however, businesses have a ramp up period, so meeting all your obligations and making a living wage in the first year will provide the foundation for more rapid growth in the next three to four years. Understanding this will ensure the (typically) five to six year terms of your franchise agreement and lease are sufficient to get your initial investment back, plus the eventual goodwill when you sell.

What kind of business should you look for?

The most important aspect of buying a franchise is the clear understanding that the successful franchise requires an owner/ operator to be truly profitable. So, your investment is not just your money, but your time. Is this a seven day a week franchise, such as a fast food business; will you need staff; will family members work in the business and be giving up a job? Or are you looking for a part-time opportunity such as a work from home offer; do you want a mobile rather than a storefront business, or maybe a B2B working only Monday to Friday? Running your own business impacts your lifestyle and your family need to be on board with how the sacrifices now will bring a long-term reward.

Other factors to consider location, seasonality etc.

Will the site you are considering generate enough revenue; is there enough foot traffic to make sufficient sales? Go to the location and literally count the number of people

that walk past your intended site at different times of the day and on different days of the week.

Is the business seasonal; do sales vary significantly throughout the week/year and are they consistent throughout the day? This will affect your staffing levels, wage costs and you will need to consider whether a potentially seasonal business, such as icecream makes enough money in the summer to cover the possible lower sales in winter months in colder climates.

Where your business is located can also affect profitability with significant variation between sales in units in the same network.

So, for mobile or bricks and mortar franchises, go to the site or suburb where you want to operate and assess: are potential customers in the area, do you have an exclusive operating or marketing territory and who are your competitors?

How far will you have to travel from your home? An outlet in your area has advantages of reduced travel time and of being part of the community and market you know. Look carefully at the factors that have made the most successful operators profitable and what may be the factors for those who are less so.

How do you know you’ll enjoy the business?

Try and find something you are passionate about, that matches your experience and skills. Franchisees typically spend seven years in a network, so loving and believing in what the brand offers is paramount to your success. Meet the franchisor and speak to other franchisees - you want to work with dedicated people you respect and who are as hardworking as you are. Understand that your compliance to the franchise operating systems and your obligations to the franchisor are also vital to your success.

You want to run your own business, but the reason you are buying into a franchise is to reduce the risk of establishing your own business.

Get independent verification Research the business online, go to several outlets and see the business in action and most importantly speak with other franchisees and even former franchisees.

Check out the Operations Manuals These should tell you exactly how to run your business: training, costs, ongoing support, what marketing the franchisor does; what marketing collateral is provided and how will you be able to use that to market your business locally. Many franchisors are reluctant to provide you with a copy of the Operations Manual before you sign the Franchise Agreement because it contains confidential information. However, ask to see it at head office and note the sections relating to performance criteria and legal obligations.

Take professional advice You wouldn’t buy a house without getting a building or pest report or retaining a conveyancer or lawyer to handle the contracts. Buying a franchise is as big a decision – so protect yourself and your investment with the relatively small amount it costs to engage professionals. The Franchising Code also recommends this in their Statement of Independent Advice, so get the business and legal advice in writing and try to negotiate a fixed fee for the services.

DCS Group CEO and partner, Suzanne Jarzabkowska, heads up the multidisciplinary franchise team at DC Strategy. She has achieved successful outcomes as an entrepreneur in the private sector, in the international NGO sector and in the franchise industry.

Suzanne specialises in organisational behaviour, performance and change management, franchise development, risk management and conflict resolution. She writes and presents widely domestically and internationally advising franchise networks, private enterprise, public sector and not-for-profit organisations. suzanne.jarzabkowska@dcstrategy.com

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“The most important aspect of buying a franchise is the clear understanding that the successful franchise requires an owner/operator to be truly profitable. So, your investment is not just your money, but your time.”

They can tell you about training, what it covered, whether it was available for their employees, any upfront or ongoing costs.

They can explain how long it took to become profitable, how much operating capital they needed, about seasonality, rents, staffing and how the franchisor is to deal with.

And speak with the franchisor about any concerns; ask questions about their business plans and the level of support they give franchisees. Understand their vision for the brand and the culture of the network to see if your values are aligned.

