Inside Franchise Business - Jan/Feb 2017

FRANCHISE B US IN E SS

INSIDE

YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE WWW.FRANCHISEBUSINESS.COM.AU

JAN/FEB 2017 ISSUE 30 VOL. 1

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15

FAST-GROWING FRANCHISES

BITE INTO THE $6.9 BILLION BURGER BUSINESS

POOLING RESOURCES: DIVE INTO THE AWARD-WINNING WORLD OF POOLWERX

THE LARGEST MASSAGE FRANCHISE IN THE WORLD IS HERE!

Massage Envy introduces the concept of providing membership-based therapeutic massage at an affordable price, in professional facilities and during convenient hours.

Internationally, demand has been tremendous for Massage Envy’s affordable approach to healthy skin care and traditional massage therapy.

Limited Australian franchises are available. Secure yours today.

MassageEnvyFranchise.com.au

CONTENTS

REGULARS 5 6 10 110 112 113 115

EDITORIAL GLOBAL EYE INSIGHTS GLOSSARY CHECKLIST

14 FAST GROWING FRANCHISES Check out some of the franchise speed-freaks

18 COVER STORY The story of a multi-award winning Poolwerx

DIRECTORY

40 A WINNING HEART

One Bakers Delight franchisee has been awarded for his community spirit

44 FIT FOR THE GODS

LISTINGS

A new Greek cuisine concept has great franchise credentials

24 AN EXTRA SLICE OF ACTION

46 SHARING THE RISK

28 A SALTY SOLUTION

48 YOUNG GUNS GRAB THE BATON

New management and a new brand are going to boost Pizza Hut

An emerging franchise model could be good for your health

A beauty clinic offers a distinct partnership model to franchisees

Two brothers follow their parents into a franchise

32 CREATING A FRESH BUZZ

What Gloria Jean’s Coffees has in mind for 2017

36 ALL GUNS BLAZING

Barbershops are all the rage. Now you can buy into a franchised brand

50 FIVE MINUTES WITH...

Q & A with Oporto franchise manager

79

INDUSTRIES

INTRODUCTION TO FRANCHISING

52 MORE THAN A BUN FIGHT

80 10 REASONS TO CHOOSE FRANCHISING

94 BUSINESS BLUEPRINT

60 FRESH CHALLENGES

84 FRANCHISING 101

96 STEPPING STONES TO SUCCESS

The fundamentals of a franchise business

Understand the process to signing up to a franchise

68 NO PLACE LIKE HOME

86 KEEPING THE CODE

98 TAKING THE RISK

What the burger business has to offer franchises

Are you geared up for an exciting new concept?

Running a home-based business can offer great flexibility

Find out more about this $146 bn sector

Transparency and good faith are essential in a franchise

There is no such thing as a risk-free business. Check out what’s involved

90 COMMON VISION

100 KNOWLEDGE IS POWER

92 IT’S ABOUT TIME

109 5 REASONS

What defines the relationship between the franchisor and franchisee?

76 BEYOND THE BUBBLE

An operations manual is a franchisee’s daily directive

What you need to know about a franchise term

Chat Time is stirring up the tea bubble market

What you need to know about researching the franchise opportunity

A quick look at why franchising works

122 FINAL WORD

Professor Andrew Terry takes a peek at the future JAN / FEB 2017 | 3 | WWW.FRANCHISEBUSINESS.COM.AU

r o F f n o o i d ? s a P START YOUR BRILLIANT FUTURE NOW AND BUY A BUSINESS WITH HEART

“MY DAUGHTER & I BOUGHT INTO A HEALTHY RELATED FRANCHISE LIKE SUMO BECAUSE WE LOVE THE IDEA OF BEING ABLE TO OFFER PEOPLE HEALTHY DELICIOUS FOOD AND WE SAY ‘YOU CAN MAKE FRIENDS WITH SALAD’ ” ~ Mother & Daughter, Sandy & Sarah

VISIT www .

ALL THE IN sumosaladfranch FORMATION ise.com FOR Y O U NE HEALTHY B USINESS CHED TO MAKE A OICE

EDITORIAL

Welcome to our new-look magazine.

Inside Franchise Business is the must-read guide to buying a franchise in Australia.

As the leading consumer magazine for the past two decades Franchising magazine has delivered advice, business opportunities, industry overviews, trends and profile articles to generations of readers looking for key insights as they progress towards buying a business.

So what better time to give the brand a facelift than its 30th birthday? As we head into the third decade for this industry stalwart, Franchising magazine becomes Inside Franchise Business. The new name reflects the company it keeps: sister publications Inside Small Business and Inside Internet Retailing are already part of the Octomedia Group which has Inside Retail as its flagship.

Now we are proud to be joining this go-ahead media team with big plans for the future and asserting our association with our new name.

It’s the perfect match for our website www.franchisebusiness.com.au, which has for 11 years been the online directory of the Franchise Council of Australia, and not only provides a comprehensive list of franchised businesses for sale, but in-depth brand profiles, and extensive advice, news and profile information.

We’ve freshened up the content too, packaging invaluable information about buying a franchise into a series of six themed issues over the year.

In this edition you’ll find an introduction to franchising, and everything you need to know about how it works, why it’s successful, and the key elements you need to consider.

It’s easily packaged in one section, so everything is at your fingertips.

Why not subscribe to ensure you don’t miss out on valuable advice? Sign up to receive the magazine and you’ll get each issue delivered to your door. Easy.

We’d love to welcome you to the Inside Franchise Business family, and help you on your way to achieve your dream of business ownership.

Sar a h

Sarah Stowe Editor

EDITOR

SENIOR ACCOUNT MANAGER

JOURNALIST

CLIENT SUCCESS MANAGER

SUB-EDITOR

MARKETING MANAGER

Sarah Stowe P: 02 8224 8371 sarah.stowe@octomedia.com.au

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JAN / FEB 2017 | 5 | WWW.FRANCHISEBUSINESS.COM.AU

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GLOBAL EYE

AROUND

THE WORLD ASIA NEWS Aussie brand Wasabi Warriors to grow in the Middle East and North Africa 7-Eleven Malaysia continues to expand network Spar to open 300 stores in Thailand

UK NEWS Skinny kebab franchise German Doner Kebab plans 92 UK stores in three years Pizza business Papa John’s sees a future with students and opens university store Beat Theory Fitness (founded by a former footballer) is now recruiting franchisees

US NEWS 7-Eleven introduces sustainably sourced coffee for the first time Martial arts infused gym Tapout Fitness opens flagship club in New York Neapolitan pizza concept Pupatella will begin franchising

TECH & INNOVATION AMAZON LAUNCHES RESTAURANT DELIVERY IN LONDON Amazon Restaurants, a service available in select areas via the Amazon Prime Now app, allows customers to order food from partner restaurants for delivery within the hour. It competes directly with Deliveroo and more recently UberEats in London.

Amazon says there are no menu markups or hidden service fees, and delivery on all orders is free for those with paid Prime memberships with a minimum order.

HEALTHY VENDING AT US AIRPORT Vending with a difference: organic, gluten free, low-salt, sugar-free and low-calorie products. Gilly Vending will land its fleet of machines at San Francisco International to start the airport’s new 100 percent healthy vending contract.

JAN / FEB 2017 | 6 | WWW.FRANCHISEBUSINESS.COM.AU

DOMINO’S DELIVERS DRONE SERVICE Domino’s Pizza Enterprises and Flirtey, a drone delivery service, are launching the brand’s first-ever drone-based “store-todoor” deliveries in a test among select customers in New Zealand. The two companies plan to increase pizza-by-drone deliveries in the near future.

CHICK-FIL-A’S USER CHOICE WEBSITE The renowned US franchise chain Chickfil-A, has unveiled its new look website. The site is tailored to each individual user by offering customised content and localised information.

WORKING FROM HOME? RESTAURANTS LOSE According to the US Census, 13.4 million people in 2010 worked at least one day at home every week, an increase of more than 4 million people (35%) over the course of a decade. However overall foodservice traffic has dropped 4 per cent at lunchtime in the latest quarter ending June 2016 versus the same quarter year ago. This decline is mostly affecting casual dining and fast casual restaurants.

GLOBAL EYE

WHAT’S HAPPENING

IN FOOD AUSSIES SPEND $45BN EATING OUT A major new market research report shows that Australians spend $45 billion a year eating out – that’s nearly $100 per household each week.

There are 24 million Australians, and they eat out on average two to three times a week. That’s more than 50 million meals out each week, or 2.5 billion in a year.

There are nearly 82,000 dining places for Australians including 22,000 restaurants, almost 7,000 pubs and bars, more than 29,000 fast food outlets and 21,000 cafés and coffee shops.

But cuisine choices are changing as Australians choose to eat healthier meals.

The eating out industry is competitive, has low costs of entry, and comparatively little regulation. There is a high turnover of venues entering and leaving the industry.

The data is contained in a new report Eating Out in Australia.*

What to consider: • A venue’s average annual income from meals – eat in and takeaway – is $533,000 (café average $350,000).

• Staffing issues are the biggest challenge facing the industry.

• Venues are reporting a rise in healthy foods and cuisines, with less healthier offerings in decline. Traditional fast food chains are increasingly offering heathier options. Cuisines like Japanese are becoming more popular, as opposed those regarded as less healthy, such as steak houses. Old favourites like Chinese and Italian are declining (though still popular).

• More people are eating restaurant meals at home, brought to them by delivery services. But while operators may be predicting big things consumers are slow to take up this option.

• Alcohol consumption is declining. Most restaurants, and fair proportion of cafes and fast food outlets, either serve alcohol or allow their customers to bring their own. BYO restaurants are in the minority, and very few clubs and pubs allow alcohol of any sort to be brought in.

GUILT-FREE? If dining out or eating on-the-go leaves you feeling guilty, you’re not alone. According to a recent survey, up to 55 per cent of Australians are experiencing ‘post meal

regret’, and for 3 million Aussies these feelings of guilt occur most of the time after dining out.

The Jamaica Blue Healthy Eating Study, conducted by Galaxy Research reveals: • Women (61%) are more likely than men (48%) to feel guilty about the food they have eaten while dining out; • Younger Australians 18-34 years (68%) are more likely to experience post-meal regret, compared with those 35-49 years (57%) and those 50 years and older (44%).

When it comes to manufacturers’ health claims nine in 10 Australians are sceptical: just over one third of respondents distrust marketing that lacks research or an independent endorsement. Others call out ‘low fat’ food claims (53%) and conflicting information about specific foods (45%) as cause for concern.

Reflecting on the prevalence of guilty-eating, Drew Eide, brand manager for Jamaica Blue, says demand for healthy food is clearly front of mind amongst the majority of Australians.

“Over 80 per cent of respondents place high importance on healthy options being available in cafés and restaurants,” says Eide.

AN URBAN

CRAVEABLE

Forget the food court, think food hall. With the rising costs of leasing, food halls have becoming a growing trend in the US. These indoor markets can house any combination of full-service restaurants, casual dining eateries, fast food, fresh produce stalls, artisanal outlets, communal dining spaces, lounges...there’s even a Nutella Bar at Eataly Chicago.

Larry Reinstein, president of US based LJR Hospitality Ventures says to stay current and relevant in the competitive fast food and restaurant sector, eateries should maximise value with a focused menu, serve craveable food and champion customisation.

OPPORTUNITY & CUSTOMISED The rise of sushi tacos, Asian-style fillings in a shell, has taken the US by storm. It’s quick easy, and consumers can have one as a snack or buy a few as a heavier meal.

*Report by publisher Intermedia which publishes titles such as Hospitality Magazine and Australian Hotelier.

JAN / FEB 2017 | 8 | WWW.FRANCHISEBUSINESS.COM.AU

Love your work!

Make it a reality with The Cheesecake Shop.

Many people just dream about doing a job they love. Why not make those dreams come true by owning a franchise in The Cheesecake Shop. You can be your own boss!

Bake tasty masterpieces all for the world to enjoy! And most of all you can enjoy your days working with those you love.

franchise.cheesecake.com.au

INSIGHTS

CONNECTING

THE FUTURE A flexible, digital world offers plenty of opportunities for those willing to embrace change.

JAN / FEB 2017 | 10 | WWW.FRANCHISEBUSINESS.COM.AU

L

ife today is frenetic. We’re working longer hours, and because we’re more connected, there’s a strong reliance on digital devices.

So that means, the distinctions between work and leisure are blurring. And this hyperconnected world brings its own challenges.

population and 79 per cent in developed countries.

The 2016 Digital Consumer Index suggests society is “on the brink of another technological revolution” that is all about the fusion of technologies.

So how is business embracing the new world?

How do you navigate this supposedly flexible future? The opportunity to run your life the way you want is held up as ideal but you still need to make a living in a less secure working environment.

Think of the key terms we hear daily - the sharing economy, and disruptors. Uber, Airbnb, Netflix are all high profile examples of businesses that have fundamentally changed consumer behavour.

For some people that means adapting to the casualisation of work. The youngest generation sets store on flexibility, and this is reflected in the increasing mix of working patterns - casual, part time and telecommuting.

In the logistics business Richard Thame, Fastway Couriers CEO in Australia, has harnessed the digital trend for the franchised business.

For others there is the opportunity to start a business and set their own boundaries.

A UK survey has found the most common reason for people to change jobs is to improve work-life balance. UK residents are feeling stressed, tired and depressed due to lack of spare time: 61 percent reported in the eHarmony study they were not getting enough down time, 15 percent believed they have “no time” at all.

Incomes are on the up but there constraints on our freedom.

