AUS & NZ Business Franchisor Jul - Oct 2017

Australian & new zealand

Franchisor B u s i n e s s

VOL 05 ISSUE 04, 2017

FUEL THE SUCCESS

OF YOUR FRANCHISES WITH SHELL CARD

NFC17 Failing to plan is planning to fail

BUSINESSFRANCHISOR 1

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2/06/2017 12:04 PM

Australian & new zealand BUSINESS FRANCHISOR VOLUME 5 ISSUE 4 CGB Publishing Pty Ltd TEL: 03 9787 8077 (AUS) FAX: 03 9787 8499 (AUS) publisher: Colin Bradbury colin@cgbpublishing.com EDITOR: Joanne Tuffy editor@cgbpublishing.com.au SALES DIRECTOR: Vikki Bradbury

Franchisor B u s i n e s s

from the

Editor

vikki@cgbpublishing.com

Kathleen Lennox

This edition of Business Franchisor is packed with advice from experts across the franchising industry.

kathleen@cgbpublishing.com.au

Are you recruiting staff at the moment? Job interviews are becoming easier to bluff these

SALES and marketing manager:

days as hiring and HR managers try to standardise the hiring process. Saxon Marsden-Huggins PUBLISHER’S ASSISTANT:

from Recruit Shop has collated a list of questions, from the basic ‘What are your strengths’

Jorgia Rice

through to ‘Why is there fuzz on a tennis ball!’ If you’d like to refresh your interview process, read Saxon’s guide to the Essential Interview Questions on page 10.

PRODUCTION: production@cgbpublishing.com.au ACCOUNTS: accounts@cgbpublishing.com.au

Also, Ben Scull from the tax and accounting firm Thomson Reuters advises how to prepare for changes being incorporated by the ATO regarding transparency. If this is of interest, turn to page 18 for more.

Our cover showcases Viva Energy. For franchisees, overseeing fuel expenses can be timeconsuming and costly. Shell Card is packed with benefits and helps franchisees with their

GRAPHIC DESIGN:

fuel management. Read more on page 6. Viva Energy were also the Welcome Reception

Jejak Graphics (03) 5977 8804

Sponsor at last year’s National Franchise Convention. Always popular, book your tickets and

jejak@bigpond.com

accommodation for this years’ NFC17 via www.nationalfranchiseconvention.org.au. This year will see keynote speakers sharing their inspiration and expertise along with the many round-

ON THE COVER: VIVA ENERGY

table sessions scheduled to run.

As always, there’s all this and much more, we hope you enjoy the read.

TO SUBSCRIBE:

Joanne Tuffy

PLEASE CONTACT

Editor

CGB PUBLISHING PO BOX 968 MT ELIZA, VICTORIA 3930 Email: cgb@cgbpublishing.com.au www.businessfranchiseaustralia.com.au

SUPPLIER FORUM

The information and contents in this publication are believed by the publisher to be true, correct and accurate but no independent investigation has been undertaken. Accordingly the publisher does not represent or warrant that the information and contents are true, correct or accurate and recommends that each reader seek appropriate professional advice, guidance and direction before acting or relying on all information contained herein. Opinions expressed in the articles contained in this publication are not necessarily those of the publisher. The publication is sold subject to the terms and conditions that it shall not be copied in whole or part, resold, hired out, without the express permission of the publisher.

Franchisor B u s i n e s s

8

volume 5, issue 4, 2017

10

CONTENTS

18

On the Cover

ALSO IN THIS ISSUE

6

Cover Story: Fuel the Success of your Franchises with Shell Card

IFC

The Energy Alliance

Viva Energy

4

News items:

Announcements from the industry

56

NFC17: National Franchise Convention

64

Failing to Plan is Planning to Fail

8

Update from the Franchise Council of Australia

16

Profile: Budget One

24

Service Close-Up: The Energy Alliance

36

Profile: Workplace Assured

48

Profile: Franchising Expo

67

A-Z Directory

Peter Buckingham, Spectrum Analysis

IBC Jejak Graphics OBC Walker Wayland (WA)

32 2 BUSINESSFRANCHISOR

22

22

34

44

Expert Advice 10

Recruiting Staff? Your essential interview questions

Saxon Marsden Huggins, Recruit Shop

14

How do you Prove your Organisation’s Success?

Stacey Barr

18

How to Prepare For ‘Justified Trust’

Ben Scull, Thomson Reuters

20

Why you should invest in the things you can’t see

David O’Rourke, Nightlife Music

22

When an Australian Grown Product Doesn’t Count as an Australian Ingredient

Charles Fisher, FOODLEGAL

26

Why Customer Experience Management Matters

Vicky Katsabaris, Qualtrics

28

Accelerate 2017 Growth with mindful A-D-E

Chris Urry, IntegraPay

32

Manage Risk when dealing with key APAC Countries

Mark Hoppe, Atradius

34

2017 Marketing Trends to keep SMEs Ahead of the Pack

54 38

60

Could your Franchise be the Next Headline?

Bruce Drewett, ADP

40

The Centrality of Culture

Barbara West, Culture Works

44

The Reporting and Accountability Process to Revolutionise your Team

Matt Malouf

46

Battle Strategy: Innovate the way you work

Paul Broadfoot

50

Unlocking Growth through Effective Local Area Marketing

Adrian Richards, The Station Agency

54

Why Sharing Stories can build Customer Loyalty

Gabrielle Dolan

58

Utilising the Latest Technology to reduce Franchise Overheads

Ross Clayton, Vast Furniture

60

Customer Loyalty Programs and Fringe Benefit Tax

Rami Brass, RSM Australia

62

Five Pointers for Content Marketing at the Franchisee level Gloria Kopp

Matt Daunt, The Certainty Principle

BUSINESSFRANCHISOR 3

business franchisor

NEWSitems Customers Feeling Ignored Online

RFG MAKE STATEMENT REGARDING SHARE TRADING Retail Food Group Limited (RFG or the Company) had to make a statement recently following trading of their shares well in excess of normal volumes, accompanied by a share price retraction c.11.3% over the course of one day.

Picked up by the media, two UBS Reports referenced the release of a new accounting standard effective for the Company from 1 July 2019 (IFRS 16 Leases), RFG advised “The UBS Reports make broad unsubstantiated assumptions as to the impact of same on the Company. As well, the UBS Reports incorporate a share price target downgrade, from $5.70 to $4.70, predicated solely upon the introduction of IFRS 16 Leases in FY20.

“Beyond the limited information disclosed therein, RFG has little insight into the basis upon which the UBS Reports were prepared. Indeed, at no stage prior to publication of the UBS Reports did UBS consult with or seek engagement with the Company regarding the matters outlined in the UBS Reports. Significantly, UBS would have no insight into the Company’s position in respect of the impact (if any) of IFRS 16 Leases, nor that of its bankers.

“RFG continues to assess the extent of any future impact of the new accounting standard with its external accounting advisors and auditors, and will disclose this assessment as required in the notes to the Company’s statutory financial statements (as it has done historically so far as other prospective accounting standards were or are concerned).

“Having regard to the matters outlined above, RFG considers that any assumptions as to the potential impact of IFRS 16 Leases on the Company’s financial statements, lending covenants or other debt arrangements is both premature, precipitous and with respect, an exercise in speculative guesswork. Importantly, there has been no change to RFG’s business model or underlying cash flows, and RFG’s lenders are aware of the impending accounting changes which will arise on introduction of IFRS 16 Leases, from 1 July 2019.

“The Company continues to enjoy a strong relationship with its lenders, who are well aware of the leasing structures which have been employed by the Group since listing in 2006, and have expressed no concern in respect of the same.”

4 BUSINESSFRANCHISOR

Delivering the best customer experience is crucial to the success of online retailers, and by optimising what matters most to customers, online retailers can deliver superior experiences. However, according to new research by experience management company Qualtrics, many online shoppers believe their feedback never reaches someone who can enact change.

In the global research study, Qualtrics surveyed 1,700 online shoppers.

Customers believe their online shopping feedback is overlooked 40 per cent of the time, regardless of where they make their complaints. Online shoppers have high expectations for prompt replies, with 82 per cent of online shoppers expecting a response within a few days.

The research also found that for 61 per cent of shoppers, their expectations about online retailers are set through social media or referrals from family and friends.

Vicky Katsabaris, CX principal consultant at Qualtrics, said “Retailers must ensure they are continually collecting, analysing, and acting on feedback given by online shoppers. Feedback will not only identify potential areas for business growth and further success but will also highlight areas for improvement. Retailers may amplify a shopper’s negative experience if they fail to act on feedback and risk unnecessarily losing customers without an opportunity to regain their loyalty.

“By seeking the feedback of your customers and, importantly, acting on that feedback you can establish greater brand loyalty. You are more likely to optimise your brand’s image when customers feel valued, heard and understood.

“Businesses should continually review the customer experiences they are delivering as there are always improvements to be made, which can improve your position in the eyes of consumers. Retailers’ ability to collect, analyse, and act on feedback in real-time is an essential element in successfully closing the customer experience gap. Doing this across all customer touchpoints and moments that matter will deliver the greatest benefits.”

Thanks Australia!

CALL OUT TO SHARE WHAT YOU CAN SPARE Leading Australian medi-aesthetic company Australian Skin Clinics has found a new use for its medical scrubs and supplies – sending them to Africa to help save the lives of women in need.

With one in 100 women in Madagascar dying during childbirth due to the lack of adequate medical standards and equipment, Australian Skin Clinics is rallying the beauty and medi-aesthetics industry together to help provide supplies for this worthy cause.

Working together with the not-for-profit organisation Australian Doctors for Africa (ADFA), Australian Skin Clinics Managing Director, Deb FarnworthWood, said she didn’t hesitate to donate supplies that her clinics use every day when she learnt that those same products could save a woman’s life.

“It’s hard to imagine when we have ample supplies of medical scrubs at our clinics, that there are women out there that don’t survive child birth due to the lack of such essential equipment. At Australian Skin Clinics, we put enormous emphasis on the importance of cleanliness and hygiene, so it seemed only right that we continue that philosophy and practice beyond the clinics themselves and help as many women as possible to enjoy safe and appropriate medical treatment,” Ms Farnworth-Wood said.

Lack of sterile garments in Madagascan hospitals is one of the key issues that lead to problems after childbirth.

While basic healthcare is provided for free, the patients themselves must pay for the required supplies such as bed sheets, dressings and food.

“Working within the medical space, we believe that every woman should be treated with the highest standard of care,” Ms Farnworth-Wood said, “and we hope our contribution will allow these women to feel self-respect and dignity when giving birth.

“We are calling on anyone in the medi-aesthetic, beauty or medical space to share what they can spare – scrubs, sterile equipment and basic medical supplies will go a long way in helping to prevent complications during childbirth.”

Scrub and medical supplier Medeleq has already pledged its support, but Ms Farnworth-Wood said they still need many more companies to come on board. For information on how to donate, please email info@ozskin.com.

13,500 Printer Cartridges Recycled Every Working Day Australians have made history this year by recycling a record 13,500 printer cartridges every working day, making it the biggest year ever since the launch of the ‘Cartridges 4 Planet Ark’ program.

In total, over 3.5 million cartridges were returned for recycling, which is equivalent to 6 backyard swimming pools every week!

Ryan Collins, Recycling Programs Manager at Planet Ark, says a key factor in this success is the willingness to participate the scheme, which ensures responsible management of environmental impact. Collectively, the participating cartridge manufacturers Brother, Canon, Epson, HP, Konica Minolta and Kyocera have helped Australians recycle 34 million cartridges since 2003.

“Working within a closed loop or circular process, like the ‘Cartridges 4 Planet Ark’ program, which allows us to recover and reuse valuable materials and keep them circulating, is essential. It doesn’t make good business sense to send useful and valuable materials to landfill, when they can be salvaged and directed back into the economy. We’re particularly proud of the fact that the program has consistently achieved zero waste to landfill every year,” Collins said.

Printer cartridges can take 1,000 years to break down, and e-waste is the fastest-growing form of waste. Rapid innovation, decrease in product lifespan and declining prices have led to more and more items being discarded. So it’s vital, for the environment and a viable manufacturing industry, that the concept of a closed loop production cycle is embraced.

Overall, Australian consumers are supportive of responsible waste management and recycling. In a recent study, 82 per cent of participants stated that they will recycle even if it takes more effort.

For more information or to get involved visit www.cartridges.planetark.org or call 1300 763 768.

BUSINESSFRANCHISOR 5

COVER STORY

FUEL THE SUCCESS OF YOUR FRANCHISES WITH SHELL CARD

A SMARTER WAY TO FUEL YOUR FRANCHISEES As the exclusive licensee of Shell here in Australia, Viva Energy are dedicated to providing a smarter way for businesses to fuel their operations. Shell Card is a big part of that mission, and is an ideal way to streamline fuel management for your franchisees.

Shell Card provides your franchisees with a secure and efficient way to buy Shell’s high quality fuels. It’s accepted across a rapidly growing network of Shell-branded and thirdparty locations, including Coles Express sites and participating Liberty service stations.

And it’s backed by all the benefits of a company that can draw upon over 110 years of local experience.

Fuel expenses are always a concern for business owners.

For franchisees in particular, the ongoing headache of overseeing those expenses can be time-consuming and costly. What if franchisors could offer them a better way to manage their expenditure, saving them time and money on their fuel needs?

observation always holds true: the more time

People become franchisees for any number of reasons. It might be a lifestyle choice, or a chance to establish a good living with the support of a trusted brand. One thing nobody signs up for is the paperwork! Yet for many franchisees, keeping up with the bookkeeping can soon become overwhelming.

If you’re a head office, your franchises need to

Because when it comes to business, one

better.

6 BUSINESSFRANCHISOR

that is spent on administration, the less time is spent making money. It’s a genuine issue that can hamper the true profit potential of any franchise.

SIMPLE PAYS DIVIDENDS This is especially true when it comes to managing fuel expenses. Consider the following: fluctuating prices, lost receipts, multiple vehicles, complicated calculations, even wastage. It’s a far from straightforward set of factors to take into account when it comes to budgeting, and especially when tax time comes around. run at their optimum. The more efficient the management of the essentials is, the easier it is to account for everything and the smoother things can operate. And when it comes to the transportation of people, goods and services for your franchisees, the simpler things are, the

BENEFITS BEYOND THE BOWSER Besides its on-the-road convenience, Shell Card can especially help when it comes to the bottom line. By introducing Shell Card to your franchisees, you’ll be helping them cut out timewasting claim procedures. They won’t have to reconcile months of credit card statements and receipts when EOFY rolls around, for instance.

Instead, simple online tools will enable them to access past invoices, consolidate their statements, and generate detailed transaction reports for tax purposes. It’s a super effective approach that streamlines fuel management, and reduces the paperwork and stress that many time-poor franchisees can get bogged down by.

With Shell Card, franchisees can monitor fuel purchases 24/7, and get advanced insights into all aspects of their businesses fuel usage.

It’s also secure, with advanced security and fraud prevention technologies. Smart Alert notifications can be set up to email business owners of any usage outside of approved

With Shell Card, franchisees can monitor fuel purchases 24/7, and get advanced insights into all aspects of their businesses fuel usage.� parameters. Plus, each card is protected by an individual PIN, and in the event of loss or theft, can be easily suspended or cancelled.

ONE SIMPLE SOLUTION FOR FUEL MANAGEMENT Shell Card is a simple, effective and convenient product that really can save businesses a lot of headaches in paperwork and at the pump.

Viva Energy also offers great deals for groups, meaning that as a Head Office decision maker or franchisor, you can leverage your buying

power to enable discounts for your network that individual franchisees would not be able to access.

To learn more about how Shell Card can help your franchisees manage their fuel usage, visit:

So with more businesses closely monitoring their fuel costs and usage than ever, the time is now to discover how Shell Card can work for you, and free your franchisees to spend more time focused on the things that matter.

vivaenergy.com.au/shellcard/businessfranchise

Or, contact Shakeeb from Viva Energy on 03 8823 4897, to discuss a customised solution for your franchisees that will better fuel their success.

SHELL CARD

IS THE SMARTER WAY TO FUEL YOUR BUSINESS Packed with benefits, Shell Card is an easy way to help franchisees simplify their fuel management.

Save Time

Great Value

Earn Rewards

Fast Growing Network

Simplify tax preparation and remove the need to collect data and enter multiple receipts.

Earn flybuys points at any Shell Coles Express site.

High Quality Fuel

Backed by more than 100 years of Shell fuel expertise.

Low monthly card fees and flexible payment options including credit card.

Accepted at over 1000 convenient locations Australia-wide.

Fraud Protection

Individual card PINs and fraud alerts to notify of unusual transaction types, locations or amounts.

Free up your franchisees to spend more time focused on the things that matter. With Shell Card, franchisees can reduce paperwork and get advanced insights into all aspects of their businesses fuel usage.

Call 03 8823 4897 or visit vivaenergy.com.au/shellcard/businessfranchise to discover how.

BUSINESSFRANCHISOR 7

FCA

8 BUSINESSFRANCHISOR

The Franchise Council of Australia

supporting a vibrant and valuable sector As the nation’s peak body for franchising, the Franchise Council of Australia (FCA) is a valuable resource for this vibrant and valuable sector, offering support and guidance to franchisors, franchisees and service providers.

This include activities such as the FCA’s representation and advocacy to governments and stakeholders on behalf of the sector, and providing members with access to resources to assist in meeting their regulatory obligations.

FCA members also have the ability to attend the FCA’s educational and networking events, including the annual National Franchise Convention, at member rates.

National Franchise Convention The National Franchise Convention 2017 will be a fantastic event for networking, creating pathways for collaboration and knowledge sharing. The event will provide a range of informal networking opportunities across the three-day program.

