Business Franchise Australia Feature Supplement 17#4 May/Jun 2023

VOL 17 ISSUE 04 may/june 2023

recruitment challenges latest news

on the road & service franchising

nic brill | poolwerx

future-proofing your franchise in the face of economic uncertainty franchising and the

automotive sector

in australia in 2023 and beyond

business franchise MAGAZINE 31

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conte nts

on the road & service fr anchises On the Cover 31 Nic Brill, Poolwerx CEO

In Every Issue 34 What’s New! Announcements from the Industry

Expert Advice 36 Brian Keen: Recruitment Challenges

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42 Robert Toth: Franchising and the Automotive Sector in Australia in 2023 and Beyond

Franchisee in Action 38 Hydraulink: New Hydraulink Thomastown Franchisee brings in-depth Engineering Service and Skills

Franchisor in Depth 40 Jim’s Window & Pressure Cleaning: A Lucrative and in Demand Market!

Have Your Say 50 Nic Brill, Poolwerx CEO: Future-Proofing your Franchise in the Face of Economic Uncertainty

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46 Focus Feature

46 Megasealed: A Mega Opportunity for Growth

Profile 48 Bridgestone Tyre and Auto: Going with Confidence

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1 in 2 Australians would only switch to an EV through their employer

Freedom Cars say YES when banks say NO is expanding throughout Australia Proven systems are the structure of Freedom Cars that ensure efficient, professional service and professional marketing plans.

The systems have been developed and refined by our team over the past 16 years. With no lock in contracts customers are catered for with any vehicle option that suits their needs and an opportunity to help repair credit scores.

Electric vehicle prices in Australia remain high, starting at twice the cost of low-budget petrol cars and many priced at six figures.[1][2] Now, results from a new survey have revealed that, while price is the major purchase barrier for 84 per cent of Australians, 46 per cent would consider switching to an EV in an arrangement with their employer.

Freedom Cars offers more than just association with a distinctive brand; we offer support and proven systems that will position new franchisees with options to suit any customers situation.

With the finance industry becoming massively over regulated and interest rates rising has created a gap of approximately 80% of the population as potential customers.

The Novated Lease Australia survey results also found that nearly half (46 per cent) of respondents would switch to an electric vehicle if they were offered a novated lease through their employer, as such an arrangement would reduce the purchase price and running costs of the vehicle.

We’re about giving our franchisees the brand name, marketing tools, business tools, business systems and support that will drive them to success in any economic climate. Freedom Cars is about giving the profits to you the Franchisee.

Younger Australians are more likely to switch to an electric vehicle under a novated lease agreement to reduce costs: more than half (59 per cent) of under-30s indicated they would, compared with 32 per cent of over-51s.

Shaun McGowan, Founder and Managing Director at Novated Lease Australia, says: “Our research highlights that novated leases are on the rise this year. Electric vehicle prices still have a long way to go to drop to a level that competes with petrol cars, yet an increasing proportion of the public and business sector are becoming more carbon conscious.”

“Conscious of this price barrier, State and Federal Governments are financially incentivising organisations and motorists to make the switch. Perhaps now is the time for organisations that are sustainability-minded to add novated lease agreements for electric vehicles into their decarbonisation strategies.

The full survey results, including age and State breakdowns, can be found here: novatedleaseaustralia.com.au/electriccars/ev-price-study 34 business franchise MAGAZINE

Benefits of Freedom Cars: • No Buy In start up • Investment is in your stock • No ongoing fees from profits • Passive income deposited daily • Unique unregulated processes • Awesome profits • Continual Software upgrades • Ability to add your custom modules to Software • Leads supplied direct to your email and software dashboard • Group Advertising • Free setup and monitoring of electronic media such as Facebook & Google accounts • International brand expansion Don’t miss out, for more information go to freedomcars.com.au/franchising

Freedom from monotony and the office company that was a customer of the delivery and logistics powerhouse. Getting to know the local Courier Franchisee who made daily visits to his company warehouse, Shannon was able to learn more about what the day-to-day life of a franchise partner looked like.

When he was ready to leave full-time work behind and become a small-business owner, it was only natural for him to become a Courier Franchisee with Aramex Brisbane.

Award-winning Aramex Courier Franchisee Shannon Heard says the best thing about being an Aramex franchise partner is the freedom to be in the driver’s seat of success and meet new people every day. He’s also delighted to be out on the road enjoying a varied routine, free from the monotony of an office job.

Shannon, who was recently named Aramex Courier Franchisee of the Year, purchased a franchise territory in Brisbane in March 2022.

He services customers’ pick-up and delivery needs in Clayfield, Tenerife and parts of Fortitude Valley.

Prior to joining Aramex, Shannon was a long-time warehouse manager for a

In a short time, Shannon has excelled in three areas that are integral to franchise success: Service, presentation and sales. He always wears the correct uniform, his van is cleaned every weekend and his customer service is one of the best in the depot. He enjoys talking to existing and potential new customers to drum up sales.

Being a Courier Franchisee at Aramex can be very rewarding. The franchise model is designed to be a template for success.

Shannon is a great example of someone who has embraced the opportunity and made it work for him. Congratulations, Shannon, Aramex Australia is proud to have you as a franchise partner.

Auto Tyre and Servicing Posts Growth in 2022 GapMaps 2022 Auto Tyre and Servicing Network Report, which tracks 14 brands in 2,243 locations, reported 82 openings and 33 closures, representing a net change of 49 additional centres compared to the year prior.

Bridgestone is the largest brand tracked with some 340 locations, and one centre per every 100,000 residents in capital cities. Covering the majority of Australian cities, including 58 stores in towns with less than 10,000 residents, Bridgestone reported seven closures and five openings, representing a net change of minus two. Ultra Tune, with 262 locations, also contracted, reporting a net change of minus three with two new locations opening and five closures.