A recent Euromonitor report The global struggle for work-life balance and its impact on consumer markets pinpoints today’s work/life challenges as: • Salary growth • Rising expenses • Increasing hours • More responsibilities at work and home According to recruitment firm Hays, flexibility needs to be redefined. The working week is moving towards 24/7 in many knowledgebased sectors so Hays suggests the concept of work-life integration rather than work-life balance is more appropriate.

Digital devices and laptops are integral to the crossover of work and leisure, and encourage a 24/7 availability mentality.

So while that can be challenging for employees, it opens up a raft of opportunities for business.

Internet users have doubled in the last seven years - there were 3.2 billion users globally last year. That’s 43 per cent of the worldwide

JAN / FEB 2017 | 11 | WWW.FRANCHISEBUSINESS.COM.AU

Thame says “With three in four internet users in Australia now shopping online, delivery demand is going to continue to climb.”

And so pre-Christmas the business embraced the share economy with its Blu Courier concept: boosting franchisees’ capacity with flexible workers - drivers signed up for peak times.

A digital strategy is now essential for every business.

In retail mobile commerce and online purchasing are on the rise, and many retailers are turning to an all-embracing omnichannel offering.

David White, national leader of Deloitte’s retail, wholesale and distribution group, says “What we are seeing is a convergence between bricks-and-mortar operators and online. Instead of a head-to-head fight with digital channels seeking to replace physical stores, the channels are working together to provide the customer with an integrated offering.

“Digital isn’t just a sales channel. It’s also a way of empowering and connecting with the consumer, and is more effectively being used to increase foot traffic to bricks-and-mortar stores and increase basket size.

“But underlying this, significant change is taking place in terms of what these new bricks-and-mortar stores look like and the role they perform.

“New stores are becoming intertwined with retailers’ online offering, store layouts are changing, interactive technologies are being introduced, and the customer experience is being transformed.”

Just think of tech-focused Domino’s: the constantly innovating pizza chain has reported a significant 36.9 percent rise in online sales across Australia and New Zealand.

Staycation, or skipping holidays altogether are all ways that consumers respond to less time and greater anxiety about being away from work.

• Cafes and casual dining • Takeaway and home-delivered food • Customised menus and self-service kiosks

But the biggest shift is coming to the travel world, predicts Euromonitor. It anticipates that more than half (58 per cent) of all travel bookings will be done online by 2020.

Digital entertainment is all about mobile, with music, videos and games consumed on the go, anywhere, anytime.

OUTSOURCING CHORES

In contrast, only 11 per cent of retail sales are expected to be digital, and just 7 per cent of food service revenue will come from online.

Delivering the convenience of online ordering is crucial, and particularly important for the nine out of 10 Millennials who use home delivery. However the survey of more than 1000 Australians conducted by global open location platform company, HERE, also found 27 per cent of respondents believed home delivery services to be overpriced.

The survey revealed nearly a quarter of Australians (24 per cent) would like to avoid the chemist prescription queue with homedelivered pharmaceuticals, while one in six want to support their local shopping strip and independent stores without having to leave home.

We are convenience driven, digitally savvy, less bound by traditional work hours, time pressed and constant consumers of information and entertainment.

That’s great for businesses which can adapt to suit the ever-changing market.

LEISURE TRENDS Experience not possessions is the key to how people use their time off. Consumers are looking to attend events or take part in sports or fitness classes, suggests Euromonitor.

And the short break, the newly-named

Social networking managed through social media is replacing meeting up with friends and family. We Are Social reports the global social media base had reached more than two billion two years ago.

The use of fitness devices and applications have been a positive in the leisure field.

TRAVEL BOOST Global travel and domestic trips are both on the rise and this sector will be most affected by the digital shift, predicts Euromonitor.

OPPORTUNITY: • The new-look, hi-wired budget accommodation suited to modern travellers • Serviced apartments catering for business guests and families • Customised travel

DINING ON CONVENIENCE Interesting food experiences are on the menu. Consumers are looking for fresh ingredients, simple preparation, variety, and flexible formats.

“Third party delivery businesses have emerged as consumers seek out ways to maximise convenience,” the Euromonitor report reads.

This could be restaurant meal deliveries or the ingredients for a home-cooked meal.

Cafes are a popular global choice for socialising and for business and informal meetings.

OPPORTUNITY: • Coffee outlets

Busy consumers are turning to a raft of new businesses to take on the everyday errands and chores they are too busy to complete.

The HERE survey discovered on-demand labour services could be the next step for the industry with 22 per cent wanting a pickup/ drop off auto repair service for their cars, while one in 10 want cleaning, maintenance and DIY jobs at the tap of a smartphone app.

OPPORTUNITY: • Domestic services • Personal services • Landscaping/gardening • Auto services • Tutoring

OUTLOOK The middle generation will be facing the commitments of caring at the same time for both elderly parents and children, and will themselves be pushed to work beyond retirement age.

But a shrinking workforce means improved flexibility and employee benefits will be increasingly important for employers to attract and keep staff.

“A recent concept that may take off is wellbeing leave, whereby workers are offered extra days’ holiday to spend on wellness activities.”

There will be more time spent with friends and family, thanks to digital connections, but this connectivity will encroach on leisure hours.

Boundaries no longer exist: think work-life integration not work-life balance. 

JAN / FEB 2017 | 12 | WWW.FRANCHISEBUSINESS.COM.AU

BE IN BUSINESS WITH A CUT ABOVE THE REST

We set out in 2009 to change men’s grooming as it was known. The original barbershop had lost its shine, the trade wasn’t as available as it once was and the tradition was being eroded by modern trends. We wanted to reintroduce the barbershop experience and make it relevant today, the market demand and desire was there.

Now, with over 60 stores internationally, Tommy Gun’s is rapidly expanding. Join us and become a franchisee today. Become a part of Tommy Gun’s revolutionized barbershop experience. franchising@tommyguns.com.au tommyguns.com.au/own-a-franchise 07 3215 6050

THE LIST

15

FAST GROWING FRANCHISES T

he franchising sector comes with a range of categories to choose from, with brands offering unique models and support systems. Many have aggressive growth plans, whilst others take a conservative approach to expansion.

We take a look at just some of the fast growing franchise businesses in the sector.

1

GUZMAN Y GOMEZ

Fresh mexican chain Guzman y Gomez plans to open about 20 taquerias in Australia each year. A brand new flagship store with a fresh, sleek look was unveiled last November in Sydney’s Australia Square.

The brand has also been successful in its Asian expansion across Japan and Singapore, with more outlets set to open in both countries this year including one in the Disney Tokyo entertainment precinct.

2 3 4

JONNEE COFFEE

New computerised barista machine franchise Jonnee Coffee is a vending business which debuted at the Melbourne Franchising and Business Opportunities expo. In September 2016, the founder and CEO said in the next year, the brand is planning to open 1000 franchises nationally, with a focus on metropolitan areas.

5

salts of the earth

Salts of the Earth offers salt therapy for symptom relief from both respiratory and skin conditions. This is a natural therapy that cleanses the respiratory system, detoxifies the body and promotes health and well being. The brand won the NextGen Franchising title at the 2016 MYOB/FCA Excellence in Franchising Awards, and in October announced it is gearing up for 50 new franchises in the next 12 months.

6

inxpress

pack & send

The global courier and freight sales consultancy network announced a two pronged growth strategy, with 40 franchises planned in three to five years in Brisbane, Adelaide and Sydney. The second strategy will target satellite cities to the capitals such as the Gold Coast, Sunshine Coast, New South Wales Central Coast, Wollongong, Geelong then further into the larger rural areas such as northern Queensland, Launceston, New England, Ballarat, Bendigo, and Queensland’s Granite Belt.

zambrero

7

Parcel courier and freight reseller franchise Pack & Send is expanding nationally with a focus on Sydney and Melbourne, projecting in June 2016 that 15 new franchises are set to open in the next year. In November 2016, the franchise offered a small business grant for Australian small businesses that currently use a postal, courier or freight provider to operate their business.

Quick service Mexican restaurant chain Zambrero had a big year of growth in 2016, opening its 150th outlet in November, and another six stores in Queensland, New South Wales, Tasmania and South Australia which were set to trade before the end of the year. Rapid growth is set to continue in 2017 with plans for further overseas expansion.

In 2014 the brand opened outlets in Thailand and New Zealand; in March 2016 it unveiled a store in Ireland.

jump! swim schools

This swim school franchise runs competency based learn-to-swim programs within a model based on small, purpose built venues. Programs are designed for infants, and extending to stroke correction for older children. In August, the franchise announced plans to open another 50 in the next six months while leases have been signed in Brazil, Singapore and New Zealand.

JAN / FEB 2017 | 14 | WWW.FRANCHISEBUSINESS.COM.AU

8 9 10

BEGIN BRIGHT

Education franchise Begin Bright was established in 2011 and specialises in helping children meet their academic goals. The brand has ambitious goals for next year, planning to reach a total of 80 units and expand into three countries. The franchise plans to open 50 new franchises in 2017.

LIV-EAT

Liv-eat offers take-away healthy food in the form of salad bowls, toasties and fresh juices and coffee.

The franchisor said there is ‘no limit’ for the brand’s national expansion which is set to open 10 new stores each year.

12 round

This fitness franchise model offers short, high intensity interval training programs, allowing members to start every three minutes. In October, the franchisor announced plans to open an additional 20 clubs open next year with a minimum of one site in each state and territory. Most clubs are expected to be on the east coast, with plans for Western Australia, South Australia and the Northern Territory to mobilise in the first six months of 2017.

11

narellan pools

In the business of selling in-grown fibreglass swimming pools, Narellan Pools has been operating for more than 40 years. In August 2016, the franchise was set to recruit a further 17 franchisees the year on the eastern seaboard. The plan is then to fill all remaining franchise territories across Australia. In November, the brand announced that there has been a shift in the typical recruitment of pool builders and landscapers toward business people.

12

tommy guns

Tommy Gun’s Original Barbershop is a men’s grooming destination with more than 50 outlets in its home base, Canada. The business began in 2009, offering old-school straight razor shaves through a hot towel and oil shaving system. Franchises also have a retail component offering men’s grooming products. Expect to see more barbershop franchises opening up: 10 stores already operate in Australia and 20 new sites are planned nation-wide.

13

ella rouge (australian skin clinics)

In August 2016, health and beauty business Ella Rouge Beauty merged with the Australian Skin Clinics franchise, which was acquired by Hairhouse Warehouse in early 2016. The merger of the two medi-aesthetic businesses will see all the Ella Rouge Beauty stores rebrand to Australian Skin Clinics with the latter’s portfolio growing from 25 stores to 50 stores. Further growth plans in August included more than 20 new clinics in the 2016/17 financial year and another four clinics in New Zealand over the next year.

14

under wraps

15

massage envy

Under Wraps is a family-owned healthy food franchise which underwent a menu revamp in June 2016 offering breakfast items with Paleo and vegan choices and fresh supplements added to juices and smoothies. The franchise also announced expansion plans to grow by 40 in the next five years in both metropolitan and regional areas.

Massage Envy, a US wellbeing brand, comes to our shores with experienced master franchisee Justin McDonell, who was part of the team behind Anytime Fitness in Australia. Massage Envy USA has 1100 locations across the country, while the nearest competitor has 250. The Australian growth strategy is to reach 150 outlets within the next five years, predominantly in metropolitan locations in Sydney, Melbourne and Brisbane. 

JAN / FEB 2017 | 16 | WWW.FRANCHISEBUSINESS.COM.AU

COVER STORY

Making a

SPLASH Poolwerx founder John O’Brien knows about jumping in the deep end when it comes to franchising, but he knows all the right strokes and has the awards to prove it, writes Sarah Stowe.

JAN / FEB 2017 | 18 | WWW.FRANCHISEBUSINESS.COM.AU

One of our obligations is to constantly look under rocks and stones for new opportunities.

W

hat does it take to turn a franchise into an awardwinning business? Poolwerx founder John O’Brien must know – he has done this twice already.

For the second time in 12 years, he has just won the Franchise Council of Australia’s Established Franchisor of the Year Award.

He can reflect with pride on his achievements in building a 100-strong retail chain in Australia backed by a fleet of 400 vans.

It is a long way from his first experience with franchising, when as a corporate employee, he was tasked with turning 400 delivery drivers in to owner-operators at Cadbury Schweppes.

“The business was not going so well, and my boss came back from the International Franchise Association conference in the US and told me I had been promoted to national franchise manager. I had no idea what franchising was, and wasn’t sure if I had been promoted or demoted.”

Thanks to the experience of industry stalwart Rod Young, who had had 10 years working for a franchisor and owning a franchise, O’Brien got to grips with the challenges and demands of franchising. Within a year some of those regional franchisees had become master franchisees.

JAN / FEB 2017 | 19 | WWW.FRANCHISEBUSINESS.COM.AU

“The ACT was the last area left. I convinced the company to grant the franchise to me, with 12 trucks. Then I took on the master franchise for Western Australia and Queensland. I was on a fast track. I was the youngest guy in the company globally reporting to a board. They even offered me New Delhi and Bourneville in the UK.” But O’Brien saw his future elsewhere.

“I come from an entrepreneurial family, growing up around hotels. I always had the intention to go into business for myself.”

So at 28 years old he took the franchising path, buying, running and selling a string of businesses.

DISORGANIZED ROUTE When his brother Michael died in 1995, O’Brien took a six-month sabbatical and decided to look for a longer-term opportunity, something in which he could really make his mark.

“I was looking for a disorganised industry, something with mobile service roots, high gross profit margin, repeat customers.”