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Tips and Traps when Buying a Franchise

Securing your investment!

by Naeem Hashemi Assessing your own compliance In simple terms, buying a franchise is buying access to a franchisor’s intellectual property for a designated term: their trade mark, operational systems and procedures, branding, products, services, supply, training and support. Your willingness and ability to comply fully with every aspect of the franchise business will be fundamental to your success. You should have a good understanding of your responsibilities to the franchisor regarding financial reporting, attending conferences or meetings, and achieving the minimum performance criteria. These important details are outlined in the franchise agreement and the operations manual.

The Franchise Documentation pack The franchise agreement will be accompanied by several other documents described below. You and your business partners need to read every line in every document. Don’t worry if you don’t understand any particular point - get a highlighter and make notes of all these and anything you don’t agree with and ask your accountant and lawyer. This will ensure that you make the best use of your advisors’ time.

“Researching and buying a franchise is a complex process but getting it right can be so rewarding as tens of thousands of successful franchise small business owners in Australia can attest.”

Naeem Hashemi | Director of DCS Lawyers | DCS Group

The Disclosure Document Existing and Former Franchisees The Disclosure Document (DD) has a list of current and previous franchisees, as well as their contact details. Contact at least three current franchisees and a couple who have left the network. Asking them questions about training, profitability, franchisor support and anything else you want to know will help you understand how they achieved their success and what, if any, challenges they faced.

Experience of directors The DD outlines the experience of the directors and officers of the franchise.

Broadly speaking operators with extensive management skills and experience in business, should be more likely to run a tight

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operation with good systems than one whose operators have less skills, qualifications or experience. But you need to exercise your judgement as every entrepreneur and every business starts out small and sometimes even well-established networks can experience difficulties and fail, even after many profitable years trading.

Intellectual Property and Trade Marks Make sure that the franchisor has registered trade marks. These are usually included in the disclosure document. If the trade marks have only been applied for but are not yet registered, it may indicate third parties are using similar trade marks. If this is the case, check with your lawyer, as you need to ensure the franchise you are considering

Franchising Code of Conduct You will also receive a copy of the Franchising Code of Conduct (generally called the ‘Code’). This outlines all of the measures, guidelines and procedures the Australian Competition and Consumer Commission (ACCC) has provided that govern the way in which franchisors and franchisees conduct their business and relate to each other. Read this document thoroughly, as understanding your obligations and the processes and resources available to you in the hopefully unlikely event of a dispute with the franchisor, is important upfront.

Leases When buying an existing business, you will need to either negotiate a new lease or ensure that there is an option for a further term or extension. Ideally the term of the lease should line up with the term of the franchise agreement, which in retail or fast food will be around five years. Similarly, if the franchise is an existing mobile business with a vehicle lease – check the terms of the vehicle lease for renewal options. Also, contact the landlord and confirm if there are any plans for redevelopment that will impact your business for the duration of the lease. And if you do proceed with a lease in a centre where redevelopment is scheduled, have your lawyer negotiate adequate compensation and make the franchisor party to that outcome.

A Lease and a Step-in Deed In some cases, the lessor grants the franchisee a lease, but an additional deed accompanies the lease. It covers the event where the franchisee abandons the business or is lawfully terminated from their franchise agreement. The deed permits the lessor to grant the franchisor the right to take over or ‘step in’ to operate the business. Again, ask your lawyer to ensure you understand your rights and obligations.

Understanding and Managing Risk Ultimately this process of research or due diligence as it’s called, is all about reducing the risk of going into business.

So, at the end of doing everything you can on your own, speak to a lawyer and an accountant/business advisor who specialise in franchising. This is your best insurance against future disputes, business failure and personal loss. lt can assist you with your negotiation of the Franchise Agreement and in the end, give you the peace of mind that you’re making the best-informed decision to buy a franchise.

Researching and buying a franchise is a complex process but getting it right can be so rewarding as tens of thousands of successful franchise small business owners in Australia can attest.

Naeem Hashemi is a commercial and franchise lawyer with extensive experience including corporate and inhouse counsel roles in diverse industries from large franchise networks, media, leasing, property, retail and FMCG to technology, engineering and not-forprofits. A Director of DCS Lawyers, he heads up the legal team advising and supporting franchisors with all aspects of their commercial development including leasing, intellectual property protection, corporate structuring, dispute resolution, media and employment law and international master development for Australian companies and foreign networks entering Australia.