Tickets are available to purchase at nationalfranchiseconvention.org.au, and already it is shaping up to be a fantastic event. This year, the event will take place in the Gold Coast from 8–10 October, and it will include the thought-provoking theme, ‘Franchise Intelligence – building a smarter future’.

The program was developed with the support

of franchisors and service providers in the sector to create forward-looking topics, and to help franchising systems identify the key developments in leadership, technology and other operational needs that will propel your business forward. This is an unrivalled opportunity for attendees to build their knowledge about key franchising topics, but also for franchises to share their success stories and learnings with members of the franchise community.

The most important conversations are the ones that occur in a social environment and are characterised by honesty, generosity and candour, and we have once again structured the program to create plenty of those opportunities.

We are proud to continue to showcase the success of franchising in Australia, with the prestigious MYOB FCA Excellence in Franchising Awards concluding the conference. Join us in this thought-provoking, inspiring, big and ultimately invaluable Australian franchising event: the National Franchise Convention 2017.

FCA HR Help Desk The FCA recognises its members face a wide range of HR and employment law compliance challenges, and the importance of obtaining the right advice to ensure any such issues are addressed in a timely manner, and most importantly, to ensure that franchisees and franchisors meet their compliance requirements.

With this in mind, the FCA and its partner HR Central, the HR specialists for the franchising sector, are proud to offer our members a unique and specialised HR Help Desk service to ensure members obtain the best advice regarding

compliance and best practice around all things HR. “HR Central is proud to be extending our partnership with FCA. FCA members will now have access to a free, dedicated FCA HR Help Desk supported by an expert team of HR Specialists. The service will provide guidelines and advice around HR issues that occur in the franchise business world. HR Central acknowledges the continuous contribution that the FCA make in support of its members, and believes that this new service will strengthen bonds between the FCA, members and external support parties, such as HR Central,” said Damien Gooden, CEO of HR Central.

The FCA HR Central Help Desk provides members with exclusive access to the FCA HR Central’s free dedicated Help Desk and speak to a HR Specialist who will assess your situation and provide you with a personalised solution for your business, with no charge for the phone call, or advice/guidelines given by the specialist.

If required, a further appointment and/or proposal can be arranged with the consultant, and any fees for these services will be outlined to the member so they can make an informed decision of whether to proceed with obtaining more detailed advice.

The HR Help Desk can provide support on matters including, but not limited to: hiring and managing staff; assistance with mitigation of risk/loss of earnings; and ensuring compliance requirements are met. To contact the HR Help Desk, please call 1300 032 247 (13000 FCA HR) within office hours. www.franchise.org.au

BUSINESSFRANCHISOR 9

Saxon Marsden-Huggins

Recruiting staff?

Your essential interview questions Job interviews are getting easier to bluff. Questions are becoming more common, as hiring managers try to standardise the hiring process. But the more common interview questions are, the easier it is for someone to prepare an answer.

That’s why you need to ask a mix of basic and challenging interview questions. Asking a variety of these questions will allow candidates to show their true colours. Any question that hasn’t been asked before can be seen as a ‘challenging question’. Here are some examples of basic and challenging questions for you to ask in your next interview.

10 BUSINESSFRANCHISOR

Basic Interview Questions

q Do you have any questions for me?

q Tell me about yourself.

q What’s your ideal company?

q What are your strengths?

Behavioural Interview Questions

q What are your weaknesses? q Why do you want this role? q Why should we hire you? q What did you like least about your last role? q When were you most satisfied in your role? q What can you do for us that other candidates can’t? q What were the responsibilities of your last role? q Why are you leaving your current role? q What do you know about this industry? q What do you know about our company? q Are you willing to relocate?

q What, in your opinion, are the key ingredients in guiding and maintaining successful business relationships? Give an example of how you have made this work for you. q Tell us about a time when you built rapport quickly with a new or existing business relationship under difficult conditions. q Describe a situation when you were able to strengthen a relationship by communicating effectively. What made your communication effective? q Describe a situation where you felt you had not communicated well. How did you correct the situation?

q Describe a situation in which you were able to positively influence the actions of others in a desired direction.

Frustrated by the lack of an effective, value-for-money recruitment alternative for small business, Saxon founded Recruit Shop in 2010 to help make professional recruitment services affordable for all businesses in Australia and New Zealand.

q How do you schedule and manage your time? What processes have you put in place to help manage time?

Saxon is a MBA graduate of UQ and member of the Entrepreneurs Organisation based in Sydney.

q Tell us about a time you had to manage a high volume of work. What processes did you put in place to help manage your workflow? q Do you prefer working with detail or are you a big picture person? What’s more important - getting the job done right or getting it out on time to meet the deadline? q How would you describe your work style? i.e. do you prefer to work alone or with others; are you big picture or process/detail orientated; are you structured in your daily routine, use lists etc or do you work in a more ad hoc fashion and how does that work for you? q Give me an example of an important goal you have set and explain how you achieved it. q Tell me about a job/task that was boring.

How did you deal with it?

q Tell me about a time you had to change procedures to solve a problem. What did you do? q Give me an example of a time you had to make a decision without consulting your boss. What did you do?

Motivation, Attitude & Career Direction Interview Questions q What are you looking for in terms of career

you additional training or exposure, what would they suggest? q What appeals to you about this role? How does this role fit in with your goals and life aspirations? q What sort of working environment appeals to you? i.e. working alone, as part of a team, quiet or noisy office q Where do you see yourself in five years time?

development? q How do you want to improve yourself in the next year? q If I were to ask your last manager to provide

Salary Interview Questions q What salary are you currently on? q What salary are you seeking?

BUSINESSFRANCHISOR 11

Getting Started Interview Questions q How would you go about establishing your credibility quickly with the team? q How long will it take for you to make a significant contribution? q What do you see yourself doing within the first 30 days of this role? q If selected for this position, can you describe your strategy for the first 90 days?

More About You Interview Questions q What do you look for in terms of culture — structured or entrepreneurial?

q What do you ultimately want to become?

q What do you do in your spare time?

q What are three positive things your last manager would say about you?

q What is your favourite memory from childhood?

q What negative thing would your last manager say about you? q What three character traits would your friends use to describe you? q If you were interviewing someone for this position, what traits would you look for? q List five words that describe your character.

Brainteaser Interview Questions q How many times do a clock’s hands overlap in a day? q How would you weigh a plane without scales?

q What is your biggest regret and why?

q Tell me 10 ways to use a pencil other than writing.

q What’s the most important thing you learned in school?

q Sell me this pencil.

q Why did you choose your particular degree?

q If you were an animal, which one would you want to be?

q What techniques and tools do you use to keep yourself organised?

q What will you miss about your present/last role?

q Why is there fuzz on a tennis ball?

q Tell me about your proudest achievement. q Who was your favourite manager and why?

q What is your greatest achievement outside of work?

q What do you think of your previous manager?

q What are the qualities of a good leader? A bad leader?

q Was there a person in your career who really made a difference?

q How do you feel about taking no for an answer?

q What kind of personality do you work best with and why?

q What’s the best movie you’ve seen in the last year?

q What are you most proud of?

q What would you do if you won the lottery?

q What do you like to do?

q Who do you admire and why?

q What are your lifelong dreams?

q What do you like to do for fun?

12 BUSINESSFRANCHISOR

q If you could choose one superhero power, what would it be and why? q With your eyes closed, tell me step-by-step how to tie my shoes.

Recruit Shop is Australia and New Zealand’s best priced recruitment agency for small businesses and franchises. Their expert consultants work across all roles and industries, delivering high-quality services for a low cost, flat rate fee.

02 8074 7350 saxonmh@recruitshop.com.au

Business Franchisor Australia & New Zealand is part of the global network of CGB Publishing

With over 30 years’ experience in providing high quality business information, with a particularly strong focus on franchising, our global presence allows opportunity for international franchise marketing solutions.

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BUSINESSFRAN CHISOR 1

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Stacey Barr

How do you prove your organisation’s success?

Steve Robbins, the Get-ItDone Guy from the Quick and Dirty Tips podcasts, says that the ultimate responsibility that rests solely on the CEO’s shoulders is the success or failure of the organisation.

And the CEO’s top two duties, which only they can perform, are building the culture and setting strategic direction.

Building culture and setting strategic direction are the two most important drivers for organisational success. That’s not a surprise to most CEOs. And measuring the right things is the key to proving organisational success.

Also, not a surprise to most CEOs. But what is a surprise to most CEOs is that measuring the right things gives transformational leverage to building the right culture and setting a strategic direction that gets executed.

This means that CEOs can’t be just masters of

Mastering the habit of Direction requires

culture and strategy. They must be masters of

the adoption of three specific mindsets:

evidence-based leadership.

• The first mindset is that strategic goals

Evidence-based leadership brings culture, strategy and measurement together

the strategic direction is a simply a list of initiatives or projects or things to get done, then people confuse completion for success.

When we are practising evidence-based

But there is little point in getting stuff done if

leadership, we are:

we’re not aiming that effort at the results we

• using objective evidence to design and

want to achieve.

monitor the organisation’s strategy; • inspiring and encouraging and expecting evidence-based management from everyone in the organisation; and • making it easier for everyone to practise it and apply it to what matters most.

There are three evidence-based leadership habits of high performance that only c-suite executives can do. No-one else in the organisation can do them. And they must master these habits. They must personally practise them, and by practising them routinely they become role models that everyone else within their organisation will follow. These

Measuring performance is like gravity

habits are called Direction, Evidence and

Measuring things – using metrics, KPIs, whatever you call them - pulls our attention and action toward a centre, toward the most important things we should focus on and improve. When we measure the important performance results, we move more directly toward those results and we achieve them sooner and with less effort. Measurement is fundamental to proving an organisation’s success, but also to improving it too.

The first habit of evidencebased leadership: Direction

14 BUSINESSFRANCHISOR

are results-oriented, not action-oriented. If

• The second mindset is that strategic goals are expressed in language everyone will understand. One of the worst problems with strategy is the excessive use of ‘weasely’ language: ‘efficiency’, ‘capacity’, ‘diversity’, ‘quality’, ‘fit for purpose’, ‘productivity’, ‘sustainability’. People can’t buy into what they don’t understand.

• The third mindset is that strategic goals are ruthlessly prioritised to focus on performance results that matter most, right now. In The 4 Disciplines of Execution, Sean Covey, et al., explain how achieving strategic goals on top of day-to-day work follows the law of diminishing returns. The more goals we have, the less we achieve.

Execution.

second habit: Evidence Evidence is about setting meaningful performance measures for each strategic goal,

The habit of Direction means articulating a

that are quantitative, aligned to what matters

well-designed strategy that is results-oriented,

and focused on improvement. Nothing is more

understandable to everyone, and ruthlessly

urgent than measuring what matters. Most

prioritised. Too often strategy is thrown

other things higher on the to-do list, like fixing

together without a deliberate approach or

problems, reacting to other people’s priorities

enough analysis and thought. It sits on the shelf

and catching up on overdue milestones, are the

and gathers dust and cynicism.

product of not measuring what matters!

At least 90 per cent of performance problems are in the processes of the business, not in the people”

The three most important mindsets for the habit of Evidence are these: Stacey Barr is one of the world’s leading specialists in business performance measurement and KPIs. She is known for her practicality in solving the most common struggles with measuring what matters. Her new book Prove It! How to create a high-performance culture and measurable success is available in stores now.

• The first mindset is to use evidence to learn like a scientist learns, without judgement. When measures are tools in people’s hands, not rods for their backs, people feel an intrinsic motivation for using KPIs to improve business performance, and it’s easier for them to feel and be accountable for the right things.

• The second mindset is to design measures as quantifications of the observable results of strategic goals. Measures aren’t actions or milestones or trivial counts. They are quantifications of objective evidence of the degree to which performance results are occurring over time.

• The third mindset is to measure only what can be aligned to the priorit ies: mission, vision and strategic goals. A clear and measurable mission and vision is the starting point, the inspiration, for aligning the entire organisation’s measurement and execution of the strategy.

third Habit: Execution Execution is about implementing the corporate strategy and achieving the strategic goals using the leverage found in the continuous improvement of business processes. It’s about implementing change initiatives that can take a big bite out of our performance gaps, closing as much of the gap between current performance and targeted performance as possible.

These are the three most important mindsets for the habit of Execution: • Implement or execute strategy based on working smarter, not harder. To improve performance, to increase our business’s capacity for excellence, requires leverage.

If an improvement can only be sustained by continually putting in more effort, we didn’t find the leverage.

• Make strategy execution about removing and managing variability, not about hitting the numbers. We can only understand performance by understanding the patterns of variability in performance.

Averages only tell a static story, like a photograph; but variability shows a movie.

It’s the patterns we need to look for, not the points.

• Execute strategy to improve business processes and how work is designed, not to control people and what work is done. At least 90 per cent of performance

problems are in the processes of the business, not in the people. So we must master the measurement of processes, and their outputs and outcomes.

There are no short cuts The people in an organisation will not practise evidence-based management without it being deliberately led from the top. What the c-suite talks about and does, the rest of the organisation talks about and does. Evidencebased leaders routinely talk about: • the purpose of the organisation; • the evidence that the purpose is being fulfilled; and • what that evidence says about how well that’s happening.

There are no short cuts. If we want highperformance organisations, we have to be evidence-based leaders, every single day.

For more, visit www.staceybarr.com.

BUSINESSFRANCHISOR 15

budget one

FRANCHISING DOESN’T HAVE TO BE A BALANCING ACT Striking a balance between attracting new franchisees while supporting longstanding ones can be tricky.

But if you create a franchise system that cultivates entrepreneurship and innovation at the franchisee level, then business growth success will thrive.

As a franchisor, you will know that each franchisee comes with their own set of competencies and when cracks appear, it can have an adverse effect not only on their own business, but indirectly on the whole of the franchised chain and its other franchisees.

Budget One has created a clever franchising support program that simplifies the franchisorfranchisee relationship, providing franchisees with much needed business planning tools, strategies and mentoring to drive business growth success.

Recognising that the range of support services required is dependent upon the different stages of franchising, Budget One has created a twostep model: Start-Up Success and Business Success, each designed to complement the other.

New franchisees begin with the Start Up Success program and equipped with a robust roadmap and personalised tools to successfully navigate their way through the first 12 months.

the model underpins their system to strengthen the franchise brand, protect its market share, as well as improve franchisee confidence and satisfaction. Franchisors want to focus on building and growing their business, rather than dealing with turn-over complications. Our program provides a support bridge between the franchisor and franchisee.”

Darren Schultz, Director of Stellarossa, has incorporated Budget One’s Start-Up Success and Business Success programs in order to further improve the value of the franchise model experience and to extend and defend its market share within a highly competitive industry.

Darren believes that “Stellarossa franchisees feel they have more confidence and less business risk” after implementing the Budget One programs.

“New franchisees gain a clear understanding of the capital required to not just buy a franchise location, but also get a road map and cash flow forecast so they know what is needed operationally as well as monthly cash levels to cover their new business in first 12 months.

“We now have a fast-track operating model,” he explains, “and best of all, new franchisees have regular support and mentoring throughout the first 12 months, so they don’t feel alone and vulnerable.”

As franchisees start to gain momentum, they transition smoothly onto the Business Success program, which aids them to maintain the results they are achieving, as well as provide them with confidence to accelerate their growth.

Julie Murdy, a Stellarossa franchisee, has found she is happier and less stressed. “With my business growth road map, financial management dashboard, and one-on-one meetings, I have the tools and guidance to help make better decisions. Taso shows me where I am performing well and where I need to improve and early warnings allow me to correct, excel and succeed.”

Taso Tounis, Director from Budget One explains, “Franchisors are excited about this program as

To consolidate Xpresso Mobile Café’s 60 per cent growth during 2015 and 2016, Managing

16 BUSINESSFRANCHISOR

Director Jonathan Payne wanted to boost his award-winning franchise system to attract and maintain happy franchisees and has also incorporated Budget One’s programs into the franchise model.

“By building in Budget One’s Start-Up Success and Business Success programs into our model, our franchisees have a dedicated business planning expert available to mentor and help them avoid making mistakes and minimise the many pitfalls of business ownership to find success sooner,” Jonathan says.

And it seems ‘franchisee success’ is what is attracting the big franchise players like Jim’s Financial Services. Divisional Manager, Tony Gale from Jim’s Financial Services believes “Our brand is quintessential with small business success and longevity. Budget One’s Start Up Success program reinforces this philosophy.

While many other lending institutions typically end their support services after granting funding, Jim ‘s Financial Services now has a unique selling point and our entrepreneurs can benefit from on-going business growth and advisory mentoring services.”

Taso Tounis founded Budget One in 2011 after decades of working in corporate finance. His goal: to let you KNOW what’s preventing achievement and DECIDE strategies to move towards SUCCESS, is what makes Budget One the leading business planning, cash flow management and budgeting specialists in Australia.

If you would like to expand your market share and remain ahead of your competitors, contact Taso on 0429 142 413 to find out more about the range of support services that Budget One can offer your franchise. www.budgetone.com.au

GROW YOUR FRANCHISE SYSTEM FRANCHISOR BENEFITS Protect your market share Strengthen your brand Increase franchise system value Reduce franchisee risk Lower franchisee management Independent advisory services

know - decide - succeed

We balance attracting new franchisees while supporting long-standing ones Strengthen the long term prosperity of your franchise with our unique Start Up Success and Business Success programme.

Create an atmosphere for success and growth

FRANCHISEE BENEFITS Confident business decisions based on sound financials

know - decide - succeed

Clarity & direction with a robust business plan Clear visibility with management dashboards

know - decide - succeed

Keep focused & on-track with regular fuel stops

HAPPY CLIENTS

See our success stories on our website

www.budgetone.com.au To learn more about our franchising programmes, call Taso on 0429 142 413

Ben Scull

How to prepare for

‘justified trust’ New tax regulations will require large Australian businesses to become more transparent than ever when it comes to tax.

Australian franchisors will also be affected by these changes.