What he spotted might have passed unnoticed to a casual observer: a truck with pool poles in the back, driven by a tattooed surfer. Further investigation proved he had found what he wanted: a disorganised sector on a local and global level.

“I bought a few vans and a 40-year-old business, and launched on Australia Day 1996 as Poolwerx.”

The first concept store at Middle Park in Melbourne was corporate owned.

“Typically pool stores were chemical, smelly, dirty and dusty with unfriendly staff. We set about creating a retail environment for the consumer.”

It was an environment that appealed to female customers, and today women aged 45-64 continue to be important decision makers.

“Australia has the highest standards in the world for the pool industry,” says O’Brien.

He cites the 80 per cent of equipment and chemicals sold by professionals in Australia with just 20 per cent bought in mass-market outlets to the 50/50 sales in the rest of the world.

Today the pool retail scene comprises nearly 1000 outlets, with 100 of these having Poolwerx branding.

Unlike competitors who had kept their mobile and retail businesses separate, Poolwerx has a clear career path for franchisees. Following the group’s “four tiers in five years” mantra means a franchisee buying a mobile business for less than $100,000 can work their way up through the four stages of ownership: a single van, multiple vans, hub and spoke retail model, multiple retail outlets.

O’Brien sees this as an answer to a common franchising problem: “When you can afford to buy, you’re a bit old to put in the energy.

We want to bring in younger people.

His strategy was to be purposely mobile, rather than competing with retail chains Clark Rubber, Poolside and Swimart. “Mobile was our DNA. We focussed on being the best at service, with good systems and employing best practice.”

“The ethos was to create bigger opportunities for franchisees to grow into. It’s an integrated franchise model where vans drive business to the retail outlet, and stores drive business to the vans. Now people can buy in at any point. That’s working for the experienced small-business owner and mid to senior executives who are taking up franchise opportunities.

By 2004 the business had entered, and won, its first Franchise Council of Australia award. “We were the smallest brand to win Franchisor of the Year - we had 200 trucks.”

It was at that point O’Brien committed to moving to a new model.

“We wanted to be in business with business people. There’s a lot of leverage in that we saw it as the future of franchising. This means we need to be far more strenuous in training needs, to find out exactly the skill gaps.”

“We needed to reinvent ourselves with both mobile and retail. Retail caters for DIY, mobile is ‘do it for me’.”

Retail franchisees now complete the standard three-week learning program and an extra week dedicated to retail. Forming

good habits is the key, and a three-month program of support has been extended to 12 months.

There is a retail suite of three former franchisees who consult back to the business.

They go in-store on opening day and are “shoulder-to-shoulder” for three weeks.

“We’re in this together, everyone does their bit, it makes sense,” says O’Brien.

Franchisees approach.

seems

to

appreciate

the

“We have Greg Nathan’s Franchise Relationship Institute conducting a satisfaction review every year, and the result for seven years is that we’ve done better than the benchmark - double-digit growth,” says O’Brien.

FRESH VALUES However, a few years ago O’Brien found himself in a crisis.

“I was coming out of a divorce, and had lost my way as a leader - but I didn’t know it. We got ourselves in a mess with partners, and were on the cusp of a franchisee revolt. There were two options: either bury my head in the sand, or confront it.

“We had a leadership meeting offsite with a theme, ‘how do we stop this?’.” It resulted in O’Brien realising he needed to be more collaborative.

“We had values, but they were all mine. At the national conference I tore them up, and from there we sought suggestions for our five values. It took a year.”

The system is called “odyssey”, a Greek word that translates to “journey”. It’s one way, one journey, says O’Brien, who believes that constantly refining the values has been a critical part of the business’ success.

“A franchise partner joins your brand because they want your system. They are not coming in to change it. We want them to bring in their entrepreneurship, their energy. We call it being an intrapreneur.

“For the first 12 months there’s a focus on energy. Then they can start to be entrepreneurial, and we can see how their experience can bring in new ideas.

JAN / FEB 2017 | 20 | WWW.FRANCHISEBUSINESS.COM.AU

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“In some systems there’s an arbitrary limit on growth. Our view is we’re entrepreneurs by nature and we want you to come into business to have the opportunity to do something for the family. We have an important obligation: to encourage people to grow.

“Our view is, if you have a site that’s doing well, get into a second. We have a guy in Phoenix with five. We’ll pick it up between us if you go too far.”

This is the Dare to Succeed value in action.

And with 65 per cent of the company’s growth achieved through multi-unit franchising, it is a crucial element.

The company’s core values are: People First Always, Do The Right Thing, Dare To Succeed, Find The Better Way, Energise.

Value For People is first for a reason, says O’Brien.

“Head office, supply, customer, franchise – every answer is in your people. If it’s not working, check who you choose, your training, your remuneration. You can have the best model and the best system, but if you don’t have the people it all falls down.

“I started with Cadbury Schweppes, in HR. It was the luckiest thing I did.

“Franchising is all about people delivering the brand and the system.”

Poolwerx was one of the first franchises to employ an HR specialist and today has a team of six or seven in the expanded division of HR, learning and development. HR audits and coaching are run through head office or in consultation. There are 1000 people in the business, and each employee gets a review and has an incentive program.

For franchisees, a structured set-up of support includes a Poolwerx Advisory Council and a regional version for each of the five regions. All representatives are elected by franchisees and meet monthly, and a chair on each sits on the national council, which also meets 12 times a year.

O’Brien sees change and innovation as crucial, believing people in the network are open to new ideas from the Poolwerx Advisory Council, from senior franchisees, new franchisees who come from other brands, and the leadership team of four.

There is also a senior leadership group and senior business management team.

“One of our obligations is to constantly look under rocks and stones for new opportunities.”

Three years ago the charter for these councils was revised to a single page, which highlights that items can be put on the agenda only if they help advance the whole business.

In the mobile model he created a division for commercial clients, then found six disparate sectors within that. In retail, the business is developing pool-fence rectification, renovation and pool solar innovation.

INNOVATION, EXPANSION

“We’re a pool service and retail business that uses the franchise model. Technology is an enabler, it never replaces execution.”

“We’ve always had a 10-year rolling plan,” says O’Brien.

“We have a very clear plan, supported by structure. We stay on track with an 8am senior meeting every week.”

In the eight-week period before Christmas, Poolwerx had eight store openings planned - four multi-unit franchisees extending their portfolios, and four greenfield sites with new franchisees.

What technology enables is for the franchise method and franchisees to flourish, and it allows for higher customer contact time, says O’Brien. “What we’ve done we’ve done as first movers.”

After nine years with one provider, Poolwerx is changing its Point of Sale provider. “Every facet needs to be interlinked, compatible, global, accessible and app friendly.”

“We exhibited in 2007 and 2008 in Paris and Washington, but we saw the economic storm clouds and went home.”

For the first time, a chief information officer has been appointed and heads up a team of four.

US expansion has sped along since Poolwerx eventually launched there in 2015. There are now 20 stores and 90 vans over five states, and six further outlets set for unveiling as 2016 drew to a close.

“Winning the award is great validation by our peers that we’re on track… It’s not the franchisor, it’s the brand winning.

McDonald’s founder Ray Kroc’s book Three Legged Stool was a big influence for O’Brien.

“I read it when I was beginning, and we wouldn’t be where we are today without it.

The business has partnered with its global suppliers, Spanish and Swiss companies, who have seen the model is first class, says O’Brien. Over the next 12 to 24 months, Poolwerx will be dipping its toes into new markets through acquisitions. Europe and South America are in its sights.

“We have Partners in Profit, and have used this language for 20 years. We had to educate our suppliers about this. As an example, we have three-day conventions with about 60 supplier reps and no closed doors.”

“We launched the plan, appointed an external board with three non-executive directors and Rod Young as chairman. They hold us to account. The senior leadership team is the last piece.”

“It’s a third-party endorsement for people thinking about investing in the brand, it gives financiers more confidence, and our stakeholders and franchisees can put out their chests and be brave.”

The network has had franchisees and franchise support staff also win national awards. So is he looking to add another franchisor trophy to the cabinet?

“We would need to be mature – that’s 350 stores - before we enter again.” 

JAN / FEB 2017 | 22 | WWW.FRANCHISEBUSINESS.COM.AU

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LEADERSHIP

AN

EXTRA SLICE OF ACTION

Franchisees from the beleaguered Eagle Boys pizza chain can see a future now the brand has been bought out by Pizza Hut.

F

ollowing the buyout of the Eagle Boys pizza chain by Pizza Hut, the first re-branded store has officially opened in the Sydney northern beaches suburb of Collaroy.

It is the initial step in a national rollout that will take Pizza Hut’s Australian network to more than 320 stores. About half of the 50-plus stores from Eagle Boys will make the switch by the end of the year. Second up is Umina on the New South Wales central coast, followed by, in order, stores in Western Australia, South Australia, the Northern Territory, regional New South Wales and Queensland.

The expansion is the first major move in reinvigorating the Pizza Hut brand, which is under Australian management for the first time.

Pizza Hut Australia CEO Lisa Ransom says the company is thrilled to be working with a new group of passionate pizza franchisees from Eagle Boys.

A private equity fund manager, together with a local management buy-in, has acquired the master franchisee licence for Pizza Hut in Australia from US-based parent company Yum! Brands.

“The future is all about growth and innovation. Converting stores into Pizza Hut outlets over the next few months is one way we are bringing a dynamic new energy and fresh customer focus to the market.

It’s a significant opportunity to grow the distribution and brand presence of Pizza Hut, and for our customers to take advantage of the economies of scale that come with being a bigger organisation.”

Ransom tells Inside Franchise Business that existing franchisees are the company’s first priority, and that not all stores from the Eagle Boys chain will be rebranded.

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WILL PIZZA HUT’S EAGLE BOYS BUYOUT BOOST BUSINESS? IbisWorld senior industry analyst Andrew Ledovskikh says Pizza Hut’s acquisition of Eagle Boys and the possible expansion of its dine-in service offerings are expected to be costly for the franchise.

“There are four main competitive elements in the fast-food sector: price, convenience, quality and healthiness. Pizza Hut has been struggling to stake out a distinct advantage in any of those areas. Its aggressive discounting in 2014-15 failed to boost its market share and also made many of its franchisees unprofitable.”

Its acquisition of Eagle Boys is expected to increase economies of scale, boost the

value of the advertising dollar and improve the company’s ability to compete on price.

Expanding the dine-in services - available in a limited number of stores and mostly in rural areas - could boost short-term sales, but it runs counter to consumer trends and could hinder profitability over the long term, says Ledovskikh.

Consumers have become increasingly health-conscious and over the past five years have been looking for premium products.

“The pizza restaurants and takeaway industry is facing a difficult market, and Pizza Hut will need to be innovative to make its acquisition a success,” says Ledovskikh.

“The franchisees who fit with the needs of the network have been signed up. Pizza Hut will talk to the rest of the Eagle Boys franchisees about opportunities that do not conflict with existing Pizza Hut stores.”

experienced franchisees with a passion for their business, who can offer good insights, and diversity of thinking.”

IMMEDIATE FOCUS

Ransom acknowledges the success Domino’s has achieved with its technology focus, and says such an approach is crucial to the Pizza Hut business, with the focus on how customers want to interact with the brand.

Immediate focus is on the conversion process, and Ransom says the extra 50-odd stores can easily be absorbed into the infrastructure.

“That’s why this is a good opportunity for Eagle Boys’ franchisees - there won’t be a change to costs, and that’s an advantage.”

Collaroy’s new store is run by Michael Cooper, an Eagle Boys franchisee for seven years. He says he is looking forward to the opportunities that will come from being a part of a revitalised Pizza Hut. “It’s an exciting opportunity to be a part of the re-invention of Pizza Hut. The acquisition means we can continue to trade. The marketing opportunities will increase dramatically, and I’m looking forward to seeing the planned product innovation and digital platforms.

“Working with such a driven and experienced leadership team will also help to grow my own business strengths.”

So what has Eagle Boys done well that Pizza Hut might adopt?

“I’ll be taking a good, hard look at the menu to see what we can retain or bring back when relevant,” says Ransom, but she says the strength of the network comes with the franchisees themselves.

Pizza Hut’s Collaroy franchisee Michael Cooper was with Eagle Boys.

We believe that meeting customer needs, providing good value in a timely way and making it easy to order will be a big part of driving business.

“Eagle Boys franchisees are very strong, and we’re bringing their thinking into our system.

There are obvious advantages to bringing in JAN / FEB 2017 | 25 | WWW.FRANCHISEBUSINESS.COM.AU

FRESH THINKING

“How do we meet their needs? We’re looking for something slightly different. We need to be more relevant, make it easier to engage with customers.”

A new management team has injected some fresh thinking into the Pizza Hut business, but it is not about to turn its back on the successes of the past.

“There is lots of consumer passion for the dine-in model. We have the opportunity to bring back some customer favourites,” says Ransom. “We believe that meeting customer needs, providing good value in a timely way and making it easy to order will be a big part of driving business. Value is not always price driven.”

People are passionate about the brand, experiential pieces, the taste and quality of some of the hero menu items, she says.

“It’s about drawing on the old favourites in a modern way.”

With the brand a little quiet, there will be moves to boost its presence.

“I’m at the shoot for the summer campaign right now. We’re very excited about summer.

There’s a lot we can do to reignite the passion,” she says.

There will be a new focus on building a stronger, customer-centric approach, further embracing digital innovations and trends, adding stores, and building economies of scale to boost market share and profit.

pulled together a class action based on the pricing structure, it failed - but drew plenty of media attention.

Ransom says a price campaign is not going to be part of the Pizza Hut strategy. “We’ll be running our own race.”