For over 30 years DC Strategy has been the region’s only end-to-end franchise consulting, law, recruitment, brand, marketing and technology firm. Their experienced multi-disciplinary teams have built over $2 billion in enterprise value for clients in the last decade alone, developing and supporting many of the most successful national franchise brands here and internationally. DCS manage the franchise commercial, legal and recruitment needs of a large number of networks providing specialist services including trademark, employment, migration, mediation and international recruitment assistance. www.dcstrategy.com

A Head Lease and a Licence to Occupy In many cases such as large shopping malls, the landlord often does not lease directly to a franchisee. Instead the franchisor takes the head lease and grants what is called a Licence to Occupy or Occupancy Agreement to the franchisee. This is like a sub-lease where you will be responsible for the bond or bank guarantee and pay the rent directly to the lessor. Take professional advice to ensure that you understand your rights and obligations.

“The landlord often does not lease directly to a franchisee.

Instead the franchisor takes the head lease and grants what is called a Licence to Occupy or Occupancy Agreement to the franchisee.”

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has exclusive ownership of the trade marks as these are the foundation of growing the brand and the value of your respective investments.

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Planning

for success

One of the main reasons many businesses, including franchises, fail is because they either do not undertake enough planning before they start, or they do not maintain a solid planningreview process as their business grows and matures.

It is vital for the survival of your franchise to take the time to develop your business plan.

Your business plan should outline your goals, your strategies, your prospects, and also the method by which you will achieve these.

Each business should have its own and unique plan. While it’s good (and often much easier) to work from a template, start out the right way by making sure that you

“Your business plan is your roadmap to success. It needs to be fluid and flexible, and it needs to be reviewed and revised at regular intervals throughout the business year.”

Ian Watt | Senior Business Development Manager - Franchising, NSW & ACT | retail & business banking, Westpac

delete any headings which do not specifically apply to your individual business. Don’t consider this as homework, but instead as a serious analysis of how your franchise business will work. Your plan will not only help you to test your ideas, but also to decide on strategies to reach your goals.

It’s all about quality. Your business plan doesn’t need to be as long as War and Peace.

In fact, the more concise and straight to the point it is, the better it’s likely to be.

A five–page document can be sufficient, if it’s five pages of solid content and strategy.

You do need to make sure that you cover all

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areas of your business and that your plan is manageable and contains enough flexibility to be revised as conditions which affect your business change.

Your plan should reflect your business life cycle - whether you are starting up, supporting a business-loan application or providing ongoing management. For example, a business plan prepared to accompany a bank-loan application should show the loan requirements, describe how the borrowed money will be used, list what collateral will be provided, and propose the repayment plan.

Suggested structure for your Business Plan • The Executive Summary: A summary of the highlights and main points of your plan. Write this last.

• About the Business: This section should include detail about the location you will be operating from; the history of the franchise systems; facilities and equipment you will be using; as well as the legal structure, set-up costs, funding, and insurances you will choose. This section paints a picture of your business and describes the legal entity and ownership structure, while also giving an overview of start-up costs and initial funding.

• Industry and Market Analysis: Here is where you describe the products or services you offer. Make sure you emphasise why buyers will purchase those things, and what benefits they will receive by doing so. Show how much it costs to deliver what you’re selling. You should also review current trends in the wider industry or sector, and assess your competition.

• Strategies: Here you need to document your overall mission strategy, objectives, and milestones. You can also include your marketing strategy, outlining any plans for advertising and promotions as well as a sales forecast and the cost of sales. It’s a good idea to detail your distribution method/s and plans for growth as well.

You should also describe the target market and segment you will be focusing on, including market demographics, market growth, trends and forecast. Finally, describe the nature of your industry and sector as well as your competition, and fine tune your milestones with dates, budgets, and specific responsibilities.

• Management Structure: Outline staff positions, costs, and facilities and also include an organisation chart. You should identify and describe the key members of your team, list management-team gaps (if any) and show how they will be addressed.

• Financials: The key element of this section is your financial plan and needs summary. Other components of this section should include sales forecasts, assumptions, annual income expenditure,

a profit-and-loss statement (P&L), a cash flow statement, and a balance sheet.

• Information Systems and Controls: This is a summary outlining the operational aspects of your business. Here you should define the systems, processes and controls which have (or will be) put in place. Also, identify any gaps and plans for the future.