However, several brands reported more positive news.

Tyrepower, with 301 locations, and Mycar, with 276 locations, both reported strong net growth. Tyrepower opened 14 locations and closed just two, representing a net change of positive 12, whilst Mycar opened 10 locations and closed four, a net change of positive six.

However, it was Dunlop who reported the largest growth across all brands tracked, opening 27 locations and closing seven, representing a net change of positive 20.

Goodyear also had significant growth,

opening 13 locations and closing just three, a net change of positive 10.

Scott Johnson, Senior Analyst, GapMaps, said; “The auto tyre and servicing sector had a strong year, with 49 net new locations added in 2022. This points to a more buoyant market and greater provision of essential services to residents across the country.”

To request a copy of the report contact GapMaps at subscribe@gapmaps.com business franchise MAGAZINE 35

franchising feature

EXPERT ADVICE: Brian Keen | Founder | Franchise Simply

Recruitment challenges The franchising industry is concerned about recruiting new franchisees due to various factors such as the COVID-19 pandemic, economic uncertainty, and changing consumer preferences.

World stability and supply chain difficulties add to the number of influences making them even more cautious about investing in new businesses… not to mention the comfort of high employment and workplace flexibility.

The hurdles to conducting face-to-face meetings has slowed down the recruitment process and made it challenging for franchisors to build relationships with potential franchisees.

Whilst having wide exposure in the market 36 business franchise MAGAZINE

is essential, appearance at expos, trade shows and networking events continues to be critical for building relationships with potential franchisees, organic recruitment channels, rather than paid advertising is one productive avenue often overlooked to source potential franchisees. They are often more cost-effective than paid advertising and can also be more authentic and trustworthy in the eyes of potential franchisees.

Franchise Partnership Manager of Poolworx, “so already use the core product”. They have learned how it all happens and realise that the repeat business that comes from that offers a sound business model that they can see themselves belonging to. Poolwerx, with over 600 mobiles and 150 stores worldwide see a pattern of franchisee staff, family members and friends picking up resales and buying out competitors adds generously to their growth.

Having a built-in ascension model allowing mobile franchisees to step up to a retail store works as a solid pathway as well. Other franchisees and support office team members have moved overseas to be key members of their US team for example.

One of the most effective organic recruitment channels for selling franchises is through referrals, including customers and suppliers.

Existing franchisees can be a powerful asset in recruiting new franchisees. They have firsthand experience with the franchise system and can speak to its benefits and advantages.

Brendan Green, Chair of the FCA & CEO of Hire A Hubby finds it’s not always that simple because their franchisees, handling work from the front gate to the back fence and everything that comes between needs very specific skills. Nevertheless, his franchisees find one source of referrals is meeting tradies at their local Bunnings who don’t have the steady workflow or support office to help them. They do see inquiry from staff working for existing franchisees who decide they'd like to step up to being a franchisee.

“95% of our franchisees have a relationship with a swimming pool,” said Mike Geddes,

In a business like City Cave, with a vast database of customers who visit their flotation

Brian Keen Brian Keen has been involved in the franchise industry for more than 30 years and, today, is the Founder of Franchise Simply, Systems2Grow and Microloan Foundation Australia. His on-the-ground business experience as a multi-unit franchisee, franchisor and consultant helping many of the big names create their own franchise systems and growth over the years has been fed into Franchise Simply, helping today’s SMEs and Franchisors grow their business by franchising. www.franchisesimply.com.au | www.systems2grow.com

“

One of the most effective organic recruitment channels for selling franchises is through referrals, including customers and suppliers. Existing franchisees can be a powerful asset in recruiting new franchisees.

Vac says franchise veteran and founder & CEO Warren Ballantyne. This is all helped by a very transparent process introducing prospects to the community.

in the building industry has helped ” 14ScottyearsChallen, CEO of emerging franchise

tank wellness centres and regularly receive marketing material, co-founder Tim Butters needs to do far less advertising than most.

A major growth area is through multi-site franchisees who now represent 30% of the business, one of them owning nine outlets.

Others also have ownership in another franchise system such as a gym, with its obvious synergy. Cross-pollination across different brands is still not as common in Australia as in the US but the trend is definitely going that way. As City Cave launch their first outlet in the US it's apparent that, that is a model that’s going to be a very strong part of their growth.

QHI launch his group. His first couple of franchisees for example have worked with him for some time as sub-contractors on building projects and he's recently appointed a COO who has been on the management team of a supplier that he's known for almost a decade. Scott’s mantra is building those relationships and being very transparent with everybody involved so confidence is accrued, like attracting a moth to the light, and there are no surprises. One thing he emphasises is the great care to be taken managing scalability and making sure you don't grow beyond your comfortable capacity because growth is always more challenging than you imagine.

Strong referral programs to reward anyone that introduces a new franchisee has worked extraordinary well over many years for Gutter

In conclusion, organic recruitment channels can be a powerful tool for selling franchises.

By leveraging referrals, social media, and

“

One thing Scott Challen emphasises is the great care to be taken managing scalability and making sure you don’t grow beyond your comfortable capacity because growth is always more challenging than you imagine.

”

networking events, franchise owners and operators can build a network of passionate and engaged individuals who are interested in the franchise and want to see it succeed.

This all comes to nothing of course if you don't have a great process to take prospective franchisees through their journey. This includes appropriately rewarding those who refer to you both internally and externally and, as a given, this is followed with a great training and ongoing support system building a model within a caring community so loyal franchisees are happy to contribute towards the whole. v business franchise MAGAZINE 37

franchising feature

franchisee in action: Hydraulink

New Hydraulink Thomastown franchiseE brings in-depth engineering service and skills Sascha Humphreys realised a dream in running his own business backed by a respected national brand with which he can apply his wealth of experience to customer service.