So how is the company working to take the brand to the next level and mollify these disaffected franchisees?

In the battle of the big brands, Pizza Hut has been playing second fiddle to Domino’s for a while. The ability of Domino’s to drive technology alongside customer-friendly pricing has given it the edge in the market, and saw it prevail in a price war.

“We are experienced franchise people and believe in harnessing the passion of the community to work for everyone’s success.

When disaffected Pizza Hut franchisees

HANDS ON

“We’re opening our first company-owned store to work hand-in-hand with the community, to test, learn and grow our people. We’ll understand the profit model of the business in a hands-on way.

“We are fundamentally an Australian-owned entity working for the good of everyone.

Everybody has decided to make a fresh start, and we’re engaging with franchise advisory bodies and meeting individual franchisees to talk about opportunities. We want successful, happy franchisees.

“It is critical we reposition how we think about the business. There’s no denying we have not had the performance we want, and we are working collectively to make improvements.”

The management buy-in team has strong McDonald’s experience and has put professional and personal reputations on the line, says Ransom. “Franchisees can see how serious we are about the business.” 

JAN / FEB 2017 | 26 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

A SALTY

SOLUTION An 18th-century health therapy sparks a franchise that could provide a model to empower the next generation.

JAN / FEB 2017 | 28 | WWW.FRANCHISEBUSINESS.COM.AU

W

hile his first few months in business were an “incredible failure”, David Lindsay found success after TV exposure and has now won an award.

“My father has always been a sufferer from respiratory illness. When I went back in 2009 it was the first time I’d seen him anyway healthy, and that was after two and a half weeks using salt therapy.”

He has scooped an award in the Franchise Council of Australia’s NextGen competition for his Salts of the Earth venture, something completely removed from his original career as a skilled craftsman.

Over the years, Lindsay senior had consulted specialists about his lung condition, but to no avail. Lindsay junior, who had seen his father gasping for air while waiting for an ambulance, was startled to see the change in his father, who is now on minimum medication with his asthma attacks infrequent.

When the qualified stonemason left his native Ireland, it was to escape the Global Financial Crisis of 2007-08, which had brought to an end his multi-million-euro contracts. But it wasn’t until he returned home from Australia to visit family that he found his future.

Convinced of the value of the centuries-old salt therapy, he told his father, “I have to introduce this to Australia.”

He returned here with a sense of mission

and a whole new adventure ahead of him, and came to learn that there is no success without hard work - and a little luck. When he established his first salt room, in which clients breathe in pharmaceutical-grade salt containing trace minerals to ease respiratory and other conditions, he thought it was the “magic key”.

However, there was resistance to the idea and the concept was rejected by the medical community. Salts of the Earth was failing until a strong testimonial drew the attention of TV show A Current Affair. That changed everything, says Lindsay.

“It really helped, and we had opened our second centre within six months. People were flying in from all over Australia and New Zealand.”

Our model is all about franchisees working on their business, with some hours in their business.

JAN / FEB 2017 | 29 | WWW.FRANCHISEBUSINESS.COM.AU

open up, Lindsay says. “It’s all about releasing the congestion, and once this happens medication is more effective.”

Some conditions are seasonal, and customers can choose either an annual or a seasonal membership. Both allow for unlimited use of the salt rooms for a set fee.

“For the franchisee, this is recurring revenue,” says Lindsay.

And with increased custom came client interest in taking the concept back to their home towns.

“So that’s how franchising came about,” says Lindsay. “I didn’t have a clue, but now I’m very passionate about it. I think it’s an incredible tool to empower people to lead more successful lives, and create opportunities for themselves and their families.”

BEING TREATED AS A BUSINESS There are 19 outlets in the Salts of the Earth network, and Lindsay has plans for 50 more.

In 2010, the first salt room had just nine client appointments a month; now there are 24,000 appointments across the network.

In the past four months, monthly appointments have increased from 1500 to 1800.

Lindsay says an outlet, or “club”, needs 110 to 130 members to reach break even; 200 to 250 members is capacity. His clients are helping spread the word - 65 per cent of new customers come through word of mouth.

“We’ve adopted a client advocacy platform,” he says. As part of their agreement, franchisees must collect one testimonial and accompanying photograph each month. The images and testimonials are posted online and aimed at specific demographics.

“Social media is massive for us,” says Lindsay.

“We target our audience through Facebook, Instagram and with Google AdWords.”

This enables the small business to compete for share of voice with pharmaceutical companies. “We are building assets, because these sites are always looking for fresh content. We encourage people to do reviews as well,” says Lindsay.

The tagline for the business is “Salt therapy helps people live, sleep and breathe better”, so how quickly can customers expect to see results?

Result depend on the severity of the condition, but even after one salt-room session and a good night’s sleep, most customers will start to feel their airways

When franchisees start out they have one week of training in the support centre, and when their premises are ready, there is a second week of training in-store for the franchisee and staff members.

“A lot of people have set up salt therapy businesses thinking people will just walk in the door. Our model is all about franchisees working on their business, with some hours in their business. There is a minimum performance standard for the staff.”

Each outlet needs two staff members as well as the franchisee as it is a seven-days-a-week business, says Lindsay. “Our target market is everyone from the newborn to the elderly.

We take care of people with symptoms from colds and flu to emphysema.”

Asthma, eczema and hayfever are the three most common complaints treated at the salt rooms.

Franchisees are encouraged to engage with community initiatives. One example is a Salts of the Earth centre acting as a collection point for Nappy Collective, which delivers boxes of nappies to women in need or in crisis centres.

As well as community spirit, franchisees need to be willing to follow a system and work in a team, says Lindsay.

Sites are all in retail strips with easy access, plenty of car parking and a low rent.

Franchisees will be investing between $160,000 and $200,000, depending on the site, for a turnkey operation.

explanation of why franchising works for the business, the value-added proposition, how a business gives back to the community, and points of difference that make it special.

Three finalists had to present to a panel of franchisors in front of a franchiseexperienced audience.

“It was nerve-wracking,” says Lindsay.

“I’m good with a crowd of franchisees, I’m passionate about my business, but presenting to a couple of hundred people - I was pretty nervous.”

Meanwhile, he has had plenty of interest in his concept from the franchising community, with franchisors and franchisees from other business models keen to invest.

“It’s a very simple system and it offers high returns to those who get in and drive their business,” says Lindsay.

However, the showcase is not over yet.

The competition is part of a global contest to find the next best business ideas new to franchising, and as the Australia winner Lindsay will be heading to the US final in Las Vegas early next year to pit his business against other national champions.

“Going to the US will get our brand recognised by some of the largest franchisors in the world,” he says. “This gives us credibility that we’re not just a flash in the pan.

“We do things correctly, we follow the Franchising Code of Conduct, franchisees are delivering on our promise to the customers. We’ve slowly recruited for a couple of years. We’ve been building solid foundations with IT, software and ensuring our support is 100 per cent.”

Now the business is ready to scale up Australia - and beyond. Overseas expansion had been set for 12 to 24 months. Not now.

“With NextGen we’re hoping to start in 2017. We’ll start in New Zealand, but it would be great to get into the US with its state of healthcare.” 

WHERE NEXT? Understanding the numbers has been fundamental to Lindsay’s development of his business model. When he entered the Franchise Council of Australia’s NextGen competition he was confident in the financial aspect, but sought expert advice on the presentation.

“A lot of practice went into it,” he says. “I had a professional writer listen to me then produce a script. I know my numbers inside out, but you only have one chance. This was a showcase for the brand.”

Requirements for the competition were an executive summary outlining growth, an JAN / FEB 2017 | 30 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

CREATING

A FRESH BUZZ

Gloria Jean’s has plans to stir the market again with a shot of relevance stirred with passion – and it’s not just about the coffee.

D

amien Zivkovich joined the Gloria Jean’s Coffees business as a barista in 2001, working up to a corporate role.

When he returned to the business a year ago as channel manager responsible for distribution, he had notched up valuable experience with Krispy Kreme, Healthy Habits and UK newsagency brand WH Smith, which owns the Wild Card business in Australia.

Now he is the GM of his favourite coffee brand and is driving the business to the next level of hospitality retailing.

What attracted him to return to Gloria Jean’s Coffees?

“It has always been a part of my life, and when I saw there was a lot of work being done to make the brand great again it really excited me,” says Zivkovich, who has rebuilt the marketing, sales and food innovation teams, and is now focussed on the next stage of transformation.

In an industry that is fragmented and highly competitive, independent stores have been taking the lion’s share thanks to their passion and high level of sophistication in both the food and coffee offer. So where does Gloria Jean’s sit in this landscape?

Celebrating its 21st birthday this year, the brand is about to have a makeover that will bring it more into tune with today’s customer expectations.

“It’s an opportunity for growth for a wellrecognised and loved brand. We’re resonating with customers looking for a good cup of coffee each day, but the brand hasn’t evolved enough,” says Zivkovich.

While the company’s coffee capability and its roasting site at Castle Hill gives it a particular edge, it is one that has not yet been fully leveraged, he says. “We don’t let people know about our credentials, we don’t tell stories.”

However, that is about to change.

The single-origin blends, cold drips, pour-over or filtered coffee brews that a really good independent can offer are rarely available at chains which tend not to go to that level

JAN / FEB 2017 | 32 | WWW.FRANCHISEBUSINESS.COM.AU

of expertise. That gives Gloria Jean’s an opportunity: think single-origin, micro-lot and Swiss filter coffee, for example.

But it’s not just about the coffee - food will play a greater role in establishing a Gloria Jean’s outlet as a destination, he says. “Food is a big focus. We will be moving from a coffee house to a cafe model, with coffee remaining as hero.”

The challenge is to update the overall tone and feel of the venues to become more relevant to a targeted market [predominantly women aged 25 to 45 years] without alienating existing customers.

“The experience is the big factor. Gloria Jean’s needs to be a destination, a place for customers to socialise and have a coffee, whether they are teens, mums with children or business people.”

Add that to the Gloria Jean’s product and Zivkovich is confident people will be won over.

“The question is, how do we get that experience?”

Zivkovich talks of a more localised and community-based feel for each environment, providing a cafe outlet that hits the right vibe for the neighbourhood.

“Franchisees are buying into the brand, they need to be involved. It’s an exciting step.”

Part of the journey to reset the compass for Gloria Jean’s has been to work out where the brand can play and win.

The glory days of the food court may be over.

Hole-in-the-wall sites, the cafe model in strip locations, and drive-through models all have potential, says Zivkovich, with transport hubs, universities and hospitals on the radar.

While locations may change, this will be progressive with leases reassessed on renewal. The point is to set up franchisees to succeed, says Zivkovich.

A LONG ROAD...

Gloria Jean’s has been part of the Australian coffee scene for 20 years but has its origins in the US. It all started when Gloria Jean Kvetko and her husband Ed opened a small coffee and gift shop in a small town near Chicago. They wanted to serve specialty gourmet coffees in a warm and friendly atmosphere, a concept that took wings with outlets opening all around the US. They sold the franchise in 1993 for an estimated US$40 million, and the company began to expand offshore.

About this time Australian businessman Nabi Saleh and his business partner Peter Irvine set their sights on bringing specialty gourmet coffee to Australia. They opened the first Australian Gloria Jean’s Coffees store in Miranda, Sydney, in 1996.

“It was the first real coffee house,” says Zivkovich, “it took the market by storm. It was an American brand but given an Australian twist.”

By 2004, the brand had more than 200 outlets across the nation. At that stage, Saleh and Irvine returned to the US to buy the international branding and roasting rights for all countries outside of the US and Puerto Rico, setting up Gloria Jean’s Coffees International.

About five years later, Gloria Jean’s Coffees International bought out the brand’s US retail and franchise business.

JAN / FEB 2017 | 33 | WWW.FRANCHISEBUSINESS.COM.AU

We will be moving from a coffee house to a cafe model, with coffee remaining as hero.

By 2014, the business was looking for what Saleh described as “the right partner” and was in talks with a Singapore firm. After that deal fell through, Australian franchisor Retail Food Group stepped in. The Retail Food Group [RFG] portfolio includes Brumbys, Cafe2U, Crust Gourmet Pizza, Donut King and Michel’s Patisserie.

RFG acquired the Gloria Jean’s Coffees business for $163.5 million. The purchase included the global intellectual property rights for Gloria Jean’s and US brand It’s A Grind, management of the Australian and US regions, the franchise rights for 40 licences in international territories, and coffee roasting plants.

CEO Tony Alford described the opportunity as “compelling” and said Gloria Jean’s had been a long-term target for the multi-brand company.

“Gloria Jean’s Coffees genuinely transforms RFG into a global franchising powerhouse, driving outlet network population to circa 2400, and providing the company with access to numerous international markets and new revenue platforms,” he said.

BRAND QUALITY Zivkovich welcomes the reignition of the coffee brand, having seen it grow from an embryonic stage to several hundred outlets.

He credits the former owners for developing brand equity in the community, but the brand did have some low points, most notably social-media outpourings berating the owners’ association with the Hillsong Church and Mercy Ministries. More lately there has been comment on the Gloria Jean’s Cambodian franchise group’s link to that nation’s Prime Minister, an arrangement set in place before RFG came along.

“We will be approaching the broader community to say this is who we are, we have a new owner, and we don’t want to be seen to be excluding any part of the community.”

engaged Business Advisory Panel that brings together franchisee representatives with Zivkovich himself, the heads of product innovation, marketing and HR.

This subject will also be addressed by the company’s charitable arm, the Gloria Jean’s Coffees NFP foundation With Heart.

Zivkovich’s aim is for Gloria Jean’s over the next five years to become a destination “where people want to come to have great coffee, tasty food and a great experience”.

“The foundation side is quite strong and I want to strengthen it further,” says Zivkovich . “I see the good this company can do. It requires clarity, focus and a clear strategy.”

FRANCHISEE FOCUS

Commenting on the negativity surrounding the religious connections, Zivkovich says the brand has carried the baggage for a while and there is probably a group of customers that will not return because of the association.

Building a strategy has taken time, but the plan is beginning to take shape and the interpretation of all the research and market knowledge will become reality in trials that will run for three to four months.

“We will take the opportunity to say we are under new ownership, and RFG has an inclusive and accepting outlook in the community. Part of reviving the brand will be partnering and working with relevant bodies.

Franchisees are looking for innovation, and that’s being delivered.

They are also getting a training platform with business coaches to help them develop their individual businesses, and a more frequently

There are more than 500 outlets overseas, and more than 300 in Australia. Domestic growth will be across several channels, with Zivkovich promising significant expansion across Australia, including regional areas.

He sees a clear path for high-performing franchisees, moving them into mentoring other franchisees, opening further outlets and becoming brand ambassadors.

“This is a well-recognised brand and we will gain back its market share. I’d like it to be a franchise of choice, getting respect, and with a strong and happy network of franchisees.

“I’d like to get it back to the glory days of 500 stores,” he says. 

JAN / FEB 2017 | 34 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

ALL GUNS

BLAZING I

nside Franchise Business catches up with the male grooming brand taking Australia by storm, Tommy Gun’s Original Barbershop, speaking to Sam Jarred, managing director.

WHAT IS THE BRAND’S BACKGROUND? Originating in Canada in 2009, Tommy Gun’s was developed to cater to a growing yet relatively untapped market of male grooming.

After the incredible response in Canada, the

franchise was introduced to the Australian market in June 2015. Now it has 50 locations in Canada and 12 throughout Australia.

WHAT IS YOUR BRAND VALUE PROPOSITION? Our mission is to make a hero of personal style.

Each day we help to carve the personal style of hundreds of customers. When our customers leave feeling and looking sharp, our mission is accomplished.

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TOMMY GUN’S DNA • People person – positive, motivating and respectful, with the desire to always exceed expectations. You need to love working with people and inspiring a team.

• Passion for the product – a firm believer in the power of personal style and presentation with a love of service and grooming.

• Confident multitasker – the ability to stay calm under pressure.

• Ambitious leader – a desire to succeed, to smash KPIs and be a leader and motivator who can empower, develop and retain staff.

• Financial acumen – financial intelligence and aptitude to reconcile and grow the figures.

• Desirable skills – previous management and sales experience, particularly working with and developing a team.

HOW DO THE BARBERSHOP/RETAIL ELEMENTS OF THE BUSINESS WORK? The barbershop and our signature services are central to the business model, and represent about 80 per cent of our floorspace and revenue.

What further sets us apart is the complementary and comprehensive retail offering, including haircare, styling, shave, electrical, skincare products and more. These two aspects have never previously been combined effectively under the one roof.

WHAT ARE YOUR EXPANSION PLANS? In Australia, 12 Original Barbershops opened within the first 16 months.

We always like to ensure we have the right franchisee and the right location before opening a store. We hope to have 20 stores by the end of this year.

The concept has given retail centres a new offering, business owners a great opportunity and, ultimately, it’s given blokes the destination for all their grooming needs.

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WHAT IS DIFFERENT ABOUT YOUR FRANCHISE MODEL? Tommy Gun’s store designs and finishes are what set us apart. Ours is an environment that fuses long-lost barbershop character with millennial tech, ensuring convenience and comfort for our customers. An environment to relax in, with digital self check-in, a beverage on the house and in-mirror TVs; it’s comfortable, convenient and cutting edge grooming experience at its best.

From the receptionist through to the barbers, service is pivotal to Tommy Gun’s success. It’s the top shelf service from start to finish that builds our loyal customers and advocates. Our barber services are unparalleled, with custom cuts, cut throat shaves and emerging tattoo and track work to name a few.

All of our barbers are up-skilled to ensure our customers’ personal style is highlighted each and every visit.

Each Tommy Gun’s location offers a comprehensive selection of new and innovative men’s grooming products.

Each key category is covered including:

• Hair care • Skin care • Hair growth • Shave and beard care • Clippers • Trimmers • Straight razors • Shave brushes • Gifting Sourcing brands from across the globe, many exclusive to Tommy Gun’s, we retain our position at the forefront in men’s grooming. With custom retail fixtures and ensuring products shine on the shelf, Tommy Gun’s is the ultimate go-to for men.

HOW DO FRANCHISEES EARN PROFIT? While the initial training and setup provides franchisees with a turnkey concept, ongoing profitability is driven primarily through effective management of labour costs relative to sales. We work closely with our franchisees to monitor and develop this area of the business, and provide sophisticated business-management tools. Our support team works

closely with each franchisee and store manager to ensure standards are maintained.

IS MULTI-UNIT FRANCHISING ENCOURAGED? Yes. We have several multi-unit franchisees in both Australia and Canada. However, this always depends on the skillset of the franchisee. They need to demonstrate a clear ability to multi-task, delegate and motivate.

HOW DO TERRITORIES WORK? We do not prescribe territories to franchisees. However, it is not in our best interest or that of the franchisee to open any locations that would negatively impact an existing site.

WHO MAKES AN IDEAL FRANCHISE? A Tommy Gun’s business owner needs to be passionate and driven. Our owners are pivotal to our success, with Tommy Gun’s DNA as key. 

OWN A PIECE OF FRANCE Michel’s Patisserie has grown to become Australia’s largest patisserie chain with over 200 locations.

Renowned for delicious specialty cakes, pastries, treats, savouries and award-winning coffee, Michel’s Patisserie has been awarded ‘Coffee Shop of the Year’ for four consecutive years, as voted by consumers through Roy Morgan.

Most recently, Michel’s Patisserie evolved further to include a larger Café model, complete with an extended menu, including breakfast and light meals.

LIMITED NEW STORES AVAILABLE ACROSS AUSTRALIA ENQUIRE NOW TO RECEIVE AN INFORMATION PACK For more information FREE CALL 1800 067 619

Visit us at www.michels.com.au 14/10/2016 3:01 PM

JAN / FEB 2017 | 39 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

A WINNING HEART Bakers Delight multi-unit franchisee Ryan Kirkham proves there is more to business than just dough.

hile a franchise may be all about revenue, profits and return on investment, there can be a giving element as well.

You just have to try and do what you can. Nothing worthwhile is easy.

In fact, giving back to the community has won recognition for a regional New South Wales franchisee, Ryan Kirkham, a Bakers Delight multi-unit franchisee. He has taken the Franchisee Community Responsibility and Contribution Award at the latest Franchise Council of Australia Excellence in Franchising awards.

“We get phone calls for donations every day,” he says. However, he chooses charities based on what they can do for the community, and also those that help children.

W

Kirkham has always worked in the bakery sector. Before becoming a franchisee in 2009, he completed his apprenticeship at the Tweed Heads store where he became production manager while completing his franchise training. But it was his charitable generosity that steered him to glory at the franchising sector’s night of nights.

Kirkham’s involvement in charitable activities has included donating to the Hear and Say Foundation, sponsoring the Rip City basketball team, supporting Wishlist and making weekly bread donations to Life Church to help homeless and struggling people in the community.

“It’s about partnering with groups engaged with the community that keep us involved and up-to-date with what they’re doing,” he says. “I quite enjoy being involved with them.”

MATTER OF TIMING

Apart from the personally rewarding effects of giving back to the community, he says charity involvement can be beneficial exposure for a business. Not only does it help inform the community of a franchisee’s role in supporting community initiatives, but can also help develop a customer base from referrals.

Kirkham says he has made good friendships through helping charities, and has even made business connections (he buys from a wholesaler who works for a common charity).

How can a franchisee give back to the community while building a business?

Whether he donates, sponsors or provides food to these charities, the organisations work with the busy multi-unit franchisee by synchronising their programs with his downtime periods within the business.

Kirkham says that though the Bakers Delight network sets a great example for charity work in its culture, he advises potential buyers to get on their feet before lending a hand to the community. This allows franchisees to know what kind of support their business can provide.

So what benefits does Kirkham see for franchisees in contributing to their community?

“You need to know if you can afford it,” he says. “You just have to try and do what you can. Nothing worthwhile is easy.” 

JAN / FEB 2017 | 40 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

FIT FOR THE

GODS

I

nside Franchise Business speaks with Costa Anastasiadis, who was part of the team behind the Crust success and is now GM of the modern Greek food restaurant Zeus Street Greek.

to working closely with franchise partners.

Zeus provides setup and ongoing support for franchisees, from site selection to fitout, recruitment, training and development, marketing – everything needed to deliver the Zeus experience.

WHAT ARE YOUR EXPANSION PLANS?

IS THE MULTI-UNIT FRANCHISING ENCOURAGED?

It’s a very exciting time for us at Zeus. We’re eagerly anticipating strong growth with franchise business partners over the next 12 to 18 months. We’re looking to take our distinctive brand of Greek street food to new territories and further embed the brand in existing markets. We will open between 10 and 12 stores next year starting in Canberra, followed by Surry Hills in New South Wales, as well as sites in Perth and Queensland. It’s a really exciting time for the brand.

Multi-unit franchising is encouraged, and is a great way to boost growth for both the franchisee and franchisor. The traditional challenges for any multi-unit franchisee can often arise from within their own internal infrastructure – anything from access to key personnel, funding of stores and overall compliance.

WHAT IS DIFFERENT ABOUT YOUR FRANCHISE MODEL? The Zeus Street Greek team has proven franchising experience and is committed

HOW DO YOU FIND LOCATIONS? Territories are determined by certain key metrics that are crucial for the success of our two models – fresh casual and express. For example, foot traffic, population density along with socioeconomic influences within areas are all

factors that are analysed to determine whether a Zeus can be successful in a given area.

WHO MAKES AN IDEAL FRANCHISEE? There is no one size fits all, but it’s really important that all of our franchise partners share in our vision, embody our philosophies and are keen to continue to grow the brand with us. The appeal of our model coupled with the maturity of our systems and operating efficiencies has meant franchisees are being recruited from a variety of backgrounds, from seasoned retail professionals all the way through to partners who are new to franchising.

WHAT LEVEL OF SUPPORT IS INCLUDED? The Zeus model supports franchisees across all key aspects, and at all stages. We have a dedicated franchise support team that works collaboratively with business and product development, finance, IT and marketing to ensure our franchise network is given the support needed and is set up for success. 

JAN / FEB 2017 | 44 | WWW.FRANCHISEBUSINESS.COM.AU

QUICK NUMBERS Capital investment needed: Set-up costs vary depending on the size and infrastructure of the premises, as well as the business model –fresh casual or express.

Franchise fee: $60,000, includes three programs – training, support and finance.

Additional setup costs: Project management fee, $15,000; opening stock and marketing, $60,000

It’s really important that all of our franchise partners share in our vision, embody our philosophies and are keen to continue to grow the brand with us.

JAN / FEB 2017 | 45 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

SHARING THE RISK Franchise buyers averse to risk are offered an unusual partnership model that gives them the security of a regular salary.

A

n unusual partnership model in which franchisees are paid a salary is offered by awardwinning Laser Clinics Australia.

The company provides a suite of laser-based aesthetics services and skincare treatments in shopping centres, and offers franchisees a distinct partnership model. But it also partners with the franchisees – each invests on a 50/50 basis, with franchisees being paid a fixed salary to give them a level of comfort, according to GM Tim Sinclair.

This shared-risk model is consistent, and stakeholders need to understand its power.

“We invest together and share the risks,” says Sinclair. “We may butt heads, but the franchisees know the reasons for decisions: if they don’t make money, we don’t make money and shareholders won’t get the returns they want.”

Partnership defines the business, and Sinclair says a five-year term with a five-year option gives people a sense of security, and it is easier to sell on the business when a tenure is in place.

“I expect a chunk of franchisees to see out their two terms. They do feel a true sense of ownership.”

Sinclair says an advantage is that the business can become cash positive very quickly.

“Customers are prepaying for series of four, six or eight treatments, so franchisees by and large don’t have the same cashflow worries as in some other businesses.”

LOAN REPAYMENTS This also helps franchisees pay back their loans. “We let franchisees distribute cash to pay down their loans. We talk to franchisees about a two- to three-year payback. That’s attractive for both franchisees and banks.

“At head office we have a vision about our clinics providing the best service and products, but we also have a vision for franchisees. They want to work hard but want something that will give them financial and lifestyle security.

“Our vision is to build a franchise model that provides financial security and opportunity for franchisees. This business will generate

Our vision is to build a franchise model that provides financial security and opportunity for franchisees.

income they couldn’t earn in a corporate life, and allow them to pay off their loans.”

While the model depends on the owner being present in the business, Laser Clinics supports some successful franchisees in taking on a second clinic.

The best franchisee is always looking for ways to improve, Sinclair says. “We give franchisees visibility across the network when it comes to sales performance and other KPIs - client return rates, multiple services.”

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It is common for a franchise structure to include business development or area managers who directly support individual franchisees, but this is not the case with Laser Clinics Australia. Instead, franchisees have direct contact with Sinclair and with the head office with its category teams.

but Laser Clinics has been taking a slow and steady approach. The business is eyeing the US and European markets and notes that nobody has the exact same franchise model.

Geared to shopping centres, Laser Clinics is viewed as an attractive proposition by landlords, says Sinclair.

Franchisees are responsible for the results of their share of the business while the category leaders take care of the vertical profit and loss, says Sinclair. “It’s better to create centres of excellence.”

“Our demographics are exactly what they want. People will come in for a treatment, and it might be only five minutes. So then they are going to shop.”

He says the system works because the clinics have more in common with each other when they share a tenure and maturity of business.

CHALLENGES “When the business started in 2008 there was very little competition. Now we have three or four very good competitors for whom I have a lot of respect,” says Sinclair.

“The challenge is how many can succeed?

“There is room for growth for everyone right now, but if you want to run a good, profitable business you need sensible growth.”

International growth is part of the big plan,

Training for both franchisees and therapists is critical to the business.

Sinclair believes it is an advantage of the owner-operator model that the franchisee is working full-time in the business so can spot and handle any staffing issues early.

Experienced franchisees are actively encouraged to share their knowledge with others. A franchisee speaking to peers is seen to be much more credible than if the franchisor shares the same information, says Sinclair.

“They don’t have to share, but they care enough about their fellow franchisees and care about the brand. I’ll always be indebted to these people,” he says. 

JAN / FEB 2017 | 47 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

YOUNG GUNS GRAB THE BATON

Brothers follow in parents’ footsteps by becoming franchisees in coffee chain.

T

wo brothers have followed in their parents’ footsteps by becoming franchisees, setting the foundation for thier own success.

Brothers Dillon and Samuel Zavos are opening the latest Zarraffa’s Coffee drivethrough at Oxenford on the Gold Coast.

They are among a select number of secondgeneration store owners for the Australianowned specialty-coffee chain - a trend that is cause for celebration, says founder and CEO Kenton Campbell.

“I started this business 20 years ago as a way to support my family,” he says. “What has been happening, somewhat under the radar, is increasingly the families of our franchisees have become involved in our stores, and now the next generation is sharing the reins with their parents and forging their own journey with Zarraffa’s.”

I’ve often said that not only are we a family business, but a business of families.

Dillon and Samuel’s parents, Bill and Claire, own both the Hope Island and Runaway Bay stores. Samuel and Dillon have been managing each store respectively until the Oxenford opening.

Bill Zavos says it was an extremely proud moment to be able to “open shop” not only in a thriving part of the Gold Coast, but with both his sons as franchisees side-by-side.

“Logistically I will be taking on an area manager role, overseeing all three of our stores, with Dillon managing the new Oxenford drivethrough and Samuel looking after the other two stores.

PASSION FOR BRAND “We are passionate about this brand, our customers and the coffee, and over the years I think we have instilled in our boys a similar outlook.

The business has provided them with the means to carve out business careers as owners.”

Campbell says it is highly rewarding to have built a franchise company that provides the means for so many livelihoods and careers.

“I’ve often said that not only are we a family business, but a business of families.

I am very gratified by that fact.

“And while we need and want new blood in the system, we care about creating a business journey that is sustainable, profitable and has growth potential.” 

JAN / FEB 2017 | 48 | WWW.FRANCHISEBUSINESS.COM.AU

Brighten your future “I’m glad I’ve made the decision... Being my own boss is the way I want to go.”

– Franchisee, Begin Bright Bella Vista

Looking for a successful investment opportunity? Become a Begin Bright franchisee and own a business you can be proud of.

Begin Bright is an award winning school readiness and primary tutoring franchise, with a mission to enrich the lives of children through the power of learning.

With over 30 centres across the country, and extensive expansion plans for 2017, we are on the look out for talented and driven individuals to join our network of successful franchisees.

You don’t have to have a background in education to be a franchisee, you simply need a drive to succeed, and we’ll help you with the rest.

You’re invited! We’re holding free franchise information evenings in locations near you: Sydney: 13th February Perth: 14th February Melbourne: 15th February Gold Coast: 9th February

E franchise@beginbright.com.au W www.beginbright.com.au/franchising/ P 1300 234 462

® www.beginbright.com.au

LEADERSHIP

FIVE MINUTES

WITH OPORTO’S

SEAN O’ CONNOR Fast food franchise manager Sean O’Connor takes our Q&A WHAT IS YOUR PERSONAL STRENGTH IN BUSINESS? Setting and achieving goals. This was one on the very first lessons I received in business many years ago. Set your goals for a given timeframe. Write a business/action plan on how to achieve those goals and take action.

Have regular assess and measure sessions.

Readjust your business plan accordingly. Work hard and you will see great results.

WHAT HAVE YOU LEARNED ABOUT FRANCHISING? That success is based on franchisor and franchisee working as a team to achieve brand vision and goals.

WHAT DOES IT TAKE TO HAVE AN EFFICIENT FRANCHISE MODEL? Firstly an efficient model needs to have a robust five to 10 year plan; and strong leadership team and an engaged franchise network.

Secondly and just as important an efficient franchise model needs systems, procedures and an expert support network... this includes, but limited to; • A comprehensive training plan with access to ongoing training for all employees; • An efficient and effective supplier network; • Operational systems and procedures; • Access to online portals for ordering of uniforms, marketing products and communication; • Access to free independent employer relations advice; • A real time Point of Sale system that provides instantaneous results across the network; • An expert property team; • An inspired and highly effective operations team;

• and a great franchise recruitment system ensuring more quality performers are joining the brand.

WHAT DO FRANCHISEES WANT FROM THEIR FRANCHISOR SUPPORT TEAM? They want expert advice, support and guidance to ensure their businesses are running at maximum profitability. They also want a strong, passionate and profit focused leadership team.

HOW DOES A FRANCHISOR FOSTER TRUST IN THE RELATIONSHIP WITH A FRANCHISEE? Firstly, the franchisor’s goals, vision and action need to result in positive growth. Then, open and honest conversations are the surest way to build the foundations of trust between the franchisor and franchisee. Rewards and recognition are very important for a job well done and sharing knowledge on how to improve performance are just a few of the ways to foster a healthy and respectful relationship.

WHAT CAN FRANCHISEES DO TO ENSURE A GOOD RELATIONSHIP WITH THE FRANCHISOR TEAM?

but first and foremost it’s passion, passion for the brand and passion to succeed. Mix passion with understanding business insights, a commitment to succeed and dose of hard work and you have a future Oporto star in the making.

WHAT DO YOU THINK IS THE MOST IMPORTANT QUALITY REQUIRED OF A FRANCHISEE? People Skills. Absolutely categorically, people skills. Through our ongoing training programs we can assist franchisees with improving all other business aspects, but we can’t teach them people skills. People skills is closely followed by dedication to succeed and hard work.

WHAT DOES IT TAKE FOR A FRANCHISEE TO BE A STAR PERFORMER? The star performers in the Oporto franchise network are customer centric business minded people with a passion for the brand and a passion to serve amazing food. They are an inspiration to their team as well as the broader Oporto network. 

Maintain brand integrity, be constructive in feedback, be open to change, be a part of the broader team of franchisees and have the best interests of the brand in every action they make.

WHAT IS THE MOST COMMON MISTAKE FRANCHISEES MAKE? Recruitment and retention.

WHAT DO YOU LOOK FOR IN AN INTERVIEW WITH A PROSPECTIVE FRANCHISEE? A proven track record in business is important,

JAN / FEB 2017 | 50 | WWW.FRANCHISEBUSINESS.COM.AU

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INDUSTRY SPOTLIGHT

MORE THAN A

BUN FIGHT If you've got a taste for change then you could take a bite out of the $6.9 billion burger industry

JAN / FEB 2017 | 52 | WWW.FRANCHISEBUSINESS.COM.AU

A

ustralia’s burger industry is growing at a similar pace to the overall economy, according to a September report from business intelligence company IbisWorld.

For the decade to 2021-22, the industry is expected to deliver value to the economy at a 2.6 per cent compound annual rate, matching the annualised GDP growth, says the Fast Food Burger Shops in Australia report.

New entrants in the market are capitalising on customer preference for premium products, says the report, which is good news for employees in the sector but a challenge for established players.

Today’s outlets might cater to a niche or meet all-day demand. So what are they selling?

BURGERS While the meat patties still represent a significant proportion of industry revenue, they are in decline as today’s burger’s can feature beef, chicken, lamb or even vegetables.

BREAKFAST Giants such as McDonald’s and Hungry

Jacks introduced pancakes, hash browns, breakfast wraps and burgers to capture a nascent demand for breakfast on the go.

Now hungry consumers are just as likely to head to a local cafe or coffee shop for a broader – and healthier – breakfast menu.

SIDES Yes, customers do want fries with their burger, or perhaps onion rings or salad. Side orders are low revenue-earners, but are steady sellers.

DRINKS Coffee – even alcohol in casual-dining restaurants – is now offered alongside traditional soft drinks and milkshakes in burger outlets. Greater choice equates to a greater income for franchisees.

OTHER ITEMS Increasing revenue from items such as wraps, salads and desserts reflects the diversification of menus to suit changing tastes.

WHAT DRIVES CONSUMERS? • Convenience • Discretionary income • Health consciousness

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• Price • Alternatives Time-constrained consumers always appreciate a quick meal, but increasingly they are searching for the healthier options - and burger outlets are often viewed as unhealthy, according to the report.

“The trend toward premium products and healthier food options is expected to continue rising for quite some time, particularly as consumers become more health-conscious and demand more upmarket, high-quality products,” says IbisWorld senior industry analyst Nick Tarrant.

“Low entry barriers and generally stable profitability have incentivised many smaller, niche operators to establish themselves over the past five years, such as food vans or outlets that offer fresh, local and premium ingredients as a point-of-difference over the major chains.

“As younger consumers become more and more health-conscious, the demand for premium and healthier options is likely to continue growing into the foreseeable future.”

WHO IS EATING BURGERS?

HOW DO FRANCHISES MANAGE COSTS?

Almost half the revenue in the burger market comes from consumers 34 years and younger, according to the IbisWorld report. Teens, students and budding career professionals are a major market, with their limited incomes leading them to seek value for money, plus they are not particularly health-conscious.

Most establishments in the burger business are franchises. The rest are either locally owned burger shops or smaller chains.

Customers between 25 and 34 years, who have heightened health awareness and higher income levels, support premium outlets.

As well as smaller portion sizes, there is a focus on reducing waste to minimise costs, says the report. The larger companies contract directly with manufacturers to sidestep wholesale mark-ups.

Fast-food meal options appeal to the older customers, most often families with young children, but increasing health-consciousness accounts for this demographic’s declining share of revenue.

Older consumers prefer eating out in restaurants or dining at home.

McDonald’s and Hungry Jack’s dominate the market, but increased diversification is likely to constrain their revenue. IbisWorld says the industry’s cost structure largely reflects how the two majors work.

Profitability has been moderate in the sector, and consumers have been happy to pay for premium products, according to the report.

The fast-food sector is highly labourintensive, and the introduction of casual contracts lets franchisees manage staffing levels and lower wage costs. Rental

payments are still a major cost, especially as stores need to be prominently located in high traffic areas.

Franchisees contribute marketing fees to help fund the significant costs of advertising, a mainstay of big burger brands. Fees are typically 4 or 5 per cent of revenue.

WHO IS WHO? McDonald’s Australia holds 62.3 per cent of the market.

Competitive Foods Australia, which runs the Hungry Jack’s brand through a master franchise agreement with Burger King Corporation, has just 17.3 per cent market share.

Premium player Grill’d, which has companyowned and franchised outlets, has snared 4 per cent of the burger business, while Burger Edge attracts less than 1 per cent market share with its 25 stores.

JAN / FEB 2017 | 54 | WWW.FRANCHISEBUSINESS.COM.AU

Finding a business that offers financial security with a family-friendly lifestyle might be easier than you think. I built the most successful SafetyQuip business. Call me and I’ll tell you how.

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Specialists in the supply of workplace health and safety products.

Check us out at www.safetyquip.com.au.

JAN / FEB 2017 | 55 | WWW.FRANCHISEBUSINESS.COM.AU

A BIGGER BITE Hungry Jack’s chief marketing officer Scott Baird believes its customer base and their preferences have changed significantly over the years.

“Hungry Jack’s continues to reinvent itself and strive to be better as customers demand greater choices and greater transparency,” he says. “Our commitment to ‘better’ has seen major changes to our menu offering over the past year to respond to the evolving preferences of Australians.

“Changes include an industry first with the introduction of cage-free eggs, eliminating added hormones from our 100 per cent Aussie beef burgers, the new Grill Masters gourmet burger range, switching from traditional fries to Thick Cut Chips, new 100 per cent Arabica coffee and improved chicken nuggets,” says Baird.

About 15 per cent of Hungry Jack’s restaurants are owned and run by independent franchisees. Many are family-owned and have been in the business for decades.

Hungry Jack’s first restaurant opened in the Perth suburb in Innaloo in 1971. Forty-five years later the brand has more than 400 restaurants across Australia.

WHAT ABOUT CHICKEN? Chicken is often perceived as a healthier burger option. However, the IbisWorld report does not include chicken burgers as they are covered in a separate segment, chicken-based fast food.

HOW DOES THE FRANCHISE BALANCE THE NEED FOR INNOVATION WITH THE COSTS TO FRANCHISEES?

Vanessa Rowe, head of marketing at Oporto, explains how the fresh-grilled chicken restaurant brand is making its mark...

Food is the one of the most dynamic markets, and if you don’t innovate you die. Innovation to meet a consumer need is how we focus our attention, and balance the franchisee need with costs. If it is a genuine opportunity, discovered through a real consumer insight, it will deliver results.

HOW IMPORTANT IS THE MIX OF TRADITIONAL ITEMS AND HEALTHIER CHOICES ON THE MENU?

HOW DOES OPORTO COMPETE AGAINST OTHER FAST-FOOD BRANDS AND INDEPENDENT OUTLETS?

Traditional items and healthier choices are one and the same for Oporto. Our flamegrilled Portuguese chicken and our Bondi burger are made from chicken that is fresh, not frozen, and is grilled, not fried. We have always focussed on ensuring our food delivers flavour from real, fresh ingredients.

I’m not going to give away our plan for success, but will say we are the underdog in this industry. We are not the largest player and don’t have the deepest pockets, so we have to do things differently. Sometimes this means taking a risk, but we manage this by making sure we take informed and calculated risks.

ARE THERE PLANS TO INNOVATE IN THE PREMIUM SECTOR? This is an important area of growth for the brand. Customers have already told us that they already view our brand as more premium than other QSR players. We intend to continue to build on this base and stretch the brand further into this space.

WHICH REGIONS IS THE COMPANY TARGETING FOR GROWTH? Given our size there is still significant room to grow in all markets in Australia and New Zealand, but we also have a lot of interest from offshore so this offers a huge expansion opportunity.

BECOME A QUEST FRANCHISEE A PROVEN AND SUCCESSFUL BUSINESS FORMULA As Australasia’s largest apartment hotel operator, Quest is a brand business travellers have come to rely on for more than 25 years.

We’ve created a business format franchise model that takes away some of the challenges to achieving success in small business, with the support of one of Australia’s most recognisable brands.

Visit questfranchise.com.au or call 1800 809 913

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WHAT ARE THE PREFERRED MODELS IN NEW AREAS? We have developed a range of models that work for different areas. In some areas where space is difficult, our new Pequeno stores work perfectly, while in other areas our drive-throughs are still critical. We are also testing a range of new store formats.

WHAT DOES A TYPICAL FRANCHISEE LOOK LIKE TODAY? I don’t know what a ‘typical’ franchisee looks like, but we look for people who have the perfect balance of business acumen and customer-centricity. They need to be passionate for our brand, be authentic, ambitious and dynamic.

HOW DOES A FRANCHISEE ENSURE THEY STAY PROFITABLE? Franchisees within our business who have stayed profitable over the long term all have one thing in common: they are customer focussed. They are people who work “in” the business rather than “on” the business. They genuinely care about the brand and their customers, and are committed to serving fantastic food. It might sound cliche, but it makes all the difference.

BURGERS ON DEMAND Larger chains do not generally offer delivery.

As established businesses they rely instead on their strong brand to drive in-store sales.

It is a different story for smaller, local outlets however. IbisWorld's Tarrant says these typically benefit more from using different delivery options, either online services like Deliveroo or Menulog, or by taking traditional phone orders.

“Businesses that target younger consumers can benefit the most from having a multi-channel presence, as a mobile or online ordering service can make them more accessible for these users,” he says. “Firms that offer delivery but don’t have an online presence are likely to put themselves at a disadvantage to local competitors, as they may deter consumers from trying their products.”

Deliveroo country manager Levi Aron says, “We live in an on-demand world – we press a button, swipe a finger and we are instantly connected. We can order the latest fashion from around the world, so why can’t we order the newest gourmet burger that just hit town and have it delivered to our home or office? That is no longer a question now - the technology, transparency and tracking that goes behind delivering that burger is absolutely incredible.”

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FAST FACTS Revenue $6.9 billion Annual growth 3.5 per cent (2012-17) Annual growth 1.4 per cent (2017-22) Profit $518.1 million Wages $1.3 billion Businesses 5899 Regulations

There is a low level of regulation.

Trading-hour restrictions vary between states and territories.

Decreasing regulation allows for 24-hour trading.

Appropriate food-safety standards need to be met (Food Standards Australia New Zealand).

MAKING IT WORK

THE CHALLENGES

Healthy food

International cuisine

Dine-in outlets

Increased operational efficiency = portion sizes + minimise waste Rising wage costs = casual employment Innovative menus = healthy + premium Social-media friendly = food + environment

SIGNS OF SUCCESS

Food vans

Indie operators

Cafes and coffee shops

The median age of the population is rising

Dropping consumer sentiment index

Declining average weekly working hours

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• Menu adaptation to reflect food trends • A franchise structure that offers economies of scale, brand awareness and marketing • Stock control to manage quality and waste • Cost controls and improved efficiencies • High-volume traffic locations to benefit from impulse purchases. 

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INDUSTRY SPOTLIGHT

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H S E R F LENGES L A H C

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Continued from p61

FRESHII Brand snapshot: A Canadian health-food favourite, Freshii has been fast-tracked to Australia and headed up by master franchisee Robbie Damjanovic. Freshii first franchised in Canada in 2005, and over the past 11 years has expanded to 20 countries with 300 locations.

The model: Freshii positions itself as the fast fashion of healthy food, following the Zara model. Just as Zara brings the latest runway trends to shoppers, Freshii presents food trends, such as smoothies and breakfast bowls, to its customers around the world at an affordable price point. The cost of a franchise is $280,000 to $350,000 for a turnkey model, depending on the site size. The cost of access to its Freshii University is included, as well as training and support for the grand opening.

Expansion plans: Freshii is opening more than 20 stores throughout Australia this year and next.

DIVANI Brand snapshot: Established in 1994, Divani is a women’s fashion retailer headed up by Helen and Con Tsimilas.

It specialises in clothing and accessories for “every woman” regardless of age or shape, and is offering franchises for the first time.

The model: Each Divani franchisee is granted an exclusive franchise territory.

The initial costs of an individual shop is $170,000 to $190,000, subject to store size, the standards required of the site and, in certain cases, a fit-out contribution from the landlord. This investment includes franchise fees, training, recruitment and legal fees, fit-out and stock. The franchisor will provide two to three weeks of training at its head office and stores in Sydney, and one week of intensive induction support. Franchisees benefit from the established Divani marketing program which includes digital, social media, shopping centre promotions and specialist magazine advertising.

BARBERVAN Brand snapshot: The BarberVan is a mobile business providing haircuts and beard grooming at customer-convenient locations. The van has reverse-cycle air-conditioning and an adjustable lay-back barber chair. Franchisor Ep Weatherhead has had more than 25 years’ industry experience in both the

UK and Australia, and runs a trial van in Sydney’s Eastern Suburbs.

The model: The BarberVan is a mobile franchise with an exclusive marketing territory. Franchisees receive all leads generated by the main website and other marketing programs, while doing their own local marketing. However, franchisees can take clients and client referrals anywhere outside the territory unless the area has been sold. The BarberVan franchise investment is $30,000 to $35,000, including training, marketing, intellectual property fees and operational support.

Expansion plans: Franchises are now available throughout Australia.

MAGGIE MOO MUSIC Brand snapshot: Maggie Moo Music is a children’s services franchise offering interactive music and movement sessions for children and their parents, carers or grandparents. Launched in the UK in 2012, it started franchising in 2014 and now has 160 franchises. The brand has just been brought to Australia by “head farmer” Carolyn Dufton, who formerly owned the Hire for Baby franchise.

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Find out more about why Just Cuts™ continue to be the largest hairdressing company in the Southern Hemisphere with the Just Cuts™ smart choice check list: • Your royalty is a transparent, fixed, flat fee, so your earning potential is never restricted • The average Franchise Owner goes on to own multiple salons. In fact, just over half are multi-salon Owners!

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2 IN

A master franchisee or “state farmer” has been hired in New South Wales.

The model: Franchisees receive earlylearning support, ongoing support from the state or head farmer, and operations and marketing help from the UK. The cost of a franchise starts at $6250 to $8750, depending on the size of a territory, for a three-year term. A further $1000 is required for legal support, starter kit and props.

Expansion plans: Maggie Moo Music has plans to recruit 100 “farmers” throughout Australia in the next two years.

PEAK PHYSIQUE HOT YOGA Brand snapshot: Established five years ago and franchising for 18 months, Peak Physique is a hot-yoga studio committed to offering affordable classes to Australians. The franchise offers a work life balance through its 23-hour working week, together with low risk.

The model: The initial investment is $70,000 and includes fit-out, help with lease negotiations and business training.

Franchisees receive mentoring and coaching, as well as access to Yoga Alliance Australia certified teacher training.

Expansion plans: The brand will be opening 20 studios throughout Australia, including regional areas.

12 ROUND Brand snapshot: Without fixed start times, 12 Round (12RND) is a fitness franchise that involves short, highintensity interval training programs. The brand opened a concept store in 2014 and started franchising in January this year.

The model: Workouts are based on 12-round boxing contests designed by professional athletes. The total initial investment in an outlet is less than $160,000, with 12RND providing ongoing training as well as reviews of marketing, operations and support.

Expansion plans: The two major goals for the group next year are to triple the size of the franchise network and expand into at least one new region (most franchises are in Queensland so far, with a couple in New South Wales).

DIACO’S GARDEN NURSERY Brand snapshot: Diaco’s Garden Nursery is a family business with humble beginnings

as vegetable market stalls in 1949. The first outlet opened in 2000, and there are now three family-owned locations in Victoria with Geelong’s first franchise opening this year.

The model: The establishment costs for a franchise start from $450,000, depending on the business format. There are two options: a bulk yard or a nursery. Ongoing fees include a 2 per cent marketing-fund contribution and 8 per cent royalty fees. Typically, the business model will provide a return in two and a half to three and a half years.

Expansion plans: An estimated 10 new locations are expected in Victoria in the next three to five years.

HUXTABURGER Brand snapshot: Huxtaburger, an American-style burger chain, was founded in 2011 by foodies Daniel Wilson, Dante Ruaine and Jeff Wong. It now has five locations around Melbourne with the menu boasting burgers, American-style sides and beverages such as milkshakes and beer.

The model: Initial investment begins at $560,000 for a Melbourne CBD location.

This includes initial training, and help with

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site and lease negotiation. Franchisees also have access to marketing and administration support. The franchise agreement is for five years with an option to renew.

Expansion plans: Three new locations are set to open in Melbourne in the next year.

LITTLE L Brand snapshot: Little L started as a family business in Sydney’s Bondi community in 2008 with the aim of making the best chicken burgers.

The model: To establish a Little L franchise, investment begins at $300,000 with a five-year agreement with an option to renew. The investment includes initial training, store design and help with site and lease negotiation. New franchisees will also receive marketing and administrative support. There is a 2 per cent marketing levy, and ann ongoing 7 per cent royalty fee.

Expansion plans: The business aims to increase its franchise locations in Sydney to five next year, with inner-city locations already in the pipeline.

NAKED FOODS Brand snapshot: Naked Foods is a retail health-food franchise offering organic food products in bulk. Naked Foods started as a market stall and now has six locations in less than six years.

The model: Establishing a Naked Foods franchise costs $200,000 to $250,000, depending on the size, layout and site location.

market is likely to be $35,000 to $45,000, and includes training, business coaching, and marketing and sales support, as well as unlimited HR, employment law and business advice.

Expansion plans: Just launched in Australia, the group hopes to recruit between five and 10 franchisees in its first 12 months.

MASSAGE ENVY

HR DEPT

Brand snapshot: New to Australia, Massage Envy has been in the US since 2002, where it has 1155 clinics. Its aim is to make therapeutic massage mainstream through an affordable price at convenient hours in a professional environment.

Brand snapshot: HR Dept offers practical HR and employment services for the SME community. It was set up in the UK by Sue Tumelty in 2002, and after franchising in 2005 had 13 franchisees within a year.

There are now 63 franchisees in the UK and Ireland, running 85 territories, and the brand has just landed in Australia.

The model: Depending on the site, the initial investment ranges from $350,000 to $940,000. There is a 7 per cent royalty fee. The brand offers help with site selection and support for massage therapist recruitment. There is also online training and hands-on help with all aspects of running a clinic.

The model: Rather than act as consultants, franchisees work as an SME’s entire HR department, providing everything an in-house HR team would in a large business.

The initial investment for the Australian

Expansion plans: The goal is to open six new clinics by June next year, and reach 150 within the next five years, predominantly in metro locations in Brisbane, Melbourne and Sydney. 

Expansion plans: Naked Foods plans to open five locations over the next 18 months, taking the network to 12 stores.

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JAN / FEB 2017 | 67 | WWW.FRANCHISEBUSINESS.COM.AU

INDUSTRY SPOTLIGHT

NO PLACE LIKE

HOME Franchise systems that enable work from home have been a champion for those looking for flexibility, parents balancing work and family, and those seeking a change from corporate life, writes Noha Shaheed.

IS THE OFFICE DEAD?

E

mployers and employees are fully aware of the benefits of working at home, according to a Telstra Work Life Index study.

The key findings of the study include: • Better business: 55 per cent of companies have reported lower overhead costs by letting their employees work at home • Nine-to-five is dead: 67 per cent of participants embrace flexible hours when working at home to fit around other commitments like shopping, housework and childcare “connected” with an entity that is a small business for that income year • Happier, healthier habits: 63 per cent of employees agree they feel relaxed when working at home compared to 36 per cent in the office

• Work-life better: Australian employers who let staff work at home do so to promote better work-life balance (67 per cent) and allow work-time flexibility (66 per cent).

Telstra’s study was based on research by Nielsen in September, in which it canvassed 1810 Australian employees and employers 18 years and older.

So which franchises let buyers work from home?

SMARTLINE Smartline Personal Mortgage Brokers specialises in mortgage-broking services and allows flexibility and work-life balance for franchisees.

National franchise recruitment manager Matt Fitzpatrick says that about 80 per cent of franchisees start their business at home.

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The old cliché of nine-to-five is now just optional – our business model lets franchisees choose their own hours.

“For most of our mortgage brokers, that’s how they start their business,” he says.

“We’re not a franchise that forces buyers to take a shopfront.”

When starting out, franchisees are preparing, building a database, gaining prospects, researching, networking and forming partnerships. Costs include mobile phone, petrol and professional indemnity insurance.

The first two years are tough. “You’re not buying a lifestyle day-one type of business,” says Fitzpatrick.

Franchisees need to use the early years of the business to put systems and processes in place.

However, a Smartline franchise “really juggles around your life” says Fitzpatrick. “It’s fantastic for people trying to reconnect with kids, especially dads who spend a lot of their career in the corporate life.”

The initial investment of a franchise is up to $20,000, which includes induction and intensive initial support from the franchisor.

A business coach is provided for the first six months, and for those new to the business, a mentor is provided for two years.

SHOEBOX BOOKKEEPING Offering bookkeeping opportunities, preferably for experienced professionals, Shoebox Bookkeeping is designed to let franchisees work from home.

Franchisor Yvette Coad says features within the franchise model accommodate franchisees who want to fit a business around their lifestyle.

“One of the key features that makes our business home-based is that we use cloud

storage. This makes it easier than ever to work from home, and on the go,” she says.

“Another key feature available to our franchisees is their social-media pages, which we help run. These pages allow them to build relationships with their communities, and can easily be managed from home. ”As a result, says Coad, franchisees need only a car to visit clients, a mobile phone and a laptop or PC with internet access.

This means overhead costs are minimal as there are no leasing agreements or staff needed to start the business.

The initial investment is $29,990, which includes support and training, as well as ongoing royalties and a marketing levy during the life of the term - a 10-year agreement with an option to renew.

“Our model is built with flexibility in mind,” says Coad. “All our franchisees can work around their lifestyles, meaning that the old cliché of nine-to-five is now just optional - our business model lets franchisees choose their own hours.”

The model begins with a six-week marketing campaign to develop a client base. Franchisees also have two weeks of online training, one week of in-house training and four days onsite.

Six months of practical bookkeeping training to help franchisees become certified business activity statement (BAS) agents is also included with checkups. Franchisees are provided ongoing support throughout the term.

OUTSIDE CONCEPTS Specialising in outdoor home-improvement projects and services such as carports, pergolas, gazebos, verandas, decking and pool-and-spa enclosures, Outside Concepts

is headed up by Brian Rohan.

“The Outside Concepts system runs on a laptop computer, so franchisees can work from anywhere,” he says.

Apart from visiting clients, projects are usually subcontracted, although franchisees can do some installations themselves. This means they can work from home most of the time. As for costs, a laptop and printer are the main requirements.

“There are no fixed hours in this business, so it’s great if franchisees need to drop off or pick up kids from school,” says Rohan.

“Customers often like to organise their quotes after hours.”

New franchisees tend to keep their previous jobs until the business produces a regular income, which may result in the need to work after hours or at weekends until business picks up.

Each branch pays for its own advertising, amounting to $120 a month toward maintaining and promoting the group’s websites. The network contributes toward the answering service and 1300 numbers, which costs about $40 a month for each branch.

The initial cost for a franchise is $57,500, including training. There is also a package with a starting investment of $25,000 which comes with a slightly higher royalty until franchisees are ready to pay the rest of the franchise fee.

Training comprises a couple of weeks at the head office in Adelaide, then ongoing training (on-site and by email) that continues for as long as needed, usually six to 12 months. Ongoing support is provided by head office, and there is an annual conference in various locations designed to improve the business.

Many franchises are run by women at home who need to also pick up the kids from school.

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DIRECT APPLIANCE RENTALS Direct Appliance Rentals (DAR) is a furniture and household appliance rental business, with franchisees handling inquiries and orders. They also assess customer needs and ability to afford new rental contracts.

Franchisees also visit customers, order goods, arrange delivery and maintain customer relations.

“With a DAR franchise, your work hours are flexible. Many franchises are run by women at home who need to also pick up the kids from school,” says franchisor Karina Wolfin.

Franchisees work through an online software system via laptop or mobile phone.

TALKING TAX

S

MEs are a focus in the latest law change proposal, the Tax Laws Amendment (Small Business Restructure Rollover) Bill, as well as Budget changes. Both these moves are important for the potential franchisee.

Under the amendment, franchisees and other small businesses will be able to restructure their firms without

This allows them to keep track of payments and customers, do reports and track aspects of their business. There is no need for a shopfront or to hold stock, so the business can be run from a home office.

Typically, return on investment is two years, with maximum outlay around the 13th of each month based on a predetermined achievable and realistic forecast, says Wolfin. The second year largely involves recouping the initial investment.

Wolfin says this means franchisees will need some liquidity behind them so they have enough cashflow the first year. The overheads of a DAR franchise come from a product bought upfront then rented out to clients for 12, 24 or 36 months.

the obstacle of paying capital gains tax (a tax levied on profit from the sale of a property or an investment).

According to sister publication Inside Retail, to be eligible for the rollover each party to the transfer must be either: • a small business entity with $2 million or more in turnover for the income year of the transfer • an entity that has an “affiliate”,

The initial investment in a franchise is $45,000, with 50 per cent vendor finance available to approved applicants. The model includes product and marketing, general business operation and customer relationship support. Franchisees also receive split-tested emails to their database as part of the marketing process.

“And as we celebrate eight years of success in business, we are also giving new franchisees $3500 of added inclusions as a kickstart,” says Wolfin. “We are also waiving the $3000 training fee, as well as supporting the growth of our franchisees by including professional marketing emails twice a week to their database, worth $500, free of charge.” 

a small business entity, for that income year • “connected” with an entity that is a small business for that income year • a partner in a partnership that is a small business entity for that income year.

Tax changes made in the latest Budget mean: • New businesses can make immediate tax deductions for professional services such as

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legal and accounting advice instead of writing them off over five years • Tax deductions will flow to SMEs, and minimum wage earners will have more money in their pocket • A cut in the tax rate to 27.5 per cent for small businesses extends to firms with turnover of up to $10 million • Instant tax writeoffs for equipment purchases worth up to $20,000 are extended for another year.

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INDUSTRY SPOTLIGHT

BEYOND

THE BUBBLE

Bubble tea is not just an Asian trend, says Cha Time GM Carlos Antonius, who has ambitions for the chain to become brand leader in Australia.

A

few years ago Australians didn’t know about bubble tea, with many of us yet to still encounter the concept that developed in Taiwan in the 1980s.

Introduced to the Australian market through its core Asian demographic, it has yet to really hit the mainstream.

So what is bubble tea? There are typically two types: milk teas similar to smoothies, and fruit-flavoured teas, both served cold.

It is also known as pearl milk tea, boba milk tea and tapioca tea.

According to Wikipedia, the oldest-known bubble tea was a mixture of Taiwanese

black tea, tapioca pearls, condensed milk and syrup or honey. The first popular version was based on jasmine-infused green tea.

For a relatively small niche in the food and beverage sector, the market is very competitive, says Cha Time group GM Carlos Antonius, who has been with the brand just 15 months. Coming from franchise chains Gelatissimo and Nando’s, he acknowledges the difficulties of moving the Cha Time brand on to the next level.

“When I came on board, there were two key challenges - firstly, how to take what has been developed over six years and give it Western appeal but not make it westernised; secondly, change management.”

Antonius’ concern was to do things differently and find a distinct market.

“How do we flip this?” he says. “While bubble tea is a category, we want to own the space in iced tea. We’ve been in core Asian demographic areas, so for the shareholders it’s a leap of faith.”

$4 BILLION BUSINESS Perceived as a healthy option, the iced tea concept is a $4 billion global business, with Lipton the best-known brand. That has meant culling some products and simplifying the business model.

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With no royalty fees or baking required, it’s no surprise that we have been around for so long!

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When brands are in the same category they need a clear and concise proposition, and to ensure customer relevance.

Antonius has also introduced brand value, a refined mission statement and clear strategy. “It’s had an amazing impact,” he says.

Responding to the key trends of premium product, indulgence and customisation, the franchise has put marketing front and centre.

“When brands are in the same category they need a clear and concise proposition, and to ensure customer relevance. For me, the business model is profitable if it’s profitable for all shareholders. If franchisees are profitable, the system works.

“Be sure of the business model, and maintain quality and consistent operational standards. Franchisors need to develop and invest in their brand and grow market share sustainably. It’s about getting retail partners on board and location. It’s a range of things.”

Independent research has shown that price is important to the core audience of young adults, but they consider convenience first, then experience, then brand innovation.

“We want to be the brand leader in iced tea.

We can establish price premium, but have to deliver on that,” says Antonius. “There’s not much room for movement in a price level of $5.50.”

With 1100 units globally, 90 per cent of Cha Time’s products are sourced from Taiwan. Controlling costs at all levels means regular conversations with suppliers, says Antonius.

“It’s about sharing the spoils. We’re entitled to a margin, too.”

FRONTLINE CHANGES There have been changes to store layouts and processes to improve the experience for the customer. Previously staff members would take an order through point of sale, then turn their backs on customers to make the tea. In the redesigned stores, the service

staff now take an order and serve the tea, all the time facing the customer.

This helps drive engagement and show the quality of products and mix-ins, says Antonius.

There has been increased engagement since the launch in April.

Sales figures are up, too. There has been close to a 15 per cent increase in like-for-like sales so far this year.

“We are starting to hit great KPIs, but we’re a long way from where we need to be,” says Antonius.

Expect to see more innovations, perhaps herbs and fruit pieces, he says. The brand could also be playing with the mocktails trend. “Everything we do reflects the brand: fun, fresh and flavour.”

As people start to understand the category, the brand messages establish a brand voice and personality. “When we are new to the market, how do we get product in people’s hands? With every renovation and new site, we do a free iced-tea session.”

Do the consumers try other teas on the menu? “It’s too early to say,” says Antonius.

“When I look at the locations, the perception is that this brand is only for Asian consumers.

That’s not the case.”

By next year the business will have 70 outlets, with 12 stores renovated. Of 25 planned stores, 12 are already in commercial negotiations.

“We’re in centres for presence, and we’re taking bigger strip locations. In Footscray station in Melbourne there will be an 80 sqm franchised outlet open from November.”

In the Northern Territory, the Casuarina outlet has proved itself the highest performer in the network. Ten further locations this year have helped widen the brand exposure. 

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• • •

FRANCHISE BASICS

An introduction to

FRANCHISING Your 20-page guide to how it all works

T

his easy guide to franchising is a useful reference tool you can draw on time and again in your search for a franchise.

Inside Franchise Business delivers all the must-read information you need before you buy a franchise. Every issue of the magazine - issued six times a year - will include crucial information you can’t afford to miss if you are serious about making money from franchising.

IN THE NEXT ISSUE Franchise suitability: Are you right for franchising?

Why you should quit your job What to look for in a franchise Is your family ready?

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FRANCHISE BASICS

10 REASONS TO CHOOSE FRANCHISING Franchising is a winning business model, to the extent it can contribute $146 billion in sales revenue to the Australian economy.

W

ith its origins in the US in the early 20th century, franchising offers individuals the chance to invest in and build a business with minimised risk.

Of course there can never be any guarantee of success in business, either with a franchise or an independent start-up. But what franchising has in its favour is shared experience and impassioned practitioners.

In the franchise sector in Australia, significant brand equity is held by some of the biggest names on the high street, such as McDonald’s, Domino’s and

Subway. Established brands with trading history and a network of experienced franchisees can provide insights and advice that can help shortcut business development for new entrants. But franchising is not just about big names - some of today’s giants were yesterday’s newbies, so franchisees could well be in on the start of something big.

And franchising is not limited to the retail sector.

Think of the local dog-wash service, friendly lawnmowing business, the all-hours gym, financial services and mortgage broking, early learning or after-school tuition, car detailing… Think of a sector, and someone will be running a franchise business.

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Franchising accounts for about 4 per cent of all small businesses in Australia, according to Franchise Council of Australia executive chairman Bruce Billson.

Franchised businesses contribute $146 billion of sales revenue to the Australian economy - an increase of $2 billion over two years, as revealed by the Franchising Australia 2016 survey by The Asia Pacific Centre for Franchising Excellence.

More people are directly employed in business-format franchising in Australia as well, reaching 472,000 permanent, part-time and casual employees, up from 461,000 in 2014.

“The survey points to a maturing sector, holding its own in a transitioning economy following the end of the mining boom,” says Billson.

A real positive for the Australian franchising sector is its employment growth, which has been rising steadily since 2012. Significantly, the proportion of people employed full-time has increased.

“Total sales turnover for the sector has risen slightly, while employment has steadily risen and created more full-time jobs. Franchisors are also predicting growth in franchise numbers over the next 12 months.”

The retail (non-food) industry dominates the Australian franchising sector, with 26 per cent of brands falling into this segment. Then there are 19 per cent of franchise brands in accommodation and food services, 15 per cent in administration and support services, and 10 per cent in other services such as automotive repairs and IT. Here are 10 reasons why a franchise option works.

HANDS-ON-EXPERIENCE The rigours of establishing a business from scratch are considerable, and in a franchise there is a wealth of experience to draw on that can simplify the process.

A franchisee starts with training, receives a manual to guide them through the day-to-day running of the business, and benefits from hands-on experience from the franchisor team.

There may also be guidance on which equipment to buy, advice on staff employment, and help in choosing location and negotiating a lease agreement.

BRAND EQUALITY One of the biggest reasons to opt for a franchise business is brand recognition.

If you choose an established