• SWOT analysis: This helps you define your Strengths (for example, reputation, latest technology, good location), your Weaknesses (lack of experience; difficulty finding staff, high overheads), any Opportunities (local market growth, an unfilled niche in market, the possibility of a joint venture), and any Threats (a competitor opening up, over-reliance on one supplier, raw-material costs rising).

• Exit Strategy: Knowing how and when to exit your business is as important as knowing how to start it. Many owners build their business to sell when the time is right. If this is your strategy, make sure that you understand how to do this. There are many books available which explain the details; or you can speak with your accountant, solicitor, or bank.

YOUR PLAN

KEY INGREDIENTS 1. direction: a business plan should establish your company’s priorities. don’t try to do everything, and don’t try to please everybody.

2. Detail key milestones, with deadline dates, spending budgets and detailed tasks for each specific person responsible for them. this section must describe how these different milestones are going to be tracked and measured.

3. cashflow: different from profit and loss. profitable companies frequently go under, but companies with positive cash flow can pay their bills. your business plan should show monthby-month projected and actual cash flow month for at last 12 months.

Other considerations and water-cooler topics: - Share your business plan with your staff and summarise it into a one or two-page document. You need their commitment to help you get there!

- Share performance outcomes with your staff regularly. Highlight key successes and learnings, and pinpoint where results are not on track to focus everyone’s attention.

- Demonstrate key performance measures graphically; a picture really is worth a thousand words.

- Consider outsourcing and obtaining professional assistance during all stages of the planning process.

- Ensure the analysis is ‘non-emotive’, particularly in terms of what has been achieved to date and the successes and reasons for this. These reasons may not necessarily work into the future.

- Update your plan every quarter. Even if the final outcome is that there are no changes required, the discipline of holding quarterly planning-review meetings is important.

- Set key milestones which identify what you intend to achieve in set time periods.

For example, the first six months, second six months, second year, and so on.

- Business plans are as important for new companies as they are for established businesses which have been trading for ten years. Would you invest in a business that had no plan?

- Your business may require you to share the plan with shareholders and other stakeholders at monthly board meetings perhaps even prospective investors.

Ian Watt is the Senior Business Development Manager - Franchising, NSW & ACT at Westpac. He specialises in the franchise sector, working closely and assisting many franchise brands grow and maintain their network. He has a B.Bus and Diploma in Franchising as well as being a CPA. Westpac continues its long-term commitment to franchising in Australia through a national network of franchise specialist business bankers who are able to deal with the specific needs of the franchise sector.

Contact Ian at: ianwatt@westpac.com.au www.westpac.com.au

The information contained in this article is intended as a guide only and is not intended as an exhaustive list of matters to be considered. Persons entering into franchise agreements should seek their own independent legal, accounting and other advice.

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Your business plan is your roadmap to success. It needs to be fluid and flexible, and it needs to be reviewed and revised at regular intervals throughout the business year. If at any time you are forced to diverge from your strategy, your business plan will help you find your way back to more familiar ground.

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10 QUESTIONS TO ASK BEFORE BUYING A FRANCHISED BUSINESS Purchasing a franchise is often considered to be less risky than purchasing a business that is not part of a franchise system. This might be true, but no matter how profitable a business appears, there are many issues to consider prior to signing an agreement to buy a franchised business.

Below are 10 questions that a prospective franchisee should ask before buying a franchised business.

2. What documents do I need?

Before signing any documents (other than a confidentiality deed), you should obtain the necessary documents to enable you to understand the full implications of the purchase.

From the franchisor you must obtain the current franchise agreement and disclosure document. In addition, the Franchising Code of Conduct (“Code”) requires that the franchisor gives you the Information Statement mentioned above and a copy of the Code.

From the vendor of the business (if you are buying an existing business) or agent selling the business, you need to obtain

1. Where do I start?

Commence by arming yourself with resources to enable you to make an informed decision. Here are some freely available resources about franchising that are essential reading: • Information Statement prescribed by the Franchising Code of Conduct: www.accc.gov.au/system/files/ Information%20statement_0.pdf • The Franchisee Manual: www.accc. gov.au/publications/the-franchiseemanual.

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Now that you have the documents, read them!!

3. What other research should I do?

In addition, you should undertake your own research about the particular franchise system including: • the franchisor’s reputation in the market place;

“It is imperative that you understand the grounds upon which a franchise agreement can be terminated by a franchisor and ensure they comply with the Code.”