The Australian Taxation Office (ATO) is looking to give the Australian public increased confidence in the corporate tax system. Consequently, the ATO will demand demonstrable governance and transparency for taxpayers.

The new regulations stem from Australia’s acceptance of the Organisation for Economic Cooperation and Development (OECD)’s Base Erosion and Profit Shifting (BEPS) initiative.

Australia is one of 100 countries backing the initiative, which aims to reduce the nonpayment of fair tax by international businesses.

‘Justified trust’ means businesses must be

18 BUSINESSFRANCHISOR

able to demonstrate to the ATO that they have the right systems in place to test significant transactions for tax risk. The program applies to the top 1,000 Australian companies and each one will need to take a tailored approach depending on variables such as size and industry.

Broadly speaking, each business will need to cover four key areas: 1. Understanding the business’s tax and risk management framework; 2. Reviewing tax risks communicated to the market; 3. Understanding significant new transactions; and 4. Understanding why accounting and tax results may vary.

Previously the ATO relied on companies to selfidentify their main tax risks, but now companies will have to provide fact-based evidence to justify their tax position. That means they’ll need to re-examine how they structure their financial and tax teams, and how they approach

data and technology. Much more collaboration is required in a justified trust environment, so organisations must ensure their systems and culture can adapt to the new ‘justified trust’ mindset.

Franchisors must make sure every facet of the company can contribute to the new level of transparency required; this means involving everyone from the board and senior leadership team through all the different departments, not just finance and tax, but also risk, internal audit, and human resources.

It’s important to conduct a gap analysis in coordination with stakeholders from various departments, then develop an action plan.

By creating a spirit of collaboration and breaking down information silos, it will become possible to understand how each part of the organisation is accountable for ensuring the business pays the right amount of tax.

Technology is the key enabler to let businesses achieve this. Many businesses are undertaking transformation projects to achieve justified trust. For example, corporations are moving

away from using manual spreadsheets in favour of automated systems that reduce the risk of errors. This could include accounting software that automatically pulls in accurate bank data, for instance.

Breaking down silos is crucial. Embedding the tax department in the activities of the finance department and other areas of the business can create a spirit of collaboration and a genuine appreciation for why each department needs certain information.

While the OECD acknowledges that most businesses pursuing aggressive international tax strategies aren’t breaking the law, it also suggests they do not meet community expectations about paying the appropriate amount of tax for the profits they earn. Most Australian corporations are already well underway with actions and strategies to address the BEPS initiatives and establishing ‘justified trust’ is the next step.

And, while technology and data are clearly integral to the ‘justified trust’ process, organisations must be careful to avoid

Joining Thomson Reuters in 2007 from PwC, in 2016 Ben Scull was appointed to the role of managing director for Thomson Reuters Tax & Accounting business in Australia and New Zealand. He was promoted from the role of Sales Director for Australia and New Zealand, where the regional sales force grew by 10 times in seven years under his management.

overcommitting resources to compliance. The right technology can expedite the compliance process, but it’s important to ensure valuable resources remain focused on the business’s strategic needs.

Businesses cannot meet the ATO’s obligations and expectations alone. It’s vital to work with the right partners who can contribute best practice technologies, processes, and data to support and maintain an organisation’s justified trust position.

The correct combination of internal focus from the board down, in combination with insights from expert partners, gives organisations the best chance of achieving tax compliance

in an increasingly-complex global regulatory environment.

The Tax and Accounting business of Thomson Reuters is a leading provider of technology and integrated information solutions to accounting, tax and corporate finance professionals. They focus on providing technology and integrated information and guidance to accounting, tax and corporate finance professionals in public accounting firms, corporations, financial institutions, law firms and governments. www.legal.thomsonreuters.com.au

BUSINESSFRANCHISOR 19

David O’Rourke

Why you should invest in the things you can’t see You only get one chance to make a first impression.

We’ve all heard it, and every business owner I know lives this mantra through their brand and their people. But how many businesses apply the same level of thought to the less tangible aspects that together make up the atmosphere in their store, club or restaurant?

Subtle elements like music, acoustics and lighting all play a hugely important role in customer experience and are as crucial to making a good first impression as the

20 BUSINESSFRANCHISOR

welcoming smile of a staff member or the merchandise itself.

For years, analysts have been convinced that the gym bubble would burst, that the retail market would crumble under the immense pressure of online sales, or that restaurants would go out of business due to short-term economic downturns. But despite these fears and challenges, new gyms continue to open every day and major international retail and QSR franchises keep setting up shop in Australia with countless success stories. The common thread amongst them all is their focus on the finer details and end-to-end execution, to ensure they stand out for all the right reasons.

Ambience is one of these little details that, done well, makes a marked difference to a business operating in a crowded and highly competitive marketplace.

Measuring value There are two ways to approach a competitive market: 1. Drop your price - lower your costs, compete on price and hope you can outlast your competitors.

2. Increase your value - make a better experience for your customers that elevates your brand and creates demand for your product, allowing you to charge more for it.

When the going gets tough, it is easy to default to the first option, because it’s less risky and normally involves spending less rather than more. But dropping your price as a long-term strategy, I think, is a far riskier approach. What customer is going to thank you, recommend you or be loyal to you for reducing your price if, to achieve it, you have to deliver a lower-

quality product or service? In the end, your best outcome here is survival and the acceptance of a lower margin, probably forever.

But if you take the other approach and spend wisely to enhance your brand, you create demand, strengthen loyalty and attract new customers, who are often willing to spend more for a quality product or service they can only get from you.

For gyms of all sizes, retailers, cafés, QS and fine dining restaurants, atmospherics tend to be one of the first casualties when money becomes tight. Because they’re intangible and offer no direct and demonstrable proof of ROI, they are an easy target. Perhaps after reading this you may think again.

How your venue sounds impacts what your customers spend There are countless quantitative research pieces designed to prove this point, but simply reflecting on your own experiences is a much easier and more personal way to highlight this fact.

How many times have you found yourself in a restaurant on a Friday night, struggling to get into a conversation or constantly distracted because of the noise around you? Happens to me every week, but it was not until I focused on it that I recognised how it very acutely impacts where I go. If you go to a restaurant that is noisy or uncomfortable, I bet you that you won’t recommend it or book it again. And critically, it is rarely the music that has anything to do with the problem. In fact, all too often, the music simply amplifies an underlying acoustic problem.

Restaurants and retail outlets are (rightly) victims of the most recent architectural trends, and in 2017, that trend is minimalist.

Polished concrete, lots of metal, hard surfaces everywhere; they look great, but they severely impact acoustic quality. Every noise made in the room echoes and amplifies and with no soft touches to absorb the sound, the problem escalates. People can’t hear, so they talk louder.

Staff think it sounds noisy, so they pump up the music. Before you know it, you have created a room that sounds like the end of the Beatles track – A Day in the Life.

Fixing the problem is normally quite straight forward and can usually be solved by adding soft touches - perhaps some acoustic tiles on the ceiling. Avoiding the problem in the first place starts by recognising the importance of

David O’Rourke is CEO of Nightlife Music; Australia’s largest background music company, providing licensed music and visuals to more than 5,000 of the country’s top commercial venues including Merivale, Crown Casino, ALH Group and Anytime Fitness.

sound management and factoring it into your overall design.

Once you have your acoustics sorted, and only then, spend money on your audio-visual setup.

Spending a bit more upfront to distribute sound intelligently may feel like overkill, but even sound delivery creates a warm and welcoming space that is consistent and inviting.

Your staff are trained to sell your product; they aren’t DJs! All too often, business owners let their staff pick the music that plays in store. Invariably the result is a great playlist… for about 45 minutes, perfectly suited to the 19-year-old who loaded it, probably with a few of his favourite explicit tracks thrown in for good measure. The risk is that you lose control of your brand, potentially alienate some of your customers and, at best, massively distract a staff member from their core duties just to save a few dollars on using a professional music provider.

Matching music to your brand and sustaining it for long periods of time is both a science and an art. It is challenging and it makes a difference, and if you don’t believe me, try making a playlist of quality that is 500+ songs in length. Giving your staff some level of control is great and will impact their mood and consequently their service. Getting the customers involved is even better as you will extend dwell times and drive repeat visits. But you have to underpin it with a commercial platform that keeps you in control of your brand.

The best example of this is fitness, where a well-managed inclusive music service encourages members to ditch their own device and get involved with the music playing in their club; creating communities instead of just renting their gym equipment and providing the perfect tool to drive loyalty and upsell for other fitness services like personal training.

A well-managed music service is not expensive; the problem is that we all expect music to be

free these days so that sets an unrealistic and unsustainable benchmark. When you put it into perspective, spending a few hundred dollars on music each month is a small amount in the total monthly operating cost of your business, especially for such a hugely powerful and important aspect of maintaining a strong brand.

What about lighting?

Lighting is just as important as sound. A well-lit store (which does not always mean bright) sets the mood and creates a warm and welcoming atmosphere. Make sure people can see your products or operate your equipment safely. For a restaurant, balancing low light with enough to see your food can be hard, but factor it into the design process because it can drastically impact the experience. Too bright and you could ruin the chances of a second date; too dull and you could create one that definitely shouldn’t happen!

Ambience management never stops!

Just like your brand and your customer service, you need to constantly think about and evolve the way you deliver ambience in your business.

Innovate as technology allows; don’t be frightened about involving your customers or empowering your staff; and look for ways to be different and ahead of the curve. Spend money carefully but don’t look to cut corners on the intangibles because they matter just as much; maybe more than some of the aspects that appear easier to measure. And always remember that, whilst you can’t measure the business you won from focusing on the little things, you also can’t quantify what you lost all to save a miniscule amount in the grand scheme of your business.

For more information about Nightlife’s superior music subscription service for business, call or visit: 1800 679 748 www.nightlife.com.au

BUSINESSFRANCHISOR 21

Charles Fisher

When an Australian grown product doesn’t count as an Australian ingredient

Separating processing from origin of ingredients Australia’s previous mandatory country of origin labelling system largely defined country of origin by where the majority of the product’s costs were incurred and where it was substantially transformed.

the consumer concerns, they also create

However, the system caused many Australians to feel concerned that products could be grown or processed in countries with less stringent food safety records and yet still claim to be ‘Made in Australia’.

creates an ironic yet disconcerting situation

A key regulatory innovation in the new Country of Origin Food Labelling Information Standard (the Information Standard) is therefore to separate the labelling requirements for processing of food (the kangaroo logo) and the origin of its ingredients (the bar chart).

While these changes were meant to address

22 BUSINESSFRANCHISOR

a heavy burden of compliance on the food industry, especially companies with global supply chains or that use Australian ingredients but process them offshore.

In this article, let us consider the situation of 100 per cent grown Australian almonds that are ground and strained to create milk outside of Australia, then re-imported back into Australia and used as an ingredient in a yoghurt analogue product. FoodLegal believes that the new law where the different potential country of origin logos that could apply to such a product might misrepresent the origins of the product.

Potentially overlapping definitions of “made in” and “grown in” Both “made in” and “grown in” are defined in the Information Standard. A product can claim to be “made in” a country if “it underwent its last substantial transformation in that country”.

A food or ingredient can claim to be “grown in” a country if it: (i) was materially increased in size or materially altered in substance in that country by natural development; or (ii) germinated or otherwise arose in, or issued in, that country; or (iii) was harvested, extracted or otherwise derived from an organism that has been materially increased in size, or materially altered in substance, in that country by natural development.

A food consisting of more than one ingredient can also claim to be “grown in” a country if: (i) each of its significant ingredients was grown in that country; and (ii) all, or virtually all, of the processing occurred in that country.

The difference in “grown in” definitions for single ingredient foods and multiple ingredient foods is intriguing. The definition of “grown in” as it applies to single ingredient products makes no reference whatsoever to the processing of the product.

Australian-grown almonds definitely meet the definition of being “grown in Australia”.

However, if they are “milked” outside of Australia, do they then fall outside the definition of being “grown in Australia”? If any ingredients are added to the milk, the resulting milk could clearly no longer claim to be “grown in Australia” because it becomes a multi-ingredient product where not all of the processing occurred in Australia. The milk could claim to be “Made in” the country where it was ground because turning almonds into milk would clearly constitute substantial transformation.

However, if there are no other ingredients added and relying solely on the wording of the Information Standard, there is an argument that the milk could still claim to be “Australian grown” even if it had been substantially transformed overseas. It must be noted that this argument runs counter to the views of the government in its supporting documentation and in the online government online logo tool which both assume that overseas substantial transformation precludes the making of a “grown in Australia” claim. This view also runs counter to previous action taken by the ACCC for misleading or deceptive conduct.

Declaration of offshore processing The Information Standard does acknowledge that some processing of food (short of “substantial transformation”) can happen overseas without compromising the “Australian grown” claim. Section 20 of the Information Standard requires any overseas processing of Australian grown product be described within the logo.

This article by Charles Fisher, a principal of FOODLEGAL, a specialist firm in food compliance , first appeared in FoodLegal Bulletin - Feb 2017 issue, and is republished here with permission of the author and the publisher Lawmedia Pty Ltd (ACN 127 791 968).

ingredient is “Australian” or not is defined as follows: (a) an ingredient that was exclusively grown or produced in Australia is from Australia; Thus if anything is added to the milk, it cannot be described as having been “exclusively grown” in Australia. If nothing is added, the government and ACCC still believe that substantial transformation (i.e. the milking) precludes the milk from meeting “grown in Australia”.

So would such milk, if sold in the Australian market, have to display on its bar chart that it is 0% (zero per cent) Australian despite the fact that 100 per cent of it was grown in Australia?

While this may be appropriate on a broader scale, in this instance it has further ramifications, most particularly in relation to the bar chart. The bar chart is required to display the percentage proportion of “Australian ingredients” in the product. Whether an

Therefore, such a product would have to choose between either of the following logos based upon its view as to whether the milk was “exclusively grown in Australia” despite being ground and strained outside of Australia:

Potential claims and logos For the sake of example, we have chosen New Zealand to be the overseas country where the almonds are being ground and strained, due to the fact that most Australian consumers hold New Zealand produce in high regard.

If you were selling just almond milk, there is an argument that the milk has a single ingredient (namely almonds) and that the almonds were grown in Australia. Thus, it could have the following logo:

When is an ingredient “Australian” for bar chart purposes?

So far, it seems clear that ACCC and the government would hold that almonds milk derived overseas from Australian almonds cannot claim to be “grown in Australia”, despite the wording of the Information Standard being somewhat ambiguous in relation to single ingredient products.

product 100 per cent Australian ingredients or only 25 per cent Australian ingredients?

While it can be strongly argued that the milk has 100 per cent Australian ingredients, the milk itself may not meet the definition of being “exclusively grown in Australia” and thus may not count towards the Australian ingredient proportion of the yoghurt.

For milk vendors, while the kangaroo logo and “Grown in Australia” claim might be nice, the above logo is far from misleading when representing the nature of the product.

However, the issue becomes far more complicated when the almond milk is then used as an ingredient in another product, for example a fermented almond milk “yoghurt” that is made in Australia. If a tub of yoghurt is 75 per cent almond milk and that milk is from only Australian almonds but has been ground and strained in New Zealand, is the resulting

OR

While the latter logo would be safer from a regulatory perspective, would it not be misrepresenting a product where every single ingredient was grown in Australia and only one process was conducted overseas?

If the overseas milking is a cost-saving exercise that is necessary for the viability of the product, but then results in not being able to claim that the milk is Australian, what incentive is there for such a product to use Australian grown almonds in the first place?

Such confusion and ambiguity shows why the new Information Standard is still causing the Australian food industry a severe amount of grief, and even regret, even for products that desire to use only Australian ingredients.

More info: https://www.foodlegal.com.au/ foodlegal-online.html

BUSINESSFRANCHISOR 23

THE ENERGY ALLIANCE

Energy costs are soaring!

DOES YOUR FRANCHISE SYSTEM HAVE A PROPER ENERGY MANAGEMENT SYSTEM? Spiralling electricity and gas costs over the past year have created serious concerns for franchise systems and franchisees.

Energy is now one of the prime costs for a franchise business. A greater concern is the fact that many franchise systems and franchisees do not have a proper energy management plan – or future strategy - in place.

No longer is price the only driver that a franchise system should consider in the energy market. The amount of energy a business consumes now holds just as high importance as the actual price itself

SO WHAT ARE THE STEPS TO IMPLEMENT YOUR FRANCHISE ENERGY MANAGEMENT PLAN?

1b

Buying Electricity & Gas for your Franchise System

Electricity and gas are commodity markets, and as such, are substantially LQćXHQFHG E\ PDQ\ IDFWRUV ERWK LQWHUQDO and external. For example, a weather catastrophe such as South Australia experienced in 2016 can send the market soaring by 25% - 50% overnight.

Having a professionally organised, group buying strategy for your franchise

24 BUSINESSFRANCHISOR

system is vital to keep this rising expense under control. The Energy Alliance have organised “group energy purchasing� for some of the largest franchise systems in Australia over the past 15 years, and are experts in managing this area of expense.

2b

Monitoring your Energy Usage

If you can’t measure it, you can’t manage it!

Knowing how when, where and why the EXVLQHVV XVHV HQHUJ\ LV WKH ĆUVW DQG PRVW important part of managing your energy usage. The Energy Alliance can provide detailed energy usage reporting, ranging from the times you use your energy, how much energy is used in that period (peak periods), CO2 emissions, power factor and demand data. This information is used to create a detailed map of how your business uses energy, day to day. With this information, a proper energy management plan can be created, with measurable outcomes. And all this visible via your online portal.

Reduce your energy consumption by 20% 40%, and you have those savings forever – and a healthier bottom line!

3b

So how can Franchise Systems reduce their energy usage?