A mechanical engineer with more than 20 years’ experience in Melbourne construction, manufacturing, and industrial projects will bring extensive problem-solving experience to his new Hydraulink hose, fitting, and service franchise in Thomastown.

Sascha Humphreys says he is relishing the opportunity to serve the huge diversity of industry requiring hydraulic services to optimise the uptime and reliability of machinery in the district, which is a major economic generator region for the city of Thomastown, north of the Melbourne CBD. “This is a wonderful opportunity for me to realise my dream of running my own business, with the support of the highly respected Hydraulink national network and brand, demonstrating proven performance across construction, logistics, earthmoving, manufacturing, process, and waste management industries, which abound in Thomastown,” says Sascha.

“I have been on both sides of industrial projects and the supply chain, so I appreciate the pressures that staff and management go through in all the phases and deadlines of their business, which hydraulics are vital to achieve. I love technical details and solving the challenges that get people and their machinery moving, having spent the last 20 years down there in the trenches designing, managing, and commissioning engineering projects. I know the language and needs of the market, having spent most of my career developing solutions attuned to client KPIs, technical challenges and end results required,” he said.

Sascha says this broad experience of design, solutions development, and hands-on work brings a further valuable dimension of service to the proven Hydraulink offering, with more than 400 service points across Australia and New Zealand, servicing both mobile and static machinery in which reliable hydraulics are vital.

“I have always wanted to run my own business but, with mortgages and children like most younger people, you need solid backing to step out with confidence. I had seen and heard of Hydraulink plenty of times before this opportunity came along, and I understood them as a trusted brand which I could optimise my skills and broaden their reach to the local market. All the staff I have met throughout this journey into a franchise are well skilled and have outstanding product knowledge.”

Hydraulink Australia Franchise Manager, Wayne Abbott, says family-operated franchises such as Sascha’s are a major benefit to clients because they have the strongest personal stake in the business to ensure ongoing satisfaction and enduring partnerships.

38 business franchise MAGAZINE

“Hydraulink provides outstanding training and continuing education to ensure that franchise operators can flourish as business operators in their own right as they expand their careers by forging enduring value and trust.”

“Hydraulink’s support network for all its clients and operations ensures there is always a well-stocked and skilled technical service backup. If a franchisee like Sascha needs help from another technician from the Hydraulink network, he can be assured they also have certified national training and enormous back-of-house support to get machines running again safely and quickly. The network backing ensures everyone in it delivers uniform standards of compliance, safety, and traceability in everything they do, across single or multiple sites.”

Sascha adds, “Melding into the Hydraulink network and benefitting from its branding, marketing, and proven business systems definitely helped make this step forward to independence much smoother and more cost-efficient than starting from scratch.”

Hydraulink Thomastown can be contacted on 0419 610 839 Hydraulink Australia 1300 36 37 34 Hydraulink New Zealand 0800 80 66 66 For further information, please contact: (Australia) Wayne Abbott, Wayne.A@hydraulink.com.au (New Zealand) Kimberley Holt kimberley@hydraulink.com

JOIN HYDRAULINK YOU’D LOOK GREAT IN YELLOW Whether you are looking at operating your own mobile Hydraulink Sales Service Technician business, or would like the opportunity to expand and employ other technicians by owning a Hydraulink Hose Centre - Hydraulink can be the right franchise opportunity for you to grow a successful business of your own with a secure future. Hydraulink has been a trusted brand for the supply and manufacture of high quality hydraulic hose and fittings since 1945 with over 400 service locations across Australia, New Zealand and Asia Pacific.

BUSINESS IS BOOMING AT HYDRAULINK Hydraulink’s services are in high demand. We provide 24/7 mobile hydraulic hose and fittings breakdown and repair services for essential, thriving, and growing markets including: manufacturing, waste management, agriculture, construction, transport, marine, mining and materials handling.

LIFE AS A HYDRAULINK FRANCHISEE Our Franchisees look forward to developing new skills and taking control of their career. Every day is different as a Hydraulink technician and successful Franchisees come from all walks of life. An engineering qualification, trade skill, or mechanical aptitude are beneficial. However, Hydraulink has found that the most successful franchisees like to fix things, have a passion for their business, motivation to succeed and provide great customer service.

YOU CAN BE YOUR OWN BOSS IN A HYDRAULINK MOBILE SALES AND SERVICE TECHNICIAN FRANCHISE - STARTING FROM:

$40K-$60K Working Capital + Financed Plant and Equipment + Stock

FOR A CONFIDENTIAL DISCUSSION CONTACT: Wayne Abbott, National Franchise Manager - Hydraulink M: + 61 455 478 699 | E: wayne.a@hydraulink.com.au | W: www.joinhydraulink.com business 39 Business Franchise Australia and Newfranchise Zealand MAGAZINE 39

franchising feature

franchisor in depth: Jim’s Window & Pressure Cleaning

Jim’s Window & Pressure Cleaning

A lucrative and in demand market!

Nothing could be easier than owning your own Jim’s Window & Pressure Cleaning business.

In one easy step, we provide you with all the equipment; training and ongoing support you need to ensure your success. Then, once you get started, we will advertise and send you extra work so you have no headaches and can simply get on with enjoying your new life.

Being in business for yourself does not mean that you are in business by yourself. Over 5,000 franchise business owners are now enjoying the benefits of being part of the biggest services group in the world. You can now find Jim’s Franchises in New Zealand, Canada, and United Kingdom as well as in Australia.

Jim’s Window & Pressure Cleaning falls under the Jim’s Cleaning Group umbrella of cleaning franchises in the Jim’s Group.

The group’s founder Haydar Hussein credits the regional franchisor system as a main contributor to franchisee satisfaction. Your 40 business franchise MAGAZINE

franchisor is experienced in the industry and is your business mentor and coach for the duration of your franchise agreement. They know their area and they know what works.

On top of this, when you buy a franchise with the Jim’s Group, you are investing in a proven

business model. Established in 1989, our systems and processes have been shown to be successful. This means you can skip the trialand-error phase of starting a new business and focus on making money from day one.

With national advertising and branding

owners come from “ Franchise all walks of life and from all parts of the globe but share the common goal of ‘turning passion into profits’.

”

already a part of your package when you purchase a Jim’s Window & Pressure Cleaning franchise, new franchisees are able to hit the ground running. The Jim’s Cleaning Group is now the largest domestic cleaning company in Australia and has placed in the overall top 10 in all categories of the Top Franchise Awards for 3 consecutive years.

Signalling that it’s not just our customers who are happy, but our franchisees as well.

Franchise owners come from all walks of life and from all parts of the globe but share the common goal of ‘turning passion into profits’.

As a successful franchisee, you are granted the rights to own & operate a Jim’s Window & Pressure Cleaning business in a territory comprising homes and/or businesses for the provision of window and pressure cleaning services to domestic, commercial, governmental, and industrial markets.

Your territory is ‘non-exclusive’ which means that you get the first option on all work in your area, however if you decline the lead this will be offered to another franchisee. Of course, this also works the other way in so much as you are not limited to only working in your own territory, but can ask for job leads from wherever you like.

As a franchise owner, you have full autonomy over when you work and what you charge.

You are able to set your own schedule, choose which services you offer, and hire your own team. This flexibility and control can be a major advantage for entrepreneurs who want to build a business on their own terms.

purchase price. All your equipment, chemicals, products, stationary and promotional items, training, flights to Melbourne for induction training, including accommodation and meals. The only thing you will require is a vehicle (typically a van) to operate your business.

You can grow your business to any size without purchasing additional territories or franchises and are encouraged to expand your business by employing staff and/or investing in additional vehicles. You have the option to sell a portion of your client list to a new franchisee, giving you a cash injection to your business and providing you the opportunity to take on new clients.

We have more work than we can handle! In the last financial year, we have turned away 6686 customers due to not having enough franchisees to cover the work. As the group grows, so does the demand. Get in now and change your life for the better!

We don’t require any qualifications or experience as all the training is provided.

This includes everything from initial training on our cleaning processes and techniques to ongoing marketing and operational support. Jim’s Window & Pressure Cleaning suits anyone with a passion for customer service and strong attention to detail. Every day is different, you will feel challenged in rewarding ways.

When you decide to go ahead with a Jim’s Window & Pressure Cleaning franchise, everything you need is included in the

The first step to making this positive change in your life is to call 131 546 or enquire online. The regional franchisor of your area will then contact you and answer any questions you may have. We encourage all prospective franchisees to spend a day on the road with a local Jim’s Window & Pressure Cleaning franchise owner to see what a day in the life is like. Once you have decided this it the right choice for you, we organise contracts, and book you into training. Then you will be ready to go live and start taking on work as a Jim’s franchisee! www.jimscleaning.com.au/franchiseenquiry-2/ business franchise MAGAZINE 41

franchising feature

EXPERT ADVICE: Robert Toth | Special Counsel | Sanicki Lawyers

Franchising and the

Automotive sector in Australia in 2023 and beyond

A lot has happened in the automotive industry over the last few years.

As Ted Mulry Gang, said in 1974 “c’mon jump in my car!” It doesn’t seem so long ago on one hand, but it is nearly 50 years, I was in Year 11 at Camberwell High, just got my license and bought my first car, a Datsun 1600 for $1,300 a great car!

Since then, a lot has changed in the automotive sector and the world!

We have had major local manufacturers leave 42 business franchise MAGAZINE

the country, the rise in the EV market, a number of overseas manufacturers coming into the market and the recent class action

by Mercedes Benz dealers against Mercedes when they changed their distribution model to an agency model.

Dealerships invest significant capital taking up a dealership and when they are terminated at short notice, they are left with significant debt and stock.

This was an issue reviewed by the ACCC since approximately 2018 with recent reforms implemented to balance the rights more fairly, between manufacturers and dealers.

Mercedes Benz Case Mercedes Benz dealers (regional and city) launched legal action in the Federal Court in 2022 seeking $650 million in compensation from the car maker.

The previous dealer model was that dealers used to buy cars from Mercedes and dealers could set their own sale price.

Mercedes changed to an agency model, which came into effect in January 2022, by which Mercedes retained ownership of the cars and

the dealers became agents and obliged to sell cars at a fixed price for a set commission.

Dealers no longer owned the stock and consumers could no longer negotiate on price.

This is interesting as it would be considered price fixing if the dealers fixed prices amongst themselves but under the agency model as Mercedes owned the vehicles, they are not in breach of the Australian Consumer Laws (ACL).

Robert Toth is Special Counsel Sanicki Lawyers, with over 35 years’ experience in Franchise, Licensing and Distribution law acting for both local and International franchisors, franchisees and master franchisees and with expertise in dispute resolution. Robert is an Accredited Commercial Law and Franchise Specialist, a member of the Franchise Council of Australia (FCA) and the International Franchise Lawyers Association (IFLA) and regularly writes for franchise and corporate journals online.

Contact Robert@sanickilawyers.com.au or even call him on mobile 0412 67 37 57

Mercedes argued the agency model would lead to more transparent pricing for consumers and provide a fairer supply of cars to dealers.

Dealers say they were forced to sign the new agency model which dramatically reduced their profits and could potentially wipe out years of goodwill with customers.

The dealers allege Mercedes had this plan in place to convert dealers and undertook a sham consultation process to push the changes through despite objection by the majority of Australian dealers.

The allegations claim that Mercedes had broken the consumer laws by engaging in unconscionable conduct, breached the Franchise Code’s good-faith provisions and also engaged in misleading and deceptive conduct to redirect the profit that dealers were making to Mercedes own pocket.

An interesting twist along this long and winding road is that Deloitte’s (a top tier Accounting Firm) were engaged by the Dealers in 2019 to do modelling as to the impact on dealers of the agency model for dealers.

Deloitte’s found that under the agency model a dealer’s profit would decline by possibly more than 50% compared to the dealership model.

Deloitte’s were then also engaged by Mercedes to provide a report which Deloitte’s later admitted relied on flawed sales data provided by Mercedes (sales data from 2018 which was a disastrous year for sales) to create modelling that showed the changed model would benefit dealers, which was misleading.

a. Did Mercedes act in good faith as required under the Code?

passenger vehicles, new light goods vehicles (or both).

b. Did Mercedes provide sales data that was misleading to Deloitte’s who then provided modelling that was misleading and deceptive and induced dealers to take up the Agency model? (Noting the dealers say they were given little choice by Mercedes.)

The new regulations do not cover motorcycle, used cars, farm machinery and truck dealerships. Somewhat strange and we are not sure if this was intended by the legislators.

c. Did Mercedes conduct constitute unconscionable conduct under the ACL, noting that acting legitimately in their own commercial interests does not mean Mercedes acted unconscionably.

The case continues so watch this space!

The New Vehicle Dealer Regulations After extensive consultation with the sector new regulations were introduced which came into effect 1 June 2020 aimed at supporting dealers.

One might question how the same firm can be engaged by both parties to provide reports with 2 different outcomes and why no one raised the issue that there may be a conflict in Deloitte’s engagement for the dealers and Mercedes.

The Competition and Consumer (Industry Codes – Franchising) Amendment (New Vehicle Dealership Agreements) Regulations 2020 (Amending Regulations) was introduced to address the power imbalance between car manufacturers and new car dealers (franchisees).

The case continues with considerable ramifications for the franchise and automotive sector.

The changes apply to new vehicle dealer agreements entered into on or after 1 June 2020 and to renewals or extensions of them.

The case does come back to 2 key issues which are often the causes of action in any franchise dispute:

The new regulations only apply surprisingly to new vehicle dealership agreements that is, a dealership that predominantly deals in new

The regulations are complex as the end of term manufacturer obligations (see heading below) do not apply to renewals or extensions of new vehicle dealership agreements entered into prior to 1 June,2020.

Once an existing agreement is renewed or extended, the new end of term notification and end of term management obligations apply.

The new capital expenditure obligations apply to existing dealers but depend on the date of creation or update of the disclosure document.

Confused? you are not alone !

Where an existing dealer agreement is renewed or extended after 1 June 2020 and the disclosure document created or updated after 1 June 2020, the new Code provisions do apply (Clause 50 and Clause 51).

The New Requirements Disclosure of capital expenditure The new regulations (Clause 50) provide that car manufacturers cannot require significant capital expenditure by a dealer during the term unless the dealer agrees with the expenditure, or the expenditure is disclosed to the dealer prior to entering the agreement. business franchise MAGAZINE 43

franchising feature

EXPERT ADVICE: Robert Toth | Special Counsel | Sanicki Lawyers

The new regulations “ (Clause 50) provide that car manufacturers cannot require significant capital expenditure by a dealer during the term unless the dealer agrees with the expenditure, or the expenditure is disclosed to the dealer prior to entering the agreement.

”

The key difference between the old clause 30 and new clause 50 is that under the new provisions, when making capital expenditure disclosure to a dealer, the manufacturer must provide as much information as is practicable about the expenditure which includes: a. the rationale for the expenditure, b. the amount, timing and nature of the expenditure;

term arrangements if not renewing an agreement; and

c. the anticipated outcomes and benefits of the expenditure; and

c. provide a statement to the dealer outlining why the agreement is not being renewed that is reasons for the refusal.

d. the expected risks associated with the expenditure.

The written disclosure must be supported by “discussions” with the dealer about the likelihood of the dealer recouping the expenditure (having regard to the geographical area of the dealer) before the agreement is signed and any representations made must be supported by independent and objective data.

Resolving disputes The new regulations allow 2 or more franchisees to ask the franchisor to deal with the franchisees together about a common dispute. But it does not require car manufacturers to engage in multi-party dispute resolution.

The new regulations may mean manufacturers give less disclosure in relation to capital expenditure and the trend may be to offer shorter term agreements and look to other distribution models.

The Government is to review operation of the amendments before 1 April 2024.

End of term obligations The regulations require manufacturers and dealers to: a. provide at least 12 months’ notice if they intend not renewing a dealer agreement (if the agreement is 12 months or longer). b. discuss, plan and agree on end of 44 business franchise MAGAZINE

This gives the dealer time to plan and make arrangements to sell the site or take up another dealership.

If the manufacturer gives notice not to extend or enter into a new agreement with the dealer, the parties must work together to agree on a written plan with milestones including management of the dealer’s stock of new vehicles and parts, and service and repair equipment over the balance of the term.

The parties must cooperate to reduce the dealers stock of new vehicles and spare parts for the remainder of the term and manufacturers must implement these arrangements “as soon as practicable” even where the relationship has deteriorated.

Dealers need to carefully review their agreements and renewals as manufacturers may try to include greater control over the process.

Why are dealership agreements a franchise arrangement?

You may not think a dealership or even a distribution agreement would be considered a franchise but it is often the case. Under the Code there is a franchise agreement if these features are present: • One person (franchisor) grants another person (franchisee) the right to carry on a business in Australia supplying goods or services under a specific system or marketing plan.

• The business is substantially determined, controlled, or suggested by the franchisor or its associate.

• The business is associated with a particular trademark, advertising or a commercial symbol owned, used, licensed, or specified by the franchisor or its associate.

• The franchisee must make, or agree to make, certain types of payments to the franchisor or its associate, before starting or continuing the business.

Not all distribution and dealership agreements are however, a franchise arrangement and you need specialist advice to determine the position as a breach of the Franchise Code (which is a mandatory Code) carries substantial fines and penalties.

Apart from the Franchise Code and the Australian Consumer Laws there are also a myriad of other laws that you need to be aware of such as the unfair contract provisions, OH &S provisions, Workplace laws that you need to consider.

The ACCC has developed a free online education course for people thinking about buying a franchise which is highly recommended to prospective franchisees.

The Franchising Code limits terms in a franchise agreement such as restraints at the end of the term if the franchise agreement is not extended, the franchisors no longer have the right to charge legal costs or make retrospective changes to the agreement and there are a number other restrictions.

So, c’mon jump in my car and turn on the radio… and you might hear a classic tune like Ted Mulry or The Cars! v

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Low level of investment.

Services include leaking shower & balcony repair, grout replacement, waterproofing and tiling.

Enjoy customer demand from the day you start.

Full training and support provided.

Finance options available.

(Conditions apply) National sales and marketing support.

MEGASEALED SERVICES

Leaking Shower Repair

Leaking Balcony Repair

Grout Replacement

Waterproofing

Tiling Solutions

Start your Megasealed Franchise journey today!

Find out more at: megasealed.com.au/franchise-opportunities business franchise MAGAZINE 45

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focus feature: Megasealed

A MEGA Opportunity For Growth At Megasealed, we take pride in being at the forefront of the bathroom and balcony leak repair industry in Australia. We are committed to providing innovative stop-leak solutions for bathrooms and balconies, while upholding the highest standards of customer service through our reliable network of franchisees.

Owning your own Megasealed franchise presents a unique opportunity for growth, with a track record of a successful business model that has allowed us to build 125 thriving territories operating across Australia.

We offer a comprehensive range of services, including leaking shower and balcony repair, grout replacement, waterproofing and tiling solutions.

Our triumph in the industry can be attributed to our unwavering commitment to 46 business franchise MAGAZINE

providing our franchisees with exceptional systems and award-winning products. Our franchisees are equipped with comprehensive training and continuous national support, which enables them to offer premium services to a diverse range of clients from strata and real estate companies, builders and plumbers, to government departments, aged care facilities, gymnasiums, and hospitals.

Megasealed are the only National Franchise in the industry that is ISO 9001 certified by SAI Global, you can be confident that you are always backed by the highest quality systems as a member of the Megasealed franchise network.

Benefits of Owning a Megasealed Franchise Megasealed can offer you the opportunity to build on your existing skills and operate in an environment of infinite growth opportunity, with limited franchises remaining around Australia, there’s never been a better time to start your franchise journey with Megasealed.

Available Territories VIC: Ballarat, Bendigo NSW: Wagga Wagga, Port Macquarie, Coffs Harbour, Albury-Wodonga QLD: Cairns, Townsville, Bundaberg NT: Darwin + more!

With the backing of a supportive team, you’ll be working for yourself, not by yourself.

Getting a new business off the ground can be tough, as a franchisee you’ll have the knowledge and support of an experienced team who have been through it all before.

Run your own business with flexible work hours that work for you. Utilise the latest job management software and processes to work anywhere anytime.

Extensive ongoing training and support provided in all areas of the business.

Megasealed Founder and Managing Director, Jacques Courtin has a unique hands-on approach to franchise recruitment, offering all potential franchisees the opportunity to join Jacques on the tools or in a managerial role within a franchise to ensure Megasealed algins with your goals and skills.

Franchisees then undergo two weeks of in-

About Megasealed Megasealed is an Australian market leader, pioneering unique guaranteed solutions to stop leaking showers and balconies without the unnecessary cost, time, or fuss of removing tiles.

Servicing over 25,000 jobs per year in over 125 territories across Australia.

Megasealed provides professional services to home and business owners, strata, bodies corporate and facility managers, real estate agents and property managers, aged care and retirement facilities, hospitals, healthcare, builders, plumbers, and government departments.

For more information email franchise@megasealed.com.au www.megasealed.com.au

I started my Megasealed “ journey as a sales consultant with Megasealed Bathrooms Australia. I was given the opportunity to buy my first franchise in 2016, and there has been no looking back ever since I made my decision.

Being a franchise owner has changed my life and I am now the proud owner of several successful franchise locations. – Graham Evans,

”

Megasealed Sydney Eastern Suburbs & CBD, Sydney South East and Canberra.

depth initial training held at our National Support Centre followed by local technical training. With ongoing training and workshops held to keep you up to date with the latest industry trends and regulations, Megasealed product innovations, marketing and sales techniques.

National customer service support. You’ll have filtered leads come straight through to you with an outsourced 24/7 call center who will receive and forward on quality customer inquiries leaving you with more time to focus on running your business. Nationally, the Megasealed network takes on 25,000 jobs a year and our service team is on hand to provide each territory with leads for their region.

Our Franchisees are at the heart of the Megasealed business. With national networking opportunities including quarterly meetings and yearly conferences to reward

our network and reignite our mission.

Megasealed franchisees come from many different career backgrounds, some with no trade backgrounds at all. If you’re a people person, have an eye for detail and is someone who can think on their feet - owning a thriving franchise might just be the change of scenery you’re looking for.

What are the costs?

Starting a new business from the ground up can be a costly exercise. Megasealed franchises are currently available in selected locations around Australia with an initial set up cost of $30,000 excluding GST per territory. Financing options are available to those who may need the support. With your own exclusive operational territory, enjoy taking on as much work as your territory can offer, the sky is the limit!

From inception the Megasealed vision has remained simple. A commitment to nationwide recognition for providing innovative stop-leak solutions for bathrooms and balconies without the unnecessary cost, time loss or fuss of removing tiles.

Our expanding network of franchises strives to anticipate, meet and exceed clients’ needs and expectations. We deliver pioneering solutions, attention to detail and a dedicated service to local communities around Australia.

If you’re ready to hit the ground running with customer demand from the very first day, don’t miss this opportunity to join Australia’s market leader in the repair of leaking bathrooms and balconies. Start your Megasealed Franchise journey today by completing our enquiry form. https://www.megasealed.com.au/ franchise-opportunities/ business franchise MAGAZINE 47

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PROFILE: Bridgestone Select Tyre & Auto

Going with Confidence Joining Bridgestone Select Tyre & Auto was the catalyst for Caleb Sos to achieve his personal aspirations and provided no shortage of opportunities along the way. After winning Bridgestone’s franchisee of the year title for a third straight year, he can attest to the satisfaction of being part of Australia’s leading tyre and mechanical service networks.

Having spent most of his working life in the automotive and tyre industry, it was the reputation of the Bridgestone name that attracted him to joining the Bridgestone Select Tyre & Auto franchise model in 2015 at the Nundah store in Brisbane’s inner suburbs and adding his second location in 2019 at Hendra.

network development team, the Nundah store was identified as a prime opportunity for his first store. For the opportunity to open a second store at Hendra, it was again working closely with the team to identify the best fit for all parties.

By following the processes and ongoing collaboration with the network development team and retail team, the opportunity arose for Caleb to expand to a second store at Hendra, and operate as a multi-franchise owner for several years.

“Starting within the Bridgestone Select Tyre & Auto network was made really simple by the team through leaning on the systems and processes that they’ve developed for all store operators.”

“The Bridgestone team genuinely works with you as a franchisee, and it’s been through true collaboration that we expanded to a second store. They also supported us in other ways such as helping us with developing our people at our stores to a level where they had the appetite and knowledge to enter store ownership themselves,” Caleb explained.

Through Bridgestone’s DRIVE program, franchisees are given a platform to grow their business – combined with the support from the Bridgestone retail and operations team.

“Bridgestone’s DRIVE program places an emphasis on safety, processes, customer experience and satisfaction and the core parts of the business. Through the store of the year program, it creates a great, easy to follow framework for running a successful store,” Caleb added.

“I had plenty of exposure to other brands and franchises within the industry, but none of them have the brand strength, network maturity or professionalism of Bridgestone and the Bridgestone Select Tyre & Auto Network,” Caleb explained.

While Caleb’s entered the network with a background within the industry, Bridgestone’s operations manual, and the model’s systems and processes, makes it simple for franchisees with little to no automotive experience.

“It’s a brand that is loved by the public and from my point of view, has always been the pinnacle of the tyre industry. That’s why I was attracted to joining the network.

Bridgestone has the market leading product, backed up by the biggest and best network.”

“One of the advantages of being part of a significant network like Bridgestone Select Tyre & Auto is the information sharing between stores, and its not uncommon to see newcomers to the industry hit the ground running because of the systems and processes Bridgestone has refined,” Caleb said.

Working closely with the Bridgestone

48 business franchise MAGAZINE

“The support of Bridgestone also allowed us to develop our store manager at our original store and see him buy the business from us. We had the full support of Bridgestone, and it was a great outcome for all parties: the customers had continuity, Bridgestone gained another great franchisee and it provided new opportunities for us.”

Caleb confesses that he’s always been driven by opportunity and believes that there are no shortage of them within the tyre and automotive industry.

“Nearly every household has a car, and they will always need servicing and tyres.

It’s a staple industry and there is no better opportunity provider in the industry than Bridgestone,” he said.

“Now is an exciting time for the industry as it transitions to new technology, and Bridgestone is giving us the opportunity to be at the forefront of the evolution.”

THE BRIDGESTONE SELECT DIFFERENCE. The Bridgestone brand has a global reputation as the tyre industry market leader. Renowned for producing quality products and being at the forefront of technology, innovation and continuous improvement. No other tyre brand can match Bridgestone’s global strength, research and development focus.

As a Bridgestone Select Tyre & Auto franchisee, you will benefit from the strength of the Bridgestone brand and an established, proven model that provides everything you need to succeed.

With various Bridgestone Select Tyre & Auto franchise opportunities available, we invite you to partner with Bridgestone for a strong future.

Scan to discover more or email us direct. franchiseerecruitment@bridgestone.com.au

180 stores Australia wide

350,000 customers each year

2%

annual growth

$2 Billion tyre retailing industry

business 49 Business Franchise Australia and Newfranchise Zealand MAGAZINE 49

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have your say: Nic Brill | Chief Executive Officer | Poolwerx

Future-proofing your franchise in the face of economic uncertainty Franchising has been around since antiquity, when Roman law allowed merchants in longdistance trade to sell their wares under another merchant’s name without having to buy them first from the original source. But, it wasn’t until the 1900s that it became a viable business model.

The first franchised business was created in 1892 by George Gilman who developed a licensing program for other grocers to use his brand name, logo and store layout. Gilman’s idea worked so well that other companies began following suit. Fast forward to today, there are many other types of franchises in existence, particularly here in Australia.

In fact, Australia has more franchising outlets 50 business franchise MAGAZINE

per capita than any other country except New Zealand, but close to 90% of franchises are Australian developed. That being said, the latest interest rate rise by the Reserve Bank of Australia (RBA) – the tenth increase in a row since May 2022 – has presented a number of challenges for the franchising industry and our economy has suffered in several ways. The cost of borrowing has increased exponentially over the past 12 months, and this is having a negative impact on mortgage holders and household budgets which has sparked public debate.

Though, there has been limited discussion on how this is affecting Australian businesses, particularly small businesses and franchises like Poolwerx. No doubt a number of business owners are feeling the pressure and pinch of interest rate hikes and consumers’ reduced spending power as a result, but it needn’t be all doom and gloom.

While the RBA’s approach has been aggressive, interest rate rises are generally a response to economic growth which is hopeful to hear for many of us and, in a lot of ways, this is actually a sign of a healthier market on the horizon. Why? As the economy declines, interest rates decrease and when the economy improves, interest rates increase.

This is where we find ourselves today.

When faced with another economic downturn, there’s no better time for businesses to focus on improving workflows, investing in the right technology and streamlining operations. But above all else, strategising and listening to your customers while balancing revenue and costs is key for future-proofing your business.

The concept of future-proofing is all about anticipating what’s to come and developing specific tools to minimise the impacts of unprecedented shocks and stresses of future events. It’s a process that involves creating

Nic Brill for almost 20 years, has served in key leadership roles for global and national brands including Donut King, Gloria Jeans, King Island Dairy, Nescafé and Vitasoy. His demonstrated history as a business leader in the franchising and retail industries has equipped him with critical insights into understanding the core values of the Australian small business owner.

Nic has developed a breadth of knowledge at a strategic and operational level and his international experience drew him to Poolwerx as the company continues to bolster its reputation as the world’s largest global franchise pool service brand across Australia, New Zealand and the United States.

we recognise the importance of keeping up with the latest advancements and ensuring that our franchise partners are equipped with the most modern technology and processes.

By doing so, we can help our partners stay ahead of the curve and thrive in the market.

sustainable business models and strategies that will ensure the longevity of a company— adapting, optimising and planning are key.

Take Poolwerx for example, over the last few years we’ve prioritised crisis management and responsiveness to ensure we remain agile and act quickly to matters that are unexpected and out of our control. This has allowed us to implement a fast yet considered approach to supporting our franchise partner network during times of crisis, such as the South East Queensland and Northern NSW floods and COVID-19 pandemic.

As Australia’s largest franchise network of Pool Retail Stores and Mobile Service Units, we strive to help our franchise partners succeed. In addition to a team of experts in marketing, IT, training, administration and sales, we offer training support from our regional business development managers, our Poolwerx Support Centre (PSC) staff in Brisbane and frequent interaction with fellow franchise partners. We reinforce this with information and modules at monthly business meetings, our annual Poolwerx convention, and upskilling opportunities from our Partners in Profits (suppliers). In terms of KPIs, franchise partner profitability is our number one for PSC.

A dedicated Crisis Response Committee was formed with representatives from operations, business development, marketing, people and culture and supply, as well as leasing.

The committee played a crucial role in managing rental relief and rebuilds for franchise partners and the retail department during this time and meant those who were flood-affected were able to continue servicing customers with the assistance of our cloudbased technology.

I don’t just want our franchise partners to survive – I want them to thrive. With that in mind, Poolwerx developed and embarked upon an initiative which was designed to benefit every single franchise partner – our client first strategy (CFS). The CFS looks for insights into what is making the industry tick this year, and forecasts what is coming over the next three. We used the CFS to sculpt a strategic plan with clear tactics that flows into a monthly calendar, collaborating and coming together to execute with excellence. Having one clearly defined and aligned brand, vision, and dream means we can operate in lockstep together with clear communication, honesty and transparency.

Keeping innovation and technology at the forefront of our business is also imperative for future success. It is paramount for businesses to stay vigilant in monitoring industry trends, growth opportunities, new products, and emerging technologies. Neglecting this crucial aspect could result in the business falling behind its competitors which is something we cannot allow to happen if we want to remain successful. At our company,

In order to plan for the future, whatever that may bring, business owners and management teams must reflect on the past and consider how to leverage their biggest learnings from the pandemic. With the cost of living crisis continuing and further interest rate rises looming, businesses will need to improve efficiencies and look to reduce operating costs to retain their clients and customers. Offering value along with a customised and flexible

approach will help your customers cope with these cost rises and maintain their confidence in your business and brand.

In saying all that, there is a great deal of uncertainty felt right across the country at the moment, which often leads many to reassess life goals and career aspirations.

As people were laid off during the 2007-08 GFC, Poolwerx had a great group of franchise partners join the network. In fact, their store footprint and revenue grew more than 50 per cent in the five years following the GFC and they’re anticipating a similar level of growth post-pandemic.

Another outcome of the GFC was people’s decision to secure their children’s future by starting a family business that could offer them long-term employment. I know firsthand just how daunting financial challenges can be for business but with precision planning, the correct tools and technology, and a united front, we can all ride the wave to calmer waters. v

About Poolwerx Poolwerx is the world’s largest global franchise pool service brand.

Founded by Australian Executive Director and entrepreneur John O’Brien in 1992, Poolwerx has grown to nearly 600 service vehicles and 160 stores in Australia, New Zealand and the United States. Poolwerx has multiple revenue streams, repeat clients, limited competition, is secure in the growing home services sector and is a technology leader. Poolwerx also champions the importance of teaching life-saving water skills through its annual community initiatives, Responsible Pool Person and Learn2Swim Week, in partnership with Kids Alive.

For more information visit www.poolwerx.com.au business franchise MAGAZINE 51