Louise Wolf | Senior Associate, Corporate Advisory and Franchising Team | MST Lawyers

you fully understand the implications of all the relevant documents before you do so.

6. I’ve tried reading the documents, but I don’t fully understand them. I think I need a lawyer and an accountant to help me. What should I ask them?

• the relationship between the franchisor and its franchisees; • the expansion plans of the franchisor, specifically whether the expansion plan includes setting up any other franchise system which could compete with or divert the franchisor’s attention from the system being considered; and

• any current or threatened legal proceedings against the franchisor.

4. What should I ask other franchisees?

Speak to other franchisees about the following: • how the actual costs of investment (set up costs) compare to any estimates originally provided by the franchisor; • the level of support offered by the franchisor to its franchisees, especially to franchisees that are located outside the state from which the franchisor’s head office operates; and • whether the franchisor is accessible, organised, responsive to queries as well as suggestions.

5. The agent is calling me.

Should I sign the contract of sale of business?

If you are purchasing an existing business, the vendor will ask you to sign the sale of business contract. Vendors and agents sometimes apply pressure to secure a quick sale. However, it is important that

Seeking the advice of a lawyer and an accountant who are experienced in franchising is the key to making an informed decision. The Code requires franchisors to obtain a statement from all franchisees that either they obtained the advice of a lawyer, accountant and/or business adviser, or they were advised to do so, but chose not to.

there may be an option to renew the agreement for a further term, subject to you complying with certain conditions, including payment of a renewal fee, refurbishment of premises and entering into the ‘then current’ franchise agreement which may be different from the franchise agreement you signed.

Territory

Some franchise agreements are limited to a particular site, some grant a territory.

A territory may be exclusive or nonexclusive. Some franchise agreements purport to have exclusive territories, but may actually only give exclusive rights to market in an area. In certain circumstances, exclusive territories can become non-exclusive.

Minimum Performance Criteria

Consequences of failure to meet minimum performance criteria typically include requirements to attend further training, after which there may be a right to appoint other franchisees to the territory, to force the franchisee to sell the business or to terminate the franchise agreement.

Termination

It is imperative that you understand the grounds upon which a franchise agreement can be terminated by a franchisor and ensure that they comply with the Code.

Franchisees can terminate a franchise agreement by exercising the cooling off right within seven days after signing the franchise agreement or paying money under the agreement. After the cooling off period, unless the franchise agreement provides a right of termination, usually the only way for a franchisee to exit prior to the end of the term is to sell the business or to obtain the agreement of the franchisor. Not only is the franchisor not obliged to agree to end a franchise agreement, the franchisor may be entitled to claim damages from you for the profit it would have otherwise made, such as via royalties, until the end of the term, or at least until they can find a replacement franchisee.

The balance of the questions in this article are questions you should ask your lawyer and/or accountant.

7. What are the most onerous aspects of a franchise agreement?

The franchise agreement is the most important document in the suite of documents as it will govern the legal relationship between the franchisor and the prospective franchisee for the term of the franchise. The obligations of both the franchisee and the franchisor should be read carefully. The following types of clauses can have onerous implication for the franchisee:

Payments under the Franchise Agreement, operating costs and unforeseen capital expenditure

Typically, fees are specified in a schedule at end of a franchise agreement. However, sometimes some fees are located inconspicuously within terms of the franchise agreement. Some franchise agreements provide that certain fees may be changed at the franchisor’s discretion.

Term and Renewal

After the term of the franchise agreement,

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a copy of the contract of sale of business and the existing lease of the premises (if relevant). In some States of Australia, a vendor of a small business is required to provide a disclosure statement about the business which includes information about the financial situation of the business, verified by an accountant. In Victoria, this applies to all businesses sold for $350,000 or less. Even if your purchase price exceeds this threshold, you should ask to see financial statements for the last three years for the business.

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“In order to make an informed decision, it is critical to read all the documents and undertake extensive research, ask questions of the franchisor and other franchisee.”

Restraints

Most franchise agreements provide for a period after the end of the franchise agreement during which the franchisee is restrained from being in any way involved in a competing business within a specified area from the territory or premises. The Code provides limited circumstances in which restraints will not be enforceable.

Franchisees need to be aware that in the absence of such circumstances, such restraints may be enforceable.