Solar Power is by far and away the most effective way to reduce your energy usage. You can take from 10% - 100% off your energy usage. Solar Power for business is now the cheapest it has ever been in Australia. Top quality, Australian Solar Council Approved solar systems, are now available at approximately $1.20 - $1.40 per watt. 5 years ago these solar systems were 3 – 5 times more expensive.

Investing in solar now not only adds to reduced costs year in, year out, but also FUHDWHV JUHDWHU SURĆWDELOLW\ ZKHQ VHOOLQJ potentially adding tens of thousands of dollars at sale time.

BATTERY STORAGE The next “big thing� in energy. Battery storage will give franchisees the ability to store energy for usage during peak / high cost times during the day. Simple to use, franchisees can recharge batteries overnight during cheaper off-peak times via the grid, or use additional solar panels for recharging battery systems during the day. Effectively saving $1000’s on energy costs per year. Call The Energy Alliance to ĆQG RXW KRZ EDWWHULHV FDQ ZRUN IRU \RXU business.

DEMAND MANAGEMENT Many franchise businesses are being placed on network tariffs (pricing models) which include a charge for how much demand you place on the network system.

These demand charges can be very expensive – up to 30% of your bill. The Energy Alliance can help reduce these GHPDQG FKDUJHV VLJQLĆFDQWO\ YLD FOHYHU technology that can save your franchise business $1000’s per year in costs.

LED LIGHTING – SAVE UP TO 85% OFF LIGHTING COSTS LED Light is the latest and best WHFKQRORJ\ DYDLODEOH LQ HQHUJ\ HIĆFLHQW OLJKWLQJ /(' OLJKWV DUH VXSHU HIĆFLHQW using between 40% - 85% less than present lighting systems such as incandescent or halogen lighting. LED OLJKWLQJ DOVR KDV VLJQLĆFDQWO\ ORQJHU OLIH cycles bringing you maintenance savings as well. The Energy Alliance offer turnkey solutions for LED lighting and extended 5 year warrantees on all products.

VOLTAGE STABILISATION 9ROWDJH 6WDELOL]DWLRQ UHPRYHV ćXFWXDWLRQ in voltage supply and allows you to take only the constant voltage you need to run your franchise. By reducing the voltage you take from the grid you reduce the real kilowatt hours consumed, thereby reducing your energy bill. This can reduce your energy charges by up to 15%.

Voltage Stabilization also provides voltage spike protection and current surge protection. Meaning no more computer system / POS system failures due to voltage spikes!

THE BOTTOM LINE At the end of the day having an effective Energy Management System in place for your franchise system ZLOO FUHDWH JUHDWHU SURĆWDELOLW\ IRU IUDQFKLVHHV ü 7KH (QHUJ\ $OOLDQFH KDV EHHQ GRLQJ WKLV IRU )UDQFKLVH Systems for the past 15 years.

Craig Jobson | CEO | The Energy Alliance For more information go to www.energyalliance.net.au or call us on (03) 9872 6869

Vicky Katsabaris

Why customer experience management matters

Customer experience (CX) management is a key differentiator for today’s top brands. As customers interact with businesses over a variety of touchpoints and channels, it has become essential to offer a consistently seamless experience.

reports that need to be fully adaptable as

But while everyone is rushing to launch CX programs, it’s not easy to know where to focus to drive the most value and change.

people learn from that feedback so that it is

A well-designed CX program should deliver real-time, actionable feedback from customers about their experiences and expectations, as well as their future intentions to recommend or purchase. It should connect multiple types of feedback across all customer touchpoints, and help organisations to focus on the areas of greatest impact.

Using appropriate customer measures, both lead and lag, organisations can then understand their performance by leveraging real-time stakeholder dashboards and comprehensive

26 BUSINESSFRANCHISOR

customer priorities and business needs change.

Qualtrics recommends seven key tips for organisations to manage the customer experience more effectively:

1

Customer feedback is key

Managing the customer experience depends on the ability to build a stable, repeatable process for capturing customer feedback and helping embedded into the way teams work and make decisions every day.

2

Measure the experience constantly

Organisations that measure the customer experience only at certain times of the year will fail to get a complete picture of the customer experience. Without a systematic approach, businesses will get a fragmented picture of the customer experience, which doesn’t provide enough information to make positive changes for better results.

3

Choose where to focus first

While it’s important to markedly improve all aspects of the customer experience for all types of customers across all touchpoints it’s critical to have a focus. Businesses should therefore identify the areas that customers interact with their organisation with highest frequency and prioritise the moments that matter most.

Whether that’s a particular customer segment; interaction across a particular touchpoint; or interaction at a certain stage of the journey.

Whatever the business chooses to measure, it must be able to demonstrate that it has taken the feedback on board and made substantial changes accordingly before moving onto the next piece of the puzzle.

4

Set targets tied to business objectives

Measuring the customer experience and responding to opportunities for change is important but, to deliver optimal results, businesses must set clear targets that correspond to business objectives. For example, if the business is looking to reduce the transaction cycle times by a certain amount,

then it should focus on the measures of the customer experience against that target. This puts the organisation’s focus on reducing cycle times, delivering a better customer experience.

Vicky Katsabaris is a principal consultant and customer experience subject matter expert at Qualtrics.

She provides expert guidance to organisations implementing customer experience programs. Prior to joining Qualtrics, Vicky spent 3 years as the General Manager of Customer Advocacy strategy at Telstra, leading the team responsible for developing Telstra’s corporate strategy for improving customer advocacy.

5

Plan to respond

Businesses should have a plan in place for responding to customer feedback. Few things are more frustrating for customers than to feel their complaints have fallen on deaf ears. By contrast, customers who can see that their feedback was taken seriously and acted upon are far more likely to demonstrate ongoing loyalty to the company. It’s not enough for businesses to commit to responding; they must put an action plan in place that clearly lays out whose responsibility it is to respond to feedback and in what timeframe. This should be part of employees’ key performance indicators (KPIs) to illustrate that the business takes customer feedback seriously.

6

Remember employees drive experience

Many organisations forget about the impact employee engagement has on the customer experience. At the end of the day people drive change and an engaged workforce is essential for long term success of a customercentric brand. Companies should learn from their people what gets in the way for them in delivering a superior customer experience and actively remove the barriers for their people.

They should also implement a strong internal communications campaign that encourages a positive, customer-focused culture and rewards employees to deliver exceptional customer experiences. By making this approach a part of the daily culture, organisations can ensure a consistently-positive customer experience.

By contrast, a culture in which employees are driven by fear of not producing results will spill over into their interactions with customers and damage the customer experience.

7

Map the journey, not the moments

Businesses that map the customer journey by segment can better understand the unique paths their customers take. This lets them measure things like barriers in the journey, what drives satisfaction, what drives purchase decisions, the relative importance of each stage in the customer journey, and more.

Organisations that can tie journey performance metrics to actions can deliver customer

experiences that are tailor-made to encourage loyalty and repeat purchases. Furthermore, customers may be satisfied during individual interactions within the journey while considering themselves to be dissatisfied overall at the end of the journey. By measuring their performance when key customer experiences are delivered through the journey, and not just during one-off interactions, organisations can see opportunities for improvement as well as areas that are working well, and should be rewarded and encouraged.

2

Get the right feedback to make the best decisions

Just asking customers for their opinion is not enough. Organisations could be asking the wrong questions, which means they are collecting and measuring data that does not lead to the best decisions. Going deeper with the questions, pulling out a customer’s expectations, drivers and perceptions, will help the business learn how to do things better. It’s

Furthermore, organising teams around key journeys lets businesses connect their functional siloed teams and enable them to work together to innovate, deliver customer value, and find ways to improve efficiency, which reduces cost.

also important to divide the feedback based

To achieve all of these steps, it’s critical to capture customer feedback in the moment, not once a year or even once a month. The social media age has created an expectation among consumers that businesses will respond to them immediately. If not, they’ll quickly take their business elsewhere.

3

Online surveys provide an ideal channel to get in-the-moment feedback from customers.

However, these can prove problematic when dealing with customers who are wary of being spammed or who have been burnt before by companies that don’t act on their feedback.

Businesses need to build trust with consumers by demonstrating that they will use their feedback to change.

adjustments faster shows customers the

Qualtrics has identified three things to remember when looking to capture in-themoment customer feedback:

organisation that is looking to build or

1

Timing is everything

Understanding when to capture feedback is critical, so the business can learn about the entire experience and make adjustments quickly.

on demographics and touchpoints, which can include call centres, emails, chat logs, social media comments, and even customer reviews on review sites. All feedback is useful regardless of origin.

Prioritise closing the loop at scale

The faster a business can get customer feedback to the right teams for action, the quicker it can make adjustments to meet the needs of many customers at scale. Making company listened to their opinion. This preserves and deepens trust in the brand, especially if the business identifies problems it can resolve for the customer.

Qualtrics has released its Customer Experience Management: 5 Competencies for CX Success recommended for any start a CX program. The competencies outlined in this e-book detail how organisations large and small can focus on customer needs, inject that view into the company, and use those customer insights to drive business results. www.qualtrics.com

BUSINESSFRANCHISOR 27

Chris Urry

Accelerate 2017 growth with mindful A-D-E: automation, diversification and expansion Like any athlete knows, it’s not just about working until you drop, it’s about taking on a sustainable, mindful practice that prepares you for the longterm goals and stops you from getting injured in the meantime.

Following the A-D-E, also known as automate, diversify, and expand mantra in a managed and mindful way, will help you to really make a difference this year. With 2017 off to a productive start, many franchisors are looking

28 BUSINESSFRANCHISOR

for the edge to get them to peak performance.

trapped in the body of a $3 million company. It

Whether you are trying to build a franchise empire or just want to make enough to pay yourself a decent wage and set yourself up for a comfortable future, the same principle applies: you must understand exactly where you are.

Accepting the lifecycle of your operation and building up is the prudent approach.

is important you have the right infrastructure in place before you expand. We all know you can’t build on poor foundations and the same applies to business growth.

Enter the automation engine

Automation, diversification, and expansion are talked about a lot these days, so let’s understand how these can apply in a bid to scale up your franchise in 2017.

Before we jump into automating everything that

According to business expert Ron Carucci in a recent Harvard Business Review article, the stall point for many mid-size businesses is when they find themselves a $100 million organisation

There is a lot of hype around automation

moves, we need to firstly deconstruct what you are trying to achieve from a particular role or process. however franchise owners need to really consider the types of technologies that will work in their businesses.

Chris Urry, Director and CEO at IntegraPay, has more than twenty years’ experience in business and management across Australia, New Zealand, Asia, the United States and the United Kingdom. Chris has extensive experience in providing financial solutions to complex businesses.

It is important you have the right infrastructure in place before you expand. We all know you can’t build on poor foundations and the same applies to business growth.”

the profitability of the operation. Can you risk it for the biscuit?

Before you take yourself on the automation journey, you need to stop and think

Optimising the automation process starts with seeing the tasks of a job as independent and fungible components. Experts believe deconstructing and then reconfiguring the components within jobs reveals humanautomation combinations that are more efficient, effective, and impactful.

With Artificial Intelligence, or AI, routinely taking out blue and white collar jobs, the challenge is to know what you want to remain as ‘human work.’ How happy will your customers be if they were to be greeted by a robot on the shop floor or on the phone?

Adopting an automation strategy, that realises its benefits, avoids needless costs and rests on a balanced understanding of work and its role in

With automation the flavour of the month, it is important to understand the repeatable tasks in your business. Make a list of what you and your staff do each day and the time it is taking you.

Whether it’s the stock ordering, managing the customer experience, staff rostering, serving customers, invoice creation or chasing overdue payments. You need to know what you and your staff are doing for all the hours they are spending in the business.

There are literally a million apps out there, you need to ensure the apps you select are integrated and rewarding you for the discipline of recording lots of pieces of data.

Most of all, make sure value is not lost in the automation.

Understand the difference between diversification and expansion Diversification and expansion are different.

While they can co-exist in most business empires, they are distinct operations.

Diversification involves the addition of new

products to existing products, either being manufactured or being marketed.

Expansion, on the other hand, involves the existing product line.

Both give you the opportunity to target more customers that have not been explored.

Identifying these markets and customers is one of the methods of growth that a franchisor can consider. This approach may require some funds to execute successfully especially for new regions.

The concept was created by the father of strategic management Igor Ansoff, the Product Market Expansion Grid is known to be used by many Fortune 500 companies such as Philips, IBM and General Electric. The matrix is designed so that as a company plots its new and existing products and markets, the amount of risk associated with that strategy corresponds with its position on the grid. Developing a strategy with existing products and markets is low in risk, but with new products and markets risk increases.

Scaling a business There is an art to scaling a business - a point not lost on Sherry Coutu’s influential ScaleUp Report (2015) which touts the expansion process in a predictive fashion. Adopting the same approach will also help to create the platform for successful growth. In her view,

BUSINESSFRANCHISOR 29

Setting yourself goals over a 6-month period, then 18-months and then 3-5 years will help to set you up for success.” building collaborations was key to success.

Scaling up to manage growth involves

Many smaller companies are fortunate to find a market niche for a service or product that grows rapidly. When this happens, they simply ‘rinse and repeat’.

constantly questioning how your organisation

This approach, while attractive, ignores the reality that one day the conditions change and there is no safety net – in this case revenue that could be generated from another market. Think of those companies that gave 100 per cent of themselves to the mining boom.

Being able to quickly multiply successes is not the same as building for sustainable growth.

Taking the time to design an organisation that can sustain growth is what distinguishes great franchises from those that eventually get swept away.

30 BUSINESSFRANCHISOR

should look — in advance of intensified growth.

Start asking your business the hard questions – what would happen if our biggest customer no longer existed? Are we a one trick pony? Are we only targeting a small segment? This process can be powerful and slightly terrifying.

Choosing partners Creating a rule book for growth requires a simple list of things you will and won’t do. These may include – the amount of profit you can invest back in the business, the time predicted the change will actually reap the rewards and the target number for growth.

It is often the safest option to work within a

time and dollar budget. Often the expansion and diversification we seek is not realistic given time and money constraints. Setting yourself goals over a 6-month period, then 18-months and then 3-5 years will help to set you up for success.

Being agile is a key ingredient to modern success Most of all don’t be afraid to explore. It is a great time to be a franchisee with so many sensible and scalable solutions you can take advantage of, the world is your oyster. Following the automate, diversify and expand mantra in a mindful manner will really help you to make a difference in 2017.

IntegraPay offers end-to-end payment solutions to industries across Australia including Government, retail, professional services and not-for-profits, incorporating their systems into platforms such as Xero.

1300 592 283 sales@integrapay.com www.integrapay.com

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mark hoppe

Australian exporters urged to

manage risk when dealing with key APAC countries

The latest Atradius Country Report (January 2017) has revealed that Australian organisations looking to do business with international partners should be especially cautious due to lessfavourable economic conditions for many of Australia’s trading partners.

Atradius develops its country reports based on extensive research by experts around Asia Pacific. The report is designed to give Australian exporters insight into the risks and opportunities of doing business with various trading partners in the region. It’s crucial for local businesses to be aware of the potential pitfalls to ensure they make smarter decisions and take steps to protect themselves in the event a debtor doesn’t pay.

The January 2017 report offers an in-depth analysis of 12 key countries in the Asia Pacific region, including: China, India, Indonesia, Japan,

32 BUSINESSFRANCHISOR

Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

The report revealed that India, Malaysia, Philippines and Vietnam pose the highest risks to Australian exporters, while Singapore poses a low risk and is relatively stable.

Additional key insights included: China: Insolvencies continue to rise and businesses are struggling to pay. Key affected industries are: construction, metals and steel, shipping, mining, and paper. Australian companies should exercise caution when dealing with small and medium-sized private businesses.

Furthermore, the credit risk situation is strong for agricultural and financial service industries.

It is always advisable to know who you are contracting within China and try to start on relatively secure terms first.

India: India’s stable political climate, reform-oriented government and low oil prices are driving economic growth, but the banking sector is weak, so Indian businesses are looking for finance from foreign banks, in foreign currencies. That hampers India’s long-term growth potential even as GDP is set to increase to around 7.5 per cent. The best outlook is in chemicals and pharmaceuticals, food, paper, and services industries, while the risk is high in construction and materials, including metals and steel.

Indonesia: Commodities account for more than 60 per cent of Indonesia’s exports, while the country depends on oil imports and a high stock of inward portfolio investment. Red tape, widespread corruption, a poor legal system, an

inflexible labour market and poor infrastructure limit Indonesia’s growth rate and creates risks for businesses. Food, and construction and materials are markets trending upwards, while Australian businesses should exercise caution with the automotive/transport, and metals and steel industries by making sure their business is proactively managing risk through strategies like trade credit insurance.

Japan: Japan’s growth remains lacklustre but a forecasted strong US dollar in 2017 may increase Japanese exports and business sentiment. Extremely high public debt, a shrinking population and declining working age make it difficult for Japanese companies to grow. There is, however, a good performance forecast for the agriculture, electronics/ICT, financial services and food industries. The textile industry is one for Australian businesses to be wary of, the risk is high with performance in this sector below long-term trend.

Malaysia: China’s struggling economy poses a risk to Malaysia and a corruption scandal surrounding Prime Minister Najib could affect business and consumer sentiment. However, the performance outlook is good for industries including agriculture, financial services, food, and services. High-risk industries include: construction, construction materials, paper, steel, and textiles.

The Philippines: Economic growth has been persistently high for the past five years, driven mainly by private consumption. Foreign direct investment has tripled since 2009 and growth is expected to remain stable in 2017 and beyond. The Philippines depend on the US and Japan rather than China so it will be relatively unaffected by China’s economic woes. Infrastructure projects will drive demand for related products and Philippine businesses can expect a good performance outlook for agriculture, chemicals/pharmaceuticals, consumer durables, food, machines/engineering and services industries. Politically, President Duterte’s violent anti-drug campaign has raised doubts among international investors about the government’s commitment to the rule of law, and relations with the US are becoming strained. Australian businesses should therefore proceed with caution.

Singapore: Singapore is stable and business-friendly. Its growth may be sluggish, but strong macroeconomic fundamentals

Mark Hoppe joined Atradius in Sydney in 2006 as the Head of Client Service, which saw him responsible for all the day to day client and broker issues. Mark was appointed as Managing Director for Atradius Australia and New Zealand in August 2014, with more than 17 years’ experience in the insurance industry under his belt.

Australian businesses should protect themselves by thoroughly researching potential business deals.” remain in place, making Singapore relatively low-risk. The city state has strong ties to China, which may affect the economy, while the potential protectionist measures taken by the US government may also slow growth.

South Korea: Experiencing some political turmoil, South Korea also faces challenges with a highly-indebted population and strong trading ties with China. South Korea’s economic model is export-driven and is currently incapable of providing sufficient employment and purchasing power. The political climate makes immediate improvements unlikely. The metals, steel, construction and construction materials markets have a bleak outlook, but the automotive, chemical/pharmaceutical, financial services, food, services, and consumer durable industries are all looking up.

Taiwan: Taiwan’s political situation remains unstable with China threatening to invade the island if it formally declares independence.

Weak external demand means economic growth is subdued, especially given 40 per cent of its exports are destined for China. Public finances are sound and the budget deficit is low. Industries with a higher risk include the automotive/transport, steel and metal industries. Services, consumer durables and electronics/ICT are looking up, while the food industry is excellent.

Thailand: Thailand’s economy is expected to grow in 2017, mainly due to increasing tourist arrivals and public investment in infrastructure improvement. Government debt remains low and the banking sector is healthy. However, the long-term outlook isn’t quite as positive, with growth being held back by less export demand from China and low commodity prices. The

textiles, steel, and consumer durables industries are high risk, while the food industry is looking good.

Vietnam: Vietnam’s communist government remains in power despite public discontent.

Its manufacturing industry depends on raw materials imported from China, even as it engages in a territorial dispute with China over conflicting claims in the South China Sea. Economically, growth is high and inflation is under control. However, Vietnam depends on Asia as an export market so it remains vulnerable to economic downturns in the region and the withdrawal of the US-led Trans-Pacific Partnership will deal a heavy blow to Vietnam’s growth prospects. Consumer durables are the only bright spot in Vietnam’s economy, with struggling industries including construction, construction materials, financial services, metals, paper, and steel.

While Asia Pacific remains a key market for Australia, it’s important to be aware of the political and economic vagaries of the countries which organisations do business in and with. Australian businesses should protect themselves by thoroughly researching potential business deals and by taking out trade credit insurance, which can protect the organisation in the event of non-payment.

Please see the following link for the full report. https://atradius.com.au/documents/countryreport-apac-2017-crapac1701en.pdf For more information contact: 02 9201 5222 info.au@atradius.com www.atradius.com.au

BUSINESSFRANCHISOR 33

Matt Daunt

2017 marketing trends keep SMES ahead of the Marketing is an everchanging practice, where adaptation and development can either make or break a business.

Understanding and implementing current marketing trends is crucial to success, as it allows business owners to stay at the top of their respective industry and ensures objectives are achieved. Here I share the top marketing trends SMEs need to look out for and adopt this year.

34 BUSINESSFRANCHISOR

1

Native and live videos Video-based advertising campaigns are

now the new frontier of product promotion.

With videos flooding the feeds of Facebook, Instagram and Twitter users worldwide, marketers need to adapt and evolve with this trend. Video is now on track to be the answer to many business goals this year, whether you’re looking to increase customer reach, leads or sales.

Short videos, particularly those that are part of a series have become popular among audiences

as they are easy to digest. Live streaming and 360 degree videos have both been successful as the immersive experiences enable customer engagement. It’s crucial to integrate videos in all marketing campaigns as they connect with online customers immediately and the message is often a lot more memorable than static words in a newsfeed.

2

Make personalisation a priority

It’s no industry secret that consumers want to be interacted with on a personal level and

Matt Daunt is CEO of the end-to-end creative marketing solution agency, The Certainty Principle. The senior leadership team has a combined 60+ years of experience.

random or according to what is popular with your customers? One-to-one marketing is also becoming accessible to small businesses, with mobile apps being a good platform on which to begin testing it. In a world of too much content and not enough time, personalisation is a huge win for brands looking to earn consumers’ attention.

are generated, the more prospective customers a business will have, meaning ongoing marketing efforts will have a greater reach and this will help improve ROI. Marketing is all about finding new and creative ways to reach potential customers and capture their attention.

Producing a lead generation engine could give you the innovative edge you’ve been seeking.

3

5

Embrace the ‘Internet of Things’

The development of the internet has established a level of interconnectivity that is unprecedented to any other previous technological advancements.

nds to he pack the quality of their customer experience is dependent on this aspect. Customers are seeking a service that continually treats them as a priority.

Personalisation means segmenting your content to reach different audiences based on their preferences, habits and demographics. It also means customising your content accordingly, not only in the form of what offers you promote but also in terms of content designed to help or benefit your audience. If you share posts or videos that cover the benefits and features of certain products, is the selection of products

The Internet of Things is the integration of physical devices and a computer-based system.

It elaborates on the concept of limitless connectivity between internet devices. This year, the Internet of Things is expected to leverage the power of billions of connected devices – a marketer’s dream.

Sensors, TVs, beacons and more are all producing useful data, which means this trend is opening doors for branders and marketers to integrate with the everyday lives of consumers.

The marketing implications of this concept are endless, with interaction not only limited to person to person, but now also between things and people and vice versa. Through expanding the way you use the internet and its connectivity abilities, you can gain the competitive advantage over other businesses.

4

Lead generation engine

Lead generation involves stimulating and obtaining consumer interest in a product or service and ultimately gaining inquiries as a result. A lead generation engine collects these inquiries to produce a valuable and efficient way of enhancing the way firms interpret customers.

Generating quality leads is the top marketing challenge of marketers, so it is imperative to be a business that excels in it. The more leads that

Influencer marketing

With the exponential upsurge of social media usage over recent years, the capabilities and marketing potential of platforms such as Instagram and Facebook have grown dramatically. Social media juggernauts also known as ‘influencers’ have revolutionised the way marketing and product placement is conducted on social media. Influencer marketing gives brands the opportunity to create word-of-mouth buzz.

Before using any influencer marketing platforms, define your brand’s goals, intended audience and compile guidelines which specify what you would like influencers to focus on and mention.

When influencers are used effectively, they establish credibility for the brand and create natural ways to reach niche target markets.

Influencer marketing has seen an increasing number of receptive consumers as they tend to trust recommendations from thought leaders, and therefore are more likely to purchase a product or use a service.

The Certainty Principle is a full service Creative Marketing Solutions Agency designed to provide all businesses a level of marketing certainty usually only enjoyed by large scale enterprises. Expert strategic, analytic, creative and media buying services across all channels are offered - paid, earned, owned and shared at a fixed price. www.certaintyprinciple.com.au

BUSINESSFRANCHISOR 35

Workplace Assured

MAKE SURE YOU’RE NOT AT RISK From service counters to the corporate boardroom, The Fair Work Commission is on the verge of introducing new legislation that will hold franchisors accountable for workplace breaches that occur anywhere in their franchisee network. Do you know your risk profile?

In August last year, the head office of 7-Eleven felt the anger of the national workplace relations regulator. An investigation had exposed the systemic underpayments of 182 employees – many of whom were migrant workers and deemed ‘vulnerable’.

Swift punitive measures saw the parent company slapped with large fines and pulled into a national inquiry. Addressing the Franchise Council of Australia, Natalie James, Fair Work Ombudsman, was pointed in her message: “Put simply, legally and morally a franchisor cannot hide behind or outsource its responsibility to ensure lawful remuneration to a franchisee.”

Now, a private bill is before Federal Parliament that will, if passed, result in amendments to the Fair Work Act 2009, introducing a new environment of accountability for franchisors and franchisees alike.

How would this pan out for stakeholders? For executive management charged with corporate

governance and operational strategy, your risk profile would extend to every location where your franchisees reside.

And for the majority of franchisees – small business owners faced with complex responsibilities and long days in the saddle – your potential oversights or slips ups could trigger a workplace breach and hefty fines.

The penalties for non-compliance are set to rise, with the Bill proposing to increase the maximum penalty from $10,800 to $108,000 per contravention for individuals, and from $54,000 to $540,000 per contravention for corporations. Deliberate and systemic contraventions would also be heavily fined.

Luis Izzo, Director of Workplace Relations at Australian Business Lawyers & Advisors, named ‘Workplace Relations and Employment Team of the year’ in the Lawyers Weekly Australian Law Awards 2016, explains that this legislation now shines a spotlight on all corners of the franchise industry, and franchisors should prepare.

“What franchisors need to be aware of is that it doesn’t matter if you didn’t know a franchise’s arrangements weren’t legally compliant. If it’s possible something might be amiss, and if you should ‘reasonably’ have known about the issue, your own business could be at risk. It begs the question - how well are you currently monitoring the operations of your franchisees?”

However, with both parties liable and at significant risk under these new laws, it’s more important than ever that franchisors and franchisees collaborate and work together to prioritise workplace compliance.

So what are the options? In the first instance, franchisors might foot the bill – engaging legal services to audit the level of compliance across their franchisee network. This could lead to the roll-out of processes, policies, and forms across every outlet. It’s also expensive.

A more cost-effective model might entail reviewing contracts with franchisees, writing in provisions for workplace compliance.

Associated fees could be paid by the franchisee or shared between parties.

A subscriber-based service is worth exploring as it offers an affordable and scalable solution, payable in monthly instalments.

Workplace Assured is a prime example; akin to having your own HR advisor or legal counsel on staff at a fraction of the cost.

The ‘HR in a box’ service sees business subscribers receive watertight templates and documentation, unlimited expert advice from the 24/7 Workplace Advice Line, and workplace insurance cover in the event of a claim.

Importantly, subscribers also have access to legal expertise via Australian Business Lawyers & Advisors, which functions as the technical engine room of Workplace Assured.

With a new era of accountability on our doorstep, the worst strategy for compliance is no strategy at all.

To learn more about Workplace Assured contact: 1300 575 394 workplaceassured.com.au

36 BUSINESSFRANCHISOR

NBC

YOU’RE ON THE RADAR!

Franchisors have been put on notice.

The Fair Work Commission is on the verge of new legislation that will hold franchisors accountable for workplace breaches – alongside your franchisees.

“Put simply … a franchisor cannot hide behind or outsource its responsibility to ensure lawful remuneration to a franchisee.”

Natalie James, Fair Work Ombudsman

Check now if you’re at risk of breaching workplace law, including unpaid wages and incorrect record keeping.

With more than 1,100 franchisors and almost

80,000 franchise outlets operating in Australia, compliance is now a shared responsibility.

Speak to one of our award winning workplace relations experts for free by contacting the Workplace Advice Line.

Call Visit

1300 496 955 help.workplaceassured.com.au Workplace Assured is proudly brought to you by the State Chambers of Australia

NBC 2401 WPA Advert_franchisor_A4.indd 1

22/5/17 4:41 pm

Bruce Drewett

could your franchise be the next headline?

As a franchise organisation, your brand is your most important asset, but it can be challenged when your franchisees are left unsupported.

In November 2016, master franchisor of Yogurberry1 was hit with $146,000 in penalties imposed a precedent-setting Federal Court judgment against the frozen yoghurt chain.

Fair Work Ombudsman (FWO) Natalie James said, “The result of this matter sends a clear warning to the operators of franchise networks in Australia that refusing to take responsibility for addressing exploitation in their networks is not a viable option.”

Australian franchisees operate in a challenging environment. Shifting workforce demographics, labour shortages, geographically dispersed

operations and changing government regulations, such as the recent cancellation of the 457 visa, clamour for attention. At the same time, employees increasingly demand an easy to use, personalised experience throughout their employment journey.

For many franchises, these challenges drive an on-demand approach to building their workforce. Using a mix of employment models, such as part-time and shift or contract work, enables great flexibility for both the franchisee and employee. However, legacy tools and error-prone systems struggle to support this transition. Fragmented, out-dated or inadequate HR and payroll tools can reduce your agility and pose a risk.

With an estimated 70 per cent of operating costs coming from salaries, overtime and other compensation2 – any payroll error could be a significant risk to your profitability and growth.

In fact according to Fair Work3, payroll recording

keeping errors account for two thirds of all court proceedings they initiated between 1 July and 31 December 2016 – and the combined value of employer penalties issued for the breaches hit $1.8 million.

Despite these challenges, franchises still struggle with adopting more agile, integrative technology. Why? Forbes3 says the FUD factor – Fear, Uncertainty and Doubt – remains one barrier to adoption. Franchisees can be concerned that new offerings could upset their not-so-agile set-up. Put simply, this often comes down to a “better the devil you know” discussion and keeps franchises from achieving their full potential.

Have you considered how you can better support your franchisees through these challenges and help them to achieve greater business efficiency, stronger compliance and deeper insights?

Efficient time capture reduces costs As franchises implement more flexible workforce models they often start bleeding money due to inaccurate and out-dated ERP and time capture systems. In short, fragmented payroll and HR systems can slow down organisations and make it difficult for franchises to accelerate their growth trajectory.

Automating error prone manual processes for collecting and tracking employee time boosts efficiency and cost savings.

According to analyst Ventana, 62 per cent of companies that integrated their workforce management system to payroll said it reduced their payroll error rate4. Yet IMS Research and Gartner estimate that only between 1.5 to 3 per cent of spending on enterprise software solutions is dedicated to workforce management. This led HR Magazine5 to comment: “most organisations have not

38 BUSINESSFRANCHISOR

yet tapped the potential of comprehensive workforce management. As firms prioritise IT spending for the coming years, workforce management should be near the top of the list.”

Josh Bond, Senior Editor of Modern Materials Handling, writes: “Bad habits are sometimes so well established, that systems proven to dramatically improve labour efficiency seem incompatible with the prevailing culture of an operation6.” While this refers to manufacturing, where time is the very essence of productivity, these words could be equally applicable to franchises in the retail, services, F&B or any sector with hourly paid employees and temporary staff.

Payroll compliance mitigates risk Gaps in compliance can lead to costly errors, penalties and reputation damage that can hurt a franchise. The stakes can be even higher for franchises that employ a wide range of staff covered by a number of different agreements/ awards. Regulations such as leave entitlements, notice of termination and minimum pay rates can vary from employee to employee. In fact 77 per cent of anonymous reports received by FWO were about rates of pay7.

The Ombudsman is also sending a clear message that rogue employers and responsible members of management can be held liable for non-compliance. In 2015-16 the FWO issued 63 per cent more infringement and compliance notices than in the previous year – with 92 per cent of every matter filed in court roping in an accessory, this included a master franchisor, franchisee, directors and human resource managers7.

Bruce Drewett’s experience with Time Capture/Time and Attendance systems spans several decades, across a variety of industries. He has led and managed numerous projects for organisations of all sizes, including franchise businesses. In his current role at ADP Australia, Bruce focusses on helping businesses implement time capture solutions that reduce payroll fraud and increase compliance – while enabling greater operational efficiency.

Most employers want to do the right thing.

Problems often arise because franchisees and those in charge of their payroll or human resources have a limited understanding of the application of Australian workplace and taxation law – which is often not their area of expertise.

Having timely guidance and accurate payroll processes frees franchisees – so that they can focus on contributing more strategic value to their business.

Accurate insight drives dynamic rostering Like every small business owner, franchisees have to balance the demands of daily operations while also planning for growth. Most franchises do not have a trusted HR advisor to turn to, making running a successful franchise tough. Franchisors can help their franchisees make better business decisions – especially with regards to teaching them about the value of capturing, understanding and interpreting their workforce data.

Australian taxation laws are also complex and subject to change. The recent enactment of the Budget Savings (Omnibus) Bill 2016 made Single Touch Payroll (STP) a legislative requirement in Australia. Not since the introduction of Pay as you go (PAYG) in 2000, have we seen a piece of legislation with such a significant impact for employers and employees.

According to an influential article in HR Magazine8, “With an automated approach to workforce management, more data and context can be put in managers’ hands, creating better decisions. Being able to assign the right people, with the right skills, at the right time, and at the right cost directly supports an organisation’s ability to respond to fluctuating production goals without compromising quality. Aberdeen Group indicates that organisations using automated staff scheduling solutions have a 4 per cent higher workforce utilisation on average – an edge that creates substantial productivity gains.”

A breach also has another painful cost for franchisors: significant reputational damage.

The 24-hour news cycle and social media is ready to put any business that breaks the law under the spotlight. Every last detail can be picked up and shared across the world within seconds.

Aberdeen Group research9 reported that organisations achieving best-in-class performance in workforce optimisation see an 11 per cent year-over-year improvement in employee satisfaction, compared to just 2 per cent for all others. The use of automated time & attendance and scheduling solutions results

in 8 to 20 per cent lower replacement costs (as a percentage of annual pay) for hourly workers, which can be attributed to the reduced cost of administration needed to manually manage such functions. Average revenue per full time employee also increased four times in organisations with automated absence/leave management technology.

Starting or growing a franchise business should be a very exciting venture, but if you are unsure where to find the answers, the process can quickly become stressful and confusing.

Franchise organisations who offer timely support help their franchisees navigate these challenges with confidence and build stronger businesses.

ADP has worked with Australian businesses for over 35 years and has over 7000 clients. Globally, the ADP group is one of the largest providers of Human Capital Management and payroll solutions, with over 610,000 clients.

For more information contact ADP via: 1800 000 729 Franchisers.ANZ@adp.com www.adppayroll.com.au Sources ‘$146,000 in penalties imposed in precedent-setting Court judgment against Yogurberry chain’, 3 November 2016, Fair Work Media Release

1.

2.

3.

The advantages of workforce management’, 2014, HR Magazine

‘New app, heavier penalties reinforce record-keeping as core business’ , 21 March, 2017, Fair Work Media Release

4.

5.

‘Payroll Management Benchmark Research’, 2014, Ventana Research

Sambartolo, M. (2014) ‘The advantages of workforce management’, HR Magazine Bond, J. (01 Dec 2012) ‘Labor management systems: The (very near) future of LMS’, Modern Materials Management

6.

7.

Fair Work Ombudsman Annual Report, 2015-16

8.

Sambartolo, M. (2014) ‘The advantages of workforce management’, HR Magazine

‘Total Workforce Management 2013: Absence Management’, 2013, Aberdeen Group

9.

BUSINESSFRANCHISOR 39

Barbara West

The Centrality of Culture Barbara West, PhD. has spent more than 20 years lecturing, writing and consulting in intercultural communications. She is currently the Director of Training at Culture Works and an instructor at both the University of Melbourne and CQU-Melbourne. Prior to co-founding Culture Works, Barbara was an Associate Professor of International Studies in California. She has published four books and dozens of articles.

At Culture Works we have more than 10 years’ experience working with companies and individuals to facilitate their understanding of the cultural aspects of doing business, both at home and abroad.

We assist in improving intercultural communication, developing intercultural competence, depersonalising the frustration of cultural differences, fostering, maintaining and deepening relationships with others, managing expectations and getting on with the business of international and intercultural business.

Probably the most important intercultural difference Australians experience both overseas and with people who weren’t raised and educated in Australia is the fairly radical orientation to hierarchy and equality in this country. This is not to say Australia is an equal society! Far from it. However, in the vast majority of the world, position or status are an important and overtly demonstrated aspect of most human relationships. For example, the use of Professor and Doctor, Mrs., Mr. and a host of other titles, even ma’am and sir, is expected and even required in many professional

40 BUSINESSFRANCHISOR

contexts in order to show respect. Conversely, in Australia, position and status must be quietly communicated, if at all, in order to maintain smooth, collegial work relationships. Even the boss must be seen as ‘one of the team’ and willing to participate in friendly (often mildly insulting) banter, Friday drinks, and other social events. Similarly, if I need my North American, South African, Asian or European assistant to do something for me, say I need photocopies, I need to state quite plainly: “Please make these copies, now.” However, in Australia, the need to covertly convey hierarchical status requires much more indirect language: “When you have time, could you make these copies for me? It’s very important. The meeting is coming up.”

If I had said all that to my more hierarchical assistant, they wouldn’t make the copies!

They’d have heard: “When you have time…” and assumed the task wasn’t important enough to bother with yet.

As a result of these cultural values differences, many people who relocate to Australia for work are experienced in this country as bossy, pushy and rude. Conversely, Australians overseas are often experienced as overly casual and informal, unable to take directions and disrespectful. Neither of these sets of judgements is accurate from the others’ point of view, but without taking culture into account, a jump to judgement frequently trumps the

response: ‘Interesting cultural difference, what’s the other person’s intention?’

Understanding how our behaviours arise from our conscious belief systems, and how these belief systems are further based on an unconscious pattern of cultural values orientations, is one of the first steps to achieving successful, non-judgmental interactions with those who differ from ourselves. Another important piece of this intercultural puzzle is coming to grips with the important truth that understanding a person’s words may not mean you grasp any of their meaning. If they are delivering their message in high context language, in which ‘the point’ may be delivered through stories, metaphor or even in contradiction to the words used, your own expectation for low context, word-focused communication may lead you to miss ‘the point’ entirely.

These cultural values and communication style differences are evident to some degree in almost every workplace in Australia, but the ‘interesting cultural differences’ are multiplied several thousand times when you begin the process of expanding your brand overseas. Our first piece of advice for this situation is to begin with the systemic aspects of your offshore site.

In many regions of the world, it just isn’t enough to understand your market niche. You need to learn as much as you can about the history as well as the political, social, economic and legal systems of your site. Do as much preparation as you think humanly possible in terms of research and training. And then do some more.

Many companies prepare themselves fully for the finance, sales, marketing, logistics, supply chain, etc. sides of their overseas business experience, but fail (or struggle) anyway. Having never thought to learn a few words of the local language or find out about local holidays,

customs and history these companies are

that silently power overt systems and

giant Enron’s mid-90’s foray into the Indian

perceived in many parts of the world as trying

processes. Make sure you are clear about

market with local subsidiary Dabhol Power

to continue the arrogant, colonial relationships

the communication and negotiation styles

Company was ruinous because of the very

of the past. This perception, regardless of your

favoured by everyone who will participate in

different cultural expectations for the length

intentions, is one sure way of making your

your overseas expansion processes, including

and nature of the contract negotiations. On

overseas expansion much more difficult than it

yourself. Take the time to discover the relative

the US side, Enron executives were concerned

need be, if not impossible. So, do your research,

importance of hierarchy, orientation to time

with time frames and getting the contract

or pay someone who is an expert in this area

and degree of formality of everyone involved

signed as quickly as possible. On the Indian

to do it for you, and talk to people who have

as well. Understanding the logic frameworks

side, the Maharashtra state government came

experienced living and working in that area.

that underlie each side’s conscious belief

under intense criticism from its own people

Learn a few words of the local language, even

systems and overt behaviours may seem like

for the haste with which it entered the deal

if your partners, agents or networks all speak

an impossible task. But discussing the cultural

and the perception that local interests had

English or you will be using a translator.

context of your new venture with an expert

been ignored, sold or simply left unprotected.

The second kind of learning process that

is just as important as discussing the tax

success requires you to undertake to prepare yourself for working and/or trading overseas

structure. Would you make this move without talking to accountants and lawyers? The same

The deal was ultimately cancelled because of these Indian concerns. The lesson, of course, is that the typical Western interest in speed

requires becoming familiar with the more

is true of your cultural consultant.

cognitive aspects of your own and your

For many, the ramifications of not doing so are

cultural expectations of their Indian partners

partners’ cultures – the operating systems

disastrous. For example, the former US energy

cost the company millions, if not more.

and Enron’s negotiators’ inability to adapt to the

BUSINESSFRANCHISOR 41

While Enron and Dabhol’s negotiators clearly differed on their cultural values orientations, they may also have found that their common language did not mean ease of communication, or even any form of communication at all. We frequently work with clients who begin the process of overseas expansion standing by the belief that their overseas partners’, brokers’ or translators’ ability to speak English means that they do not need to prepare for extremely different communication styles. The lucky ones learn before it’s too late that this is often not the case. The differences between the linear and direct styles of communication favoured in the West and the circular and indirect styles favoured in much of Asia are enormous and can lead to significant frustration on both sides. In addition, Westerners tend to be much more idea-focused in their communication than many Asians, including those from the subcontinent, who favour a more person-focused, face-saving communication style. All of these differences lead Westerners to ask Yes-No questions and to expect ‘honest’ or ‘true’ answers…and when they hear ‘Yes’ … plus a story explaining why the answer is really ‘No’ … they walk away frustrated that their Asian partner is ‘lying’ to them. This interaction is equally frustrating on the other side. Having clearly communicated with a story that the answer is ‘No’, the Asian partner is left wondering why their Western partner isn’t listening, or perhaps is too childish

42 BUSINESSFRANCHISOR

cultural values and communication style differences are evident to some degree in almost every workplace in Australia, but the ‘interesting cultural differences’ are multiplied several thousand times when you begin the process of expanding your brand overseas.” to understand polite business communication.

One way to avoid the difficulties associated with both these cultural values and communication style differences is to use local mediators, informants, partners and/or brokers whenever possible. No matter how comfortable you are with the local language and culture, you cannot beat the experience of local knowledge and the goodwill you will gain from this association. And remember that local really means local, not just national. There are vast differences between doing business in different regions of the USA, China, Japan, Germany, the UK and most other countries. Bringing a Texan with you to negotiate a deal in New York or Los Angeles may be as disadvantageous to you as doing the deal yourself. The differences between Tokyo and Osaka can be as distinct

as those between Melbourne and London. In addition, getting some training in both hearing and using different communication styles may be able to ease a world of pain. An investment of a few thousand dollars in training can often lead to millions of dollars (or more) in profit and goodwill later on.

In conclusion, focusing on the intercultural aspects of your business should not be seen as a ‘nice’ addition you take on in order to tick a diversity training box or to help your staff or customers who are different from you. They should be seen as central to the financial success of your brand, both at home and abroad.

Barbara West bwest@cultureworks.com.au

Resources at your fingertips!

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

www.businessfranchiseaustralia.com.au

Matt Malouf

The reporting and accountability process to revolutionise your team Matt Malouf is a passionate speaker, author, entrepreneur and business coach on a mission to help fellow entrepreneurs around the world break the shackles of mediocrity and reach new levels of business success.

Reporting and accountability are essential for you to understand what is going on in your business and ensure tasks are getting done at the correct time and to the standard you expect.

Regardless of the size of your business, having your team report to you regularly will be a great measure of their productivity and will inevitably improve yours. Now, don’t stress and think that the reporting I’m talking about is going to be more work. In fact, reporting will be a vehicle that will allow you to: • Motivate your team members to make regular, measurable progress.

• Answer any questions or be clear on where your team needs your assistance.

• Invite your team to provide suggestions and give feedback on what is working and not working.

Without an effective reporting process in place it is quite challenging to understand if your team is doing a good job and moving in the right direction. This then leads to many unnecessary conversations and emails so you can understand what is going on. This takes a

44 BUSINESSFRANCHISOR

lot of time and can be quite frustrating. You may feel out of control and uneasy instead of feeling in control and clear about what is going on in your business each day.

A good reporting rhythm is essential. I recommend three key reports : Daily, Weekly and Monthly - to provide you with clarity about what each person is doing and responsible for, along with confidence that these tasks are getting done when you need them to be done.

Daily reports The daily report is designed to give you an understanding of what your team member has achieved during that day. The report answers three questions: 1. What did you accomplish today?

2. Did you achieve everything that was scheduled to be completed today? (If no, please list what wasn’t completed and why it wasn’t completed).

3. Is there anything you need help with or do you have any questions?

These questions are designed to keep your people focused on the specific tasks that have been assigned to them and also ensure that they are performing their assigned tasks in a timely fashion. It also allows for open dialogue on a daily basis to ensure that tasks and projects are moving forward and aren’t delayed because of you.

Weekly reports The weekly report is designed to be a summary of the week’s activities. Each person needs to report on the success or failure of achieving their key responsibilities and report to you their weekly KPIs. This report will also include answers to the following six questions: 1. What was your brightest moment of the week?

2. What was your biggest challenge of the week?

3. What did you learn in the last week?

4. Based on the week gone by I believe we should STOP DOING …

5. Based on the week gone by I believe we should START DOING …

6. I need your help with …

This report will form a good part of the agenda for your weekly meeting you have with your team. The report is designed to allow you to gauge how each person is feeling throughout their work week, together with giving you valuable feedback and ideas on how to continue to grow and develop your business.

Monthly reports The monthly report is designed to be a mini 360-degree assessment of the person’s performance. The team member will list each task that has been assigned to them, the

frequency of the task and the importance of the task. They will then list the date they were trained in the task and who trained them. The person completing the report will then give themselves a score out of 10 on their ability to complete the task with 100 per cent confidence and trust.

1

Set clear expectations. Your people can only be accountable to the level to which they

understand what is expected of them. Hence it is important to be clear about the outcome you desire, the time frame you require this to be completed, and whether you require them to follow a specific system to achieve the outcome

This report will then be submitted to the team member’s direct manager (this may be you or somebody else) for them to assess. Once the assessment is complete, it is essential that a meeting occur to discuss the assessment score variances and how these will be rectified. This will often involve retraining or further system development.

or they can choose their own adventure.

Accountability

you desire, it is important to establish some

Accountability often gets confused with someone taking the blame for something.

This is not what we are talking about here.

Accountability is in my opinion, about delivering on a commitment. It’s being answerable or responsible to someone for something. It is essential to your ability to stop doing the tasks on your list that someone becomes accountable for the task or activity.

milestone check-ins and progress reports to

In order to achieve this it is essential to implement the following five steps:

times require some tough conversations, but

2

Arm them with the tools of success. Make sure your people are trained and have all

the tools they require to achieve the desired outcome; otherwise you are setting them up to fail.

3

Create a simple scoreboard of performance.

While you may discuss the specific outcome

enable you and the person performing the task or project to clearly understand whether they are ‘winning’.

4

Conduct constructive feedback sessions.

Open, honest and constructive feedback

is essential to ensure your people understand how they are performing. This is made easier by implementing steps 1 to 3. This will at remember the only way for your people to get

better is for them to understand what they need to improve.

5

Establish clear rewards and consequences.

Most accountability is ineffective because there are no clear rewards or consequences for following through on what you said you were going to do. If a person has succeeded then they should be rewarded in some way.

This could be a simple as acknowledging their achievement, or if they prove themselves over time it may lead to a promotion. If they have not followed through and delivered on their commitment, and you feel confident you have set them up to succeed, then you might need to consider assigning the task or activity to someone else or perhaps even moving the person on.

While this may seem simple to follow and execute, this simple five-step process is often neglected. Please take the time to understand and implement this - you will be amazed at how quickly you see a positive return.

Edited extract from The Stop Doing List (Wiley $27.95) by business strategist Matt Malouf, now available where all good books are sold.

For more information on Matt Malouf visit www.mattmalouf.com.au

BUSINESSFRANCHISOR 45

PAUL BROADFOOT

Battle strategy

Innovate the way you work, not just your products and services Are you a leader in your industry that prides itself on coming up with new products and services?

our business model!’? How do you think that’s

which new weapon or product to launch and

going for you?

failing to fend off attackers as a result. It’s not

My bet is you’re struggling to change, struggling

enough anymore to focus just on innovating

to gain market share, struggling to move ahead

your products and services for three reasons:

Do you dedicate time, resources and countless meetings kicking around catch-cries like, ‘We need to disrupt our market before someone else does!’, or ‘We need to innovate fast like a startup!’? What about, ‘We need to innovate

to market. Your decades of optimisation and

46 BUSINESSFRANCHISOR

of your competition, struggling to beat startups efficiency-led thinking now seem distinctly old and slow – and that’s because, well, it is. That’s

1. It’s not easy to consistently come up with new cut-through products and services; 2. It’s no longer a guarantee of success in a

why you’re trapped hunkered behind your castle

market that is changing faster than all current

walls, spending hours discussing what to do,

generations have ever seen; and

3. When under siege, a company has limited ability to focus on innovating new weapons or strategies whilst also repelling attackers.

Just ask Nokia, Blockbuster, Kodak, Sharp, Palm or Payless Shoes – once giants in their market, they were defeated by industry shifts, new business models and superior battle strategies. Australian organisations in particular have scant track record of successful largescale commercialisation of innovation. We are languishing behind global standards. We have little evidence we are ready for the pace of change we need to stay relevant. We are in desperate need of a fast hack.

New times call for new ways So, the question everyone in a large enterprise is asking is: ‘How do I do what Uber, Airbnb or Netflix have done?’

Well let me tell you this: • When Uber made a dent in the taxi industry, they didn’t invent cars, passengers, or location-based technology on phones.

• When Airbnb offered the world people’s spare capacity in their homes, they didn’t invent the rooms, the guests, or internet bookings.

• When Netflix first launched their mail order DVDs, then their movie streaming, they didn’t invent the DVDs, the content, or digital downloads.

These startups didn’t innovate a product or service. They innovated the way they worked – and they used technology to help them do so. When technology shifts forward, it enables new business models. These new business models can innovate the way industries work, the way companies work and it’s this market innovation that we are seeing a lot of right now. One tell-tale sign of market innovation is when companies enter spaces where they have no traditional footprint, or when startups change the prevailing way business is done in an industry. In each case above the proponents flipped prevailing industry norms.

• Uber flipped making a phone call to order a taxi and the guesswork associated with the arrival time.

• Airbnb flipped having vacant rooms in homes and the impersonal nature of hotel stays.

• Netflix flipped having to go to a bricks and mortar video store to rent one or two titles,

Paul Broadfoot is an entrepreneurial strategist and the author of Xcelerate: Innovate your Business Model, Disrupt your Market and Fast-hack into the Future. He works with enterprise executives, next level leaders and intrapreneurs to identify high-growth opportunities and create new business models in times of rapid market change.

You are better off working out how to utilise new technology to change your business model than you are working out how to invent the next product or service mousetrap.” get in the car to take them back or incur late fees if you didn’t.

Sure, inventing the next Tim Tam, Walkman, iPhone, 3D TV, Viagra or Alexa AI assistant product sensation would be great for your organisation, but how many of you are in that game and winning?

Professional services businesses out there now have online doctors (GP2U), Ross the world’s first artificially intelligent lawyer, AI Accountants and Robo Advisors for investing.

There are only going to be a handful of companies that benefit from the invention piece of these technologies. The rest of the world must innovate the way they work by using the new business models they enable.

You are better off working out how to utilise new technology to change your business model than you are working out how to invent the next product or service mousetrap.

Shift your thinking Any corporation that wants to have a future must get better at fast market shifts. You have to spend time innovating the way your company works, which you do by using what I call the Xcelerate framework: • Business model – what’s your incomegenerating asset and activity (one of 24 types in today’s market) e.g. digital: distribution?

• Revenue model – how you charge your customers e.g. own or rent? How many parties involved?

• Communication model – the way you go to market e.g. face to face or word of mouth?

• Differentiation model – the way you differentiate from your competition e.g. price, product or service?

You must disrupt your own thinking and learn to innovate the way you work if you want to be a successful organisation that stays in the game.

The only question you have to ask yourself is: ‘Are you ready to take on that challenge?’

For more information contact Paul via: paul@paulbroadfoot.com.au www.paulbroadfoot.com

The product innovation problem To understand the difference between innovating a product or service, and innovating the way you work, let’s look at a classic Apple example: 1. when Apple launched the iPod it launched a new product - aka a new weapon 2. when Apple enabled music downloads, they changed the prevailing way the music industry worked, thus they created an entirely new battle strategy.

Many of today’s most successful companies have not invented anything; they are just changing the way things are done; strategy not weapon.

Will your company be one of them?

BUSINESSFRANCHISOR 47

Franchising Expo

Expand your network at the Franchising Expo Following an actionpacked show in Sydney and a sellout event in Perth, the Franchising & Business Opportunities Expo will open its doors in Brisbane in July and then Melbourne in August.

“Now in its 30th year, the Franchising Expo is appealing to more and more people interested in franchising wherever we hold the show – be it in a small-scale format inside the beautiful Astral room at Crown Perth, or our biggest and busiest show at the Melbourne Exhibition Centre,” says Exhibition Manager Fiona Stacey.

First-time exhibitors Kath Angus and Casey Dunlop from Begin Bright

“Visitors come because they love the idea of seeing so many different concepts under the same roof, and also hearing from the experts in the free seminar series,” she explains.

“Exhibitors keep coming back because there is no better way to grow their business and target prospective franchisees.”

sure what to expect – but on the first day we

Regular exhibitor Evan Foster from United Franchise Group explains that participating in the Franchising Expo is a major part of the company’s marketing strategy.

exhibitors. “The Franchising and Business

“We have built our company by exhibiting at Expos all over the world,” he says. “We had three franchise brands exhibiting in Sydney plus our consultancy, and all did very well in terms of quality leads.” Foster adds that he is looking forward to introducing their new brand Venture X and the rebranded Fully Promoted to the Brisbane and Melbourne markets.

For new exhibitor Kath Angus from Begin Bright, the Sydney Franchising Expo was a real eyeopener. “It was our first show so we weren’t

48 BUSINESSFRANCHISOR

were so inundated, we had to call in more staff for Sunday,” she says. “It was four deep at one

Hombre Mexican Cantina. I can only imagine where this dynamic and growing company is headed.”

stage, which was amazing!”

Fiona Stacey adds that both new and established franchisors find the Expos a great source of support and advice from fellow Opportunities Expo is an event where the industry comes together to educate, inform and network – it’s the highlight of the year for many franchisors.”

Over the years Stacey says she has seen many companies start small and grow big by finding the right franchisees at the show.

For information about exhibiting in the Franchising & Business Opportunities Expo contact Fiona Stacey at: 03 9999 5464 Fiona@specialisedevents.com.au.

Readers may register now for a free ticket to the Franchising & Business Opportunities Expo in Brisbane or Melbourne; go to www.franchisingexpo.com.au and use code BFM.

“It’s exciting to see businesses that grow from

Diary Dates:

a couple of outlets to a thriving network, just by

Brisbane: 22-23 July Brisbane Convention & Exhibition Centre, South Bank

keeping a high profile at the Franchising Expo,” she says. “This year we are thrilled to have new player Franchise Retail Brands showcasing their exciting brands Dessert House, Sabatinis, 1582 Coffee, Crave Ice Creamery, New York Slice and

Melbourne: 26-27 August Melbourne Exhibition Centre, South Wharf

Looking to expand your business?

This is the place to find new recruits

franchising & business expo opportunities

Stand bookings now open!

Sydney March Perth May Brisbane July Melbourne August franchisingexpo.com.au

ENDORSED BY

Adrian Richards

Unlocking growth through effective Local Area Marketing what a franchisor should know The era of Local Area Marketing has arrived.

The effectiveness and efficiency of mass marketing is diminishing as more choiceful, demanding shoppers have access to brand and business information at their fingertips.

Additionally, digital technology is facilitating more targeted and customised interactions with local shoppers.

This gives franchisors a unique opportunity to empower their franchisees with the tools and confidence to execute Local Area Marketing brilliantly, engaging local prospects and converting them into buyers. And if every franchisee can increase their local business, franchisors will see an improved commercial return.

So it is crucial to understand the key local area marketing challenges facing franchisees and what franchisors can do to help turn these challenges into growth opportunities.

Challenge 1: Understanding local customers A franchisee may have relevant industry experience or have worked locally, and is likely

50 BUSINESSFRANCHISOR

Adrian Richards has over 20 years’ marketing experience and is a Managing Partner of The Station Agency, one of Australia’s leading Shopper and Local Area Marketing consultancies. He heads their Local Area Marketing team in developing and managing a range of marketing programs for clients including Toyota and Lexus.

to have a ‘gut feel’ on the type of customers they are selling to. However they often lack a comprehensive understanding of who lives in their primary marketing area (PMA), which customer types they should be prioritising, and the buying behaviour of these customers.

This can lead to them executing generic marketing campaigns that fail to appeal to specific audiences, or are targeted at the wrong types, and therefore don’t deliver a return on investment.

or students. For Toyota, working with regional

It is crucial that the franchisor gives franchisees a clear understanding of their local audiences to help them answer the following questions:

Demographics: who are they, where do they

Who are my local customers and how can I engage them?

Lifestyle: how do they spend their time, what

A crucial start point is for the franchisor to provide a local population analysis, highlighting the audience make up of the PMA. However, in addition franchisees need a deeper understanding of the primary audiences they will be selling to, be it young families, professionals

marketing teams, we delivered 150 of their dealers a deep analysis of their PMA, and data, insights and strategies on their most important audiences. This has led to a more targeted approach by dealerships, more effective LAM campaigns and reduced wastage of marketing spend across the network.

For each audience, franchisees should be given clear data and insights into: live, what do they do, what is their financial status? motivates them and what role can we play in their lifestyle? Using this information we could develop time of year, week or day offers that tap into the audience’s mindset at that time.

Interests: what are their passions, and how can we tap into these to provide motivating reasons to choose our business? This helps franchisees

create partnerships, events, promotions and offers that generate new local customers.

being the biggest marketing cost facing

offer a great opportunity to reach and engage

franchisees, it’s crucial that they are given

locals. A stronger customer relationship can be

How do I target them effectively?

guidance on the right channels.

built by tapping into audience lifestyles.

The information franchisees need includes:

Community and Sponsorships: help

Media consumption: which channels are the audience using most frequently, at what time of day, and how can we cut through in these channels? Where possible, this information should be localised to the PMA and cover community and cultural media. With media

franchisees understand if this audience is likely

Database and Social Community: many

to participate in community initiatives and how

franchisees will look to generate a database

they spend their leisure time. If they like to visit

of customers they can market to in the future,

cultural events, play sport, participate in the

but will need guidance as to how to do this and

arts or enjoy the outdoors, then sponsorships

how to then leverage this database to drive

or other initiatives that tap into these passions

frequency of purchase and long term loyalty.

BUSINESSFRANCHISOR 51

Very few franchisees have a marketing background and identifying and implementing local area marketing activity can be a daunting prospect for them.”

The tools and assets franchisees need include: ‘How To’ Guides and Handbooks Franchisees need clear instruction on how to implement Local Area Marketing activity.

If the franchisor can provide simple to follow guides, checklists and measurement tools, it can make a huge difference to effective local execution, giving franchisees the best chance possible of generating incremental revenue

Additionally, it’s often crucial to create a social community for the business, so guidance on the relevance of platforms like Facebook and Instagram, instructions on how to build social communities and crucially, how to then engage locals through them give franchisees the knowledge to engage their locals effectively.

We performed a digital and social health check for one franchise network and found that by implementing just a few simple strategies franchisees created an average 40 per cent plus improvement in their reach and engagement on these channels.

Challenge 2: Franchisees lack capability and confidence in marketing Very few franchisees have a marketing background and identifying and implementing local area marketing activity can be a daunting prospect for them. With so many marketing channels to choose from, it’s no surprise that many franchisees take a risk-averse approach and keep their marketing dollars in their pocket.

Improving the marketing capability of both key franchisor staff at a regional or local level, and the franchisees themselves, is crucial to ensuring that franchisees are given the knowledge and guidance to confidently invest in activities that will generate customers.

There are three key aspects to this: Proof of Success National and Regional stakeholders should have a clear understanding of the most effective local area marketing strategies for the customer groups their franchisees are targeting. What will work well to engage retirees is unlikely to appeal to students or tradies. Partnering with franchisees on trialing a range of different campaigns with different customer types and measuring the results will give the franchisor

52 BUSINESSFRANCHISOR

team the ability to guide franchisees on the correct LAM strategies for their business and provide proof that these work.

from their campaigns. Toyota dealer feedback

Local Area Marketing Training

more targeted campaigns being executed. One

It is crucial that franchisees are trained in Local Area Marketing, and that this process is ongoing to reflect the latest industry trends and opportunities.

dealership generated a Return On Investment

Training should be tiered if possible to ensure groups of franchisees with similar capabilities can participate and improve their knowledge and capability together. Ideally, training would cover how to tackle common local area marketing challenges, with solutions created by the franchisees themselves. They would then be trialed in relevant PMA’s and if successful, turned into toolkits by the franchisor for the whole network to utilise.

These assets should cover campaign material

Two Way Communication Finally, there needs to be strong communication between franchisor and franchisees to ensure that not only do franchisees have access to support when they need it, but also that feedback is generated from franchisees on the implementation and success of campaigns to assist in evolving solutions that generate even better results in future.

Challenge 3: Franchisees need tools and assets they can leverage for their Local Area Marketing It is vital that franchisees aren’t left to their own devices when it comes to developing Local Area Marketing activity. Outside of communicating clear brand compliance criteria for all marketing to franchisees, the franchisor also has a crucial role to play in giving franchisees the marketing tools to execute best practice campaigns.

on the tools, checklists and instructions we created for CRM is that they have led to much

(ROI) of 4,000 per cent from an eDM targeting lapsed service customers!

Customisable campaign assets for all applicable media, in a variety of sizes, to ensure a fully integrated range of activity can be executed in market. By making these assets customisable, including messaging and background visuals, franchisors can ensure that specific groups can be targeted effectively at a local level, especially when the material provided includes guidance on specific messaging and visuals to target key groups such as teens or mums with young children.

Summary Franchisors have a crucial role to play in giving franchisees the training and tools they need to ensure that they are confident in investing their own marketing dollars. Only with a long term commitment to supporting franchisees can franchisors be sure that the era of Local Area Marketing will be leveraged to create a win for all stakeholders.

The Station Agency are a Sydney based full service marketing consultancy specialising in developing ideas that convert shoppers into buyers, and have a wealth of brand, shopper and local area marketing experience.

Adrian Richards, The Station Agency 02 8038 4900 adrian@thestation-agency.com www.thestation-agency.com

CELEBRATING OUR 11TH YEAR of the

AUSTRALIAN & NEW ZEALAND BUSINESS FRANCHISE GUIDE The Franchise Guide is an annual handbook for potential franchisees and is a source of guidance and information from some of the most respected names in the industry.

Distributed across Australia and New Zealand, the Guide is sold in main and independent bookstores as well as digitally through Apple and Android apps.

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Providing a step-by-step guide, each chapter in the book is authored by an industry expert and answers the most common questions posed by the potential franchisee with suggested ideas and advice.

“One of most qualified books throughout the world” • Up to date and relevant information • A must read for potential franchisees • Don’t miss out on your specialised section • Distributed by the Franchise Council of Australia • Inexpensive way to reach a unique market • Eleventh year running

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ODUCTS

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MADGWICK

S LAWY

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EHOUSE USE WAR ncaster VIC 3108 HAIRHO Road, Do 0 060

- 133 -

- 159 -

Gabrielle Dolan

Gabrielle Dolan is an author, speaker and founder of Jargon Free Fridays. Her current book Stories for Work: The Essential Guide to Business Storytelling is available now in store and online.

54 BUSINESSFRANCHISOR

Why sharing stories can build customer loyalty Oxytocin is also often referred to as the ‘trust hormone’. Our bodies release it when we are with people we love and trust, when we hug, or even when we shake hands in a business meeting. And it’s released when we listen to stories. Oxytocin being released signals to the brain that everything is okay and it is safe to approach others - essentially that we won’t be attacked or eaten, as would have been the risk back in the day.

So, not only does a good story make us feel different emotions and a connection to the storyteller but at the same time, the love hormone oxytocin is also signalling that we can be trusted and therefore strengthens the connection.

Fundamentally this is important because emotion impacts our decisions. Decisions such as ‘Do I buy from you?’

Storytelling is emerging as a powerful and effective way to build customer loyalty. When we listen to stories, different areas in our brain are stimulated and an emotional response is provoked.

Good stories make us feel something as we listen to them — excitement, anger, sadness, empathy or enthusiasm. Our emotional reaction can mean we feel something towards the person telling the story, which helps create connection and in turn can lead to loyalty.

In the 2014 Harvard Business Review article Why your brain loves good storytelling, neuroeconomist Paul Zak revealed the powerful impact the love hormone oxytocin has on the brain when we tell stories.

Suffice to say storytelling is a powerful tool when making a connection with another person. Essentially, well-told and purposeful stories initiate an emotional response and lead to greater levels of trust and loyalty.

One company that does this brilliantly is New Zealand based shoe company Merchant 1948. They have a section on their website titled Stories, which includes a collection of anecdotes from the founders; examples of stories about their grandparents, stories about their employees and stories about their products. When I first came across their website I was so impressed with their authentic use of storytelling and their stories that I went to a store the very next day and brought a pair of shoes.

Georg Jensen also have a section on their

Marketing executives and advertisers are acutely aware of the power of using storytelling and emotion in business to drive purchasing decisions. A study of over 1400 marketing campaigns submitted to the UK-based Institute of Practitioners in Advertising (IPA) rated how effective marketing campaigns were, based on profit gains. The results showed:

website specifically for stories. It features five

• campaigns based purely on emotion rated as 31 per cent effective;

much of you’ which is captured in a summary

• campaigns based purely on logic rated as only 16 per cent effective; and

http://www.georgjensen.com/en-au/

• campaigns that combined emotion and logic rated as 26 per cent effective.

Humans relate to stories. A well-told story will

This research indicates that using logic alone has the least impact and using emotion has almost double the impact.

with your audience. So, if you want to increase

For more on this research, go to www.neurosciencemarketing.com/blog and search ‘emotional ads’.)

stories.

leading females in their field including a chef, a comedian, a film director, a world champion boxer and a motor cross rider from Iran (where women are banned from riding motorcycles on the road). Interestingly, each story has minimal text as it is shared via a video. The overriding theme of the stories are ‘You can never be too video that features all five women. campaigns/youcanneverbetoomuchyou lead to greater engagement and connection customer loyalty, consider how you can start to share authentic, appropriate and relatable

www.gabrielledolan.com

BUSINESSFRANCHISOR 55

FCA

NATIONAL FRANCHISE CONVENTION 2017 Keynote speakers Keynote speakers sharing their inspiration and expertise at NFC17 will include: RAY TITUS (USA)

NATALIE BRENNAN

Founder & CEO - United Franchise Group

Fca - Franchise Woman Of The Year 2016 Head of Corporate Brand Support FoodCo, Natalie started her career in the Franchise sector at almost 15 years old; now some three decades later she’s still passionate about franchising and paving the way for other women in this sector.

Natalie spent the first 10 years of her career in Operational Training roles with multi-unit operations including Collins Foods, Power House Hotels and the Billabong Group. She has since trained thousands of people, leading, mentoring and inspiring along the way.

Ray Titus is the CEO of United Franchise Group and its affiliated companies. Mr. Titus is a life-long entrepreneur who began his career with his father, franchising legend Roy Titus, and went on to develop a group of successful brands and franchise development services. The company has over 1,400 franchisees in more than 80 countries with the brands.

DR HUGH BRADLOW

STEVE SIMPSON

Chief Scientist - Telstra

International speaker, Author and Consultant – UGRs

Dr Bradlow is President of the Australian Academy of Technology and Engineering, and Chief Scientist at Telstra Corporation.

In the latter role, he acts as a “forward scout” looking at the longer-term technology directions and technology disruption that will impact Telstra and its customers.

Steve Simpson is an international speaker, consultant and author. Described by UK based e-Customer Service World as ‘Australia’s leading corporate culture authority’, Steve has created the concept of UGRs® which is receiving global acclaim as a tool to understand and improve organisational culture.

Prior to becoming Chief Scientist, he was Chief Technology Officer and Head of Innovation at Telstra, responsible for the introduction of new technologies into Telstra’s business.

The keynote speaking program will be supported by franchisor expert concurrent streams and in-depth round-table sessions.

BOOK YOUR EARLY BIRD NFC17 TICKETS NOW

ACCOMMODATION

Early bird tickets will only be available for a limited time. If you are planning on multiple people attending the convention this year, make sure you register early, so you can save even more.

Book your accommodation at RACV Royal Pines Resort now to avoid disappointment as limited rooms are available.

To register visit www.nationalfranchiseconvention.org.au.

56 BUSINESSFRANCHISOR

To book your room please call the reservations team directly on 1800 886 880 or (07) 5597 8700 or email royalpines _ groupres@racv.com.au and mention that you are attending the NFC17.

For more information visit www.nationalfranchiseconvention.org.au For sponsorship and exhibition opportunities, call Angie Cooksey on 1300 669 030, email angie.cooksey@franchise.org.au or visit franchise.org.au

Ross Clayton

Utilising the latest technology to reduce franchise overheads

Whilst the franchising industry in Australia has seen steady growth over the past few years, franchisees are nonetheless being constantly impacted by ever rising costs such as high wages with weekend penalty rates and escalating lease fees.

Now, more than ever, franchisors and franchisees need to work together to adapt their business models to maintain profitability.

The furniture industry in particular has always suffered from the need to have large showrooms; but now, as a percentage of

58 BUSINESSFRANCHISOR

At just 30 years old, Ross Clayton started what would become one of Australia’s most successful furniture franchises, Vast, by re-writing the rule book and putting the heart back into timber products.

turnover, the impact of these overheads is double what it was 10 years ago! This is clearly not sustainable and why it is important for the industry to look at embracing technology as a solution.

traditional approach, allowing us to showcase

The furniture industry is historically a bricks and mortar style business, with retailers showing everything they have for sale on the shop floor.

Technology however can reduce the need for this

options that gives you the option to scan the

our full range of products in ways that can minimise those costs. For example, a store may display a black sofa, with a giant LED screen hanging above it, with the five different colour code and picture it within the 3D image of your living room. Quite a different approach to the traditional method of displaying all five options

technology can come to the fore and help reduce costs.

It’s only a few years ago that most businesses would have had a full time bookkeeper. Plus, most of us also had a separate admin person – handling reception; answering the phone; managing filing; procurement; monitoring fulfilment to customers; the inventory out process. In total there were often three people working full time managing these tasks.

Today we have just one person running these functions thanks to new technology. We have no receptionist as most of our enquiries are sent through email or social messaging, and this is now shared by several staff as and when it occurs. We have converted to fully cloud based systems for all of our all admin tasks, have integrated software to generate our accounts and have tools on our website that alert us and our customers of actual stock levels in different cities… and this all integrates with our own custom CRM tool, which gives us complete visibility into every transaction, and it is all automated.

At Vast we also use a combination of onshore and offshore staff. Alliances can be built overseas that can lead to the development of a solid task force enabling your home team to concentrate on the sharp edge of your business.

The rules are simple. If you can put a process behind something, you can outsource it. Let’s face it there are never enough hours in the day for your existing team, so a scalable (cloud based) workforce is one of the handiest new tricks in the book. in the showroom. As franchisees start to use

This ability to focus on our demographic gives

technology in this smart way this will clearly

smaller marketing budgets a chance to target

decrease the need for larger showrooms

and engage with their customers like never

therefore immediately reducing the rental

before. Sales tracking tools can provide insight

overheads.

into what is working and what is not – ensuring

Furthermore, to combat high warehousing

less wastage or hit and miss approaches.

overheads, clearly there needs to be more

A fully rounded franchisor will be thoroughly

flexibility in terms of both storage and delivery.

across digital marketing, up to speed with the

By looking at other outsourcing options, this

right social channels, on point with their brand

minimises the need for stores to invest in long

and well drilled to give the customer the right

leases themselves, and enables them to only

product at the right price, within an acceptable

pay for the storage that they use pro rata. What

timeframe – all against the backdrop of

a saving!

measurable and accountable exemplary

Getting the back end of your business sorted costs both time and money but it is worth it as your franchisees can then focus on what they do best, and get back onto the showroom and sell.

For franchisees and franchisors that work together and with the new technologies open to us, lots more doors will open rather than close, and then the opportunities to look at increasing market share, and profitability in a challenging market can become a reality.

platforms such as social media, and email

reduce the crippling overheads.

marketing we can market directly to the people

Another common major financial drain for a

Vast Furniture & Homewares is one of the largest growing bespoke furniture brands with stores in 25 locations across Australia and New Zealand. Sustainability is front of mind with the company taking great pride in using recycled and ‘upcycled’ materials throughout their supply chain.

that may be interested in buying our product.

business is in operations and again this is where

www.vastinterior.com.au

Another major area where greater efficiency can be achieved through a more digital approach is in marketing. Today through

customer service.

This ‘brand experience’ will help franchisees meet their profit targets and will gradually

BUSINESSFRANCHISOR 59

Rami Brass

ATO shine spotlight on

customer loyalty programs and fringe benefit tax Employees’ use of business or personal credit cards linked to customer loyalty programs, as well as substantial personal frequent flyer points obtained through business travel, may result in organisations coming under investigation by the Australian Taxation Office (ATO) for providing employees with taxable fringe benefits.

To ensure minimal fringe benefit tax (FBT) exposure, businesses must review their policies if employees accumulate reward points using a credit card or frequent flyer customer loyalty program.

In their review of customer loyalty programs, the ATO has indicated the existing audit selection criteria are not limited to the general understanding of those employees who accumulate in excess of 250,000 points in a financial year. It also includes ensuring arrangements have no commercial purpose

60 BUSINESSFRANCHISOR

Businesses that let employees redeem points accumulated through business credit cards on personal expenditure, as well as employers who use points to reward or incentivise current or potential employees, may leave themselves liable to FBT. ” other than enabling employees to redeem the rewards they would otherwise be entitled to and that employees do not receive points in exchange for financial income.

Businesses that let employees redeem points accumulated through business credit cards on personal expenditure, as well as employers who use points to reward or incentivise current or potential employees, may leave themselves liable to FBT. This also extends to the use of personal credit cards by employees to accrue customer loyalty points when purchasing business goods, the cost of which is later reimbursed by the company. Businesses may also be exposed when former employees, on leaving the company, convert their points for money or other goods.

Ride-sharing services With the disruption of the taxi industry, a significant number of employers are now using Uber and other ride-sharing services for their employees’ travel.

Section 58Z of the Fringe Benefits Assessment Act 1986 (FBT Act), namely the FBT exemption for taxi travel between home and work locations, does not apply to Uber and other ride sharing services due to the definition of what constitutes a “taxi”. Under the FBT Act, a taxi is defined as a “vehicle that is licensed to operate as a taxi”. Therefore the Section 58Z exemption cannot apply, as Uber drivers are not lawfully required to hold a license to operate as a taxi.

Providing eligibility, business leaders may be

Rami joined RSM in 1994 and is a director and national head of tax, RSM Australia with over 28 years’ experience in providing taxation advice and specialist tax consulting services. His experience includes providing income tax and fringe benefits tax advice to various businesses in diverse industries, from non-profit organisations to multinationals.

vehicles are seen to be regularly parked at nonbusiness locations.

To minimise any FBT exposure, employers are strongly recommended to review their ‘no private use’ policies and have controls in place to review an employee’s use of such vehicles.

In addition to local knowledge provided

able to apply for the minor benefit exemption as stated in Section 58P of the FBT Act.

Utilities and dual cabs Utilities and dual-cab vehicles are only exempt from FBT providing the private use of eligible vehicles meets a certain criteria. This extends to travelling between home and work, with other private use needing to be “minor, infrequent, and irregular”. The ATO provides the example of occasionally taking rubbish to the tip.

Employers may be liable for FBT when the

by their advisers in 30 offices across

ATO deems regular private trips made by

Australia, RSM Australia, one of

employees are frequent and regular (although

Australia’s leading professional services

minor) in nature. Common examples include

firms, draws on their international reach

picking or dropping off children on the way to or

and scale to ensure clients stay at the

from work and using the vehicle to do grocery

forefront of the world’s best practices,

shopping. This also extends to driving long

technology and innovation within a rapidly

distances: however infrequent and irregular this

changing global economy.

might be, it is not considered minor.

02 8226 4550

Business vehicles featuring advertising

Rami.Brass@rsm.com.au

materials will not escape scrutiny, especially if

www.rsm.global/australia

BUSINESSFRANCHISOR 61

Gloria Kopp

5 Pointers for Content Marketing

at the Franchisee Level Gloria Kopp is a digital marketer and an eLearning consultant. She graduated from University of Wyoming and started her career as a business writer and an educator, and is now working as a tutor at Online Assignment Help. Gloria is also a regular contributor to websites including Engadget and Huffington Post.

So you run an Australian franchise, and you want to ensure your company has a great online presence.

Measures will need to be taken on a national level, but the activity of your franchisees are equally important.

Your national online presence will show what your company is all about, including your values, services/products, and your mission statement.

Through your franchisees, you will be able to show how your business works at a local level, and use content that is designed to attract and engage customers on a more regional level.

These five pointers will help you maintain a great online presence, and give your company the resources it needs to reach new customers.

1

Encourage Franchisees to Create Content

The first step to getting the best content for your business is encouraging your franchisees to produce their own content. Your franchisees can produce localised content that is designed

62 BUSINESSFRANCHISOR

to reach people all across Australia. This content helps create a reputation – and word of mouth marketing can be extremely powerful.

By using localised content, building links and getting guest posters on board, you will be able to create content that encourages new people to engage with your website and business. If you want to make sure your franchisees are producing the best content, be sure to introduce your teams to online tools like Word Stream (www.wordstream.com), which can help with SEO keywords. Small SEO Tools (www.smallseotools.com) also offers a keyword density checker, to ensure that all content achieves the search ranking they deserve.

2

Have a National Social Media Specialist

Content that appears on search rankings is important, but so is social media. In fact, social media is more important than ever, and even provides a first contact between your business and potential clients or customers.

When you produce high quality content, you need a strong social media presence to promote it. By hiring a national social media specialist, you can provide information to all your branches, and help ensure there is no

miscommunication between those branches.

The national social media manager can provide advice and support to your branches, but it’s also important that the branches have the tools they need to create their own content. Internet Marketing Ninjas (www. internetmarketingninjas.com) offers a popular SEO tool, which can help branches create quality, search-engine-optimised content.

Assignment help also provides real life support from editing and proofreading professionals, which can ensure franchisees produce content your company can be proud of and can be found at www.australianhelp.com.

3

Encourage Franchise Owners to Improve SEO

When your franchise owners produce content, it’s important that they not only ooze quality, but are optimised for search engines. For this reason, you should encourage your franchise owners to improve SEO by managing their word counts and analysing meta data. Easy Word Count (www.easywordcount.com) is a super simple tool that your franchise teams can use to make sure that the content is the right length.

Human services like Do my assignment (www. essayroo.com) can be extremely valuable as well. This is an online service that puts you in

If you want to make sure your franchisees are producing the best content, be sure to introduce your teams to online tools.” touch with professional writers and editors.

sure you outline exactly what kind of editorial

You can encourage your franchisees to utilise

guidelines you expect, what kind of message

this tool and learn from the experts, which will

and story you want to tell, and your goals with

eventually translate into even higher quality

social media and search engine ranking.

content being published on their websites.

If you don’t want your franchisees to hire a

4

writer to create the content, perhaps consider

If your franchisees are focused more on the

can help your franchise owners to write content

Let Franchisees Hire Writers

business and day-to-day side of things, then hiring a writer could be extremely beneficial.

Allowing your franchise owners to hire writers gives them more time to spend on providing the high-quality service you expect from them, and it also means that they’ll be producing extremely good content.

allowing your team to hire writers who can provide an editing and proofreading service. This that sticks to your editorial guidelines, and it also helps your team learn how to improve their content and become more independent in the future.

5

Effectively Track All Branch Content

Before encouraging franchise owners to hire

Finally, remember to have a master sheet that

writers, however, it’s important to set out

tracks all the content your franchisees produce.

some guidelines. Try using Ginger Software

Your master sheet can help you manage all

(www.gingersoftware.com) for a great word

the content that is produced nationally, and it

processing and writing experience. Make

allows you to see how well all your branches

are performing. Your master sheet should have specific information, and so the following columns are recommended: - URL The URL of the article published should be documented so you can quickly see the content produced.

- Notes Next to the URL, you should add notes.

You can make notes about the kind of call to action that was used, the style of the content, and the purpose of it. Also include the author and editor responsible, and you’ll have all the information you need at a glance.

- Name of Website The name of the website should also be listed next to the URL. Remember, not all content you produce will be for your franchisee’s site – your team might produce content for other websites.

- Date Remember to include a date, too. This provides you with historical reference as your master sheet expands.

Bear all of these things in mind, and use popular online writing tools, and you’ll be able to create the best content for your brand on both a national and regional level.

Gloria Kopp

BUSINESSFRANCHISOR 63

Peter Buckingham

Failing to Plan is Planning to Fail!

64 BUSINESSFRANCHISOR

Whilst the title of this article is an oldie, it always remains a truism of life.

From a franchisors’ point of view, it should be one of the stable quotes you roll out time and again to the franchisees at many a conference and gathering, but do you apply the same rules to your own business – in many areas?

I wish to address this in terms of one of the biggest investments your franchise system ever makes – the property portfolio.

Most systems fly or die based on the quality of their stores if they have bricks and mortar retail.

Whether it is in the locations that are chosen within shopping centres, the locations along a

Peter Buckingham is the Managing Director of Spectrum Analysis Australia Pty Ltd, a Melbourne based Geodemographic and statistical consultancy.

Peter is both a Certified Management Consultant (CMC) and a Certified Franchise Executive (CFE) – the only person in Australia with both!

shopping strip, or along a main road, success is often measured by the customer seeing, remembering and visiting your store again and again.

I would like you to ask yourself the questions as far as your property portfolio is concerned under specific headings: 1. How many sites should we have Australia wide?

2. How should these be broken down by major city and regional area?

3. How big are our trade areas, and therefore how far apart do we need to have the stores to minimise cannibalisation to a reasonable number?

4. What areas should be best for our business?

5. Where are the good areas that we are currently not in?

6. Where is the growth of the cities to keep up our representation?

If you can understand the above, and put them into your Strategic Network Plan, a document all senior management are on board with, you should be heading in the right direction.

One quote I always use is to be Proactive and not Reactive in establishing your store network.

Proactive is where you know where you want to go to open stores. Reactive is the Leasing Agent telling you where they have a store for rent!

Let’s start with Australia in 2017 We are expecting the 2016 Census to be released around mid-2017, however we do not have to wait for this to understand the basics of the Australia wide population. The ABS does provide population estimates in five year increments well into the future. The current numbers we feel best represent Australia in 2017 are:

Description

Population estimate

% Australia

Sydney (Newcastle, Central Coast and Wollongong)

5,913,167

24.3%

Melbourne - Geelong

4,793,002

19.7%

Brisbane (Sunshine Coast to Gold Coast)

3,219,558

13.3%

Perth

2,079,462

8.6%

Adelaide

1,276,957

5.3%

Rest of Australia

7,013,944

28.9%

TOTAL

24,296,089

100.0%

If we use these ratios as an indicator for stores or territories, we create some proportion of what we should require in each city to create similar penetration for our brand. Regional areas and smaller cities can also be addressed as required, but may not be able to support the same proportion often due to the tyranny of distance.

How can we measure our trade areas?

It is great saying you can have 100 stores or territories in Sydney, but if this leaves them about 4 kilometres apart, and they actually draw from a large area, then they will be greatly overlapping and cannibalising each other. A perfect recipe for a franchisee dispute and court case.

Some businesses can be very tight. For example, we completed some work for a 24/7 gym. They found that in most cases, around 60 per cent of their customers came from within a two kilometre radius. Logic is you often walk to the gym, or want to have a very short drive.

On the other hand a bulky goods store in say Nunawading (Melbourne) would probably need a eight kilometre radius to cover 60 per cent of their customers.

The way to measure this is to plot the customer’s addresses, and see how far out you need to go to get approximately 60 per cent in the circle. Rough number is that a bit under

twice that distance should be how far apart the stores should be apart.

Much of this can be done by geocoding using computers, and no longer relies on you sticking 1,000 pins into a map, and trying to count them.

What areas should be best for our brand?

In doing a Strategic Network Plan, you want to be opening the stores in the most suitable areas from a demographic point, and maybe never going into the areas of low attraction to your brand, or if so, under careful circumstances.

Knowing your customers can be translated into demographic measurements, and these can then be applied using mapping across all markets, to see the areas of best opportunity.

An example may be an Asian tea brand, and we know it is very popular in Korea, Japan and China. Obviously looking for the areas showing in the census as born in Asia, or high percentage of people speaking Asian languages at home will be better than areas predominantly speaking English at home. All this can be mapped accordingly.

Many brands feel they are best suited to a specific socio economic range, which is quite logical. There is a very broad, ABS provided dataset called SEIFA – Socio Economic Index For Areas that quantifies the area, based around an Australian average of 1,000, and one standard deviation being 100.

BUSINESSFRANCHISOR 65

This score allows us to compare areas from city to city, and still have confidence in its similarity and potential spending powers.

If you know your product sells best in lower or middle areas, then make sure you have them all covered Australia wide. Maybe the example could be cars, and where would you set up Bentley dealerships, BMW dealerships and then Hyundai dealerships? Let SEIFA be the quantitative way of finding similar areas to where you are already successful.

Where are the areas we are not in?

If we map our stores, identify the areas best for our brand (SEIFA or some other demographics), then we should be able to get a good visual on areas of opportunity.

Where are the growth corridors of the major cities?

Most of us know our own city, but are often

66 BUSINESSFRANCHISOR

far weaker in our knowledge of the other main capital cities. The ABS provides data that we can have mapped to show the expected growth corridors five, 10 and 15 years into the future, and many large companies like the oil companies and McDonalds look to purchase or secure land even before the services go in, as a proposed site five to ten years into the future.

Conclusions

Knowing your customers can be translated into demographic measurements, and these can then be applied using mapping across all markets, to see the areas of best opportunity.� years). They will offer you locations they have available and best suit their customers – the Lessor / seller of the property.

If you want long term success in your business, planning around the property aspect of the business is a must. Either internally or with an external consultant, creating a Strategic Network Plan is a bit like taking out insurance on the business, or by thinking about these things and being proactive, you are hopefully improving the chances of success for the long term future, rather than being reactive and following the herd mentality.

Be proactive and develop a Strategic Network Plan for the growth of your retail network and your business in general. The costs involved, whether they are internal or external consultants, will probably be less than 10 per cent of the cost of one failure in your growing network.

If you think leasing agents are working in this manner, you are more optimistic than I am (and I was a property manager for Caltex for three

To contact Peter email or visit: peterb@spectrumanalysis.com.au www.spectrumanalysis.com.au

Think of it as an investment and not an expense, and not a bad investment in my view.

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Your franchisees will be equipped with a robust business plan, sound financials, performance management tools and regular mentoring sessions to help them navigate the early stage start up period and then transition smoothly to maintaining the results and providing the confidence to accelerate growth.

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68 BUSINESSFRANCHISOR

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