Unilateral Changes

Franchise agreements often give the franchisor the ability to change the agreement unilaterally in ways that may not be obvious at first glance. Look for the ability for the franchisor to change things such as menus, approved goods and services, standards, intellectual property and fees from time to time, or in accordance with the Operations Manual. These types of clauses enable the franchisor to make changes to the system that may ultimately require you to incur cost, either directly such as in the case of an increase in fees, or indirectly, such as in the case of a requirement to refurbish your premises or replace signage. You may be able to argue that the ability for the franchisor to make unilateral changes constitutes an unfair term.

Unfair Terms

The unfair terms legislation which came into effect on 12 November 2016 has given franchisees some leverage to negotiate with franchisors about terms in franchise agreements that may be unfair.

If a franchise agreement is presented on a ‘take it or leave it’ basis, it may meet the criteria for a standard form contract.

If so, and if either party has less than 20 employees and the upfront cost is less than $300,000 (or less than $1 million for a term longer than 12 months), there may be an argument that certain types of terms are unfair and should be changed.

For example, terms that enable one party (but not another) to terminate the agreement, terms that penalise one party (but not another) for breaching or terminating the agreement, and terms that enable one party (but not another) to vary the terms of the agreement.

You should seek legal advice about

such terms and, to the extent possible, negotiate fairer terms.

prospective franchisee should request traffic flow information in respect of the shopping centre and specifically, in the area near the proposed location.

10. What is the best business structure for me?

There are a number of different business structures which a franchisee can adopt.

A decision as to the business structure to be adopted by the franchisee needs to be made early on and certainly before signing the contract of sale of business or franchise agreement. Some of the reasons for adopting the correct structure right from the outset include, minimising personal risk, protecting personal assets and making the purchase and the subsequent sale of the franchised business more tax effective.

The possible structures which can be adopted include: sole trader; company; partnership; trust; or a combination of a company and a trust structure.

A prospective franchisee should bear in mind that each type of structure described above attracts different set up costs, on-going compliance costs, tax rates and personal risk.

Arranging for your lawyer and your accountant to speak with each other will assist in achieving the best outcome.

8. What about employees?

A prospective franchisee must be aware of the employment issues that will affect it (whether the franchisee is employing new employees or former employees of a vendor).

For example, the Fair Work Act 2009 (Cth) not only sets minimum terms and conditions of employment for employees, but also may impose onerous notification requirements upon purchasers, transferees or assignees of businesses. Breaches of these provisions in the Fair Work Act 2009 (Cth) may result in severe penalties.

If purchasing an existing business and taking on the Vendor’s employees, ensure you are clear about what employee entitlements, such as long service leave and sick leave, are being transferred to you under the contract as the new employer.

9. Is this the best location for this business?

If the proposed franchised business operates from a fixed location, due diligence in respect of the location will be necessary.

Understanding the lease and other related documents is critical to that process. If the franchisor is the tenant and licenses the premises to you, you may also need to review the license agreement. In addition, in a retail premises, there may be a disclosure statement given by the landlord.

Furthermore, careful consideration needs to be given to the particular area where the franchised business will be based, the demand for the goods and/or services offered by the franchised business within that area and any direct and indirect competition to the franchised business in that area both immediate and in the future.

Where the franchisor has selected the location, the prospective franchisee should request from the franchisor copies of its site selection policy, details of any demographic analysis performed in respect of the particular location. If the location is within a shopping centre, the

54 Business Franchise Australia and New Zealand

There are many things to consider before signing an agreement to purchase a business.

In order to make an informed decision, it is critical to read all the documents and undertake extensive research, ask questions of the franchisor and other franchisees and seek the advice of an experienced franchising lawyer and accountant.

Louise Wolf is a Senior Associate working within the Corporate Advisory and Franchising Team at MST Lawyers. Her main areas of expertise are franchising, intellectual property and privacy. She has acted for national and international clients providing advice and training in relation to franchising in Australia.

She has written the Australian Chapter of the International Franchising Handbook which provides information on franchising in almost 20 countries.

MST Lawyers has over 30 years’ experience in franchising, representing clients throughout Australia and internationally in a variety of industries.

Please contact the Corporate Advisory and Franchising Team for assistance or further information. +61 3 8540 0242 +61 3 8540 0200 www.mst.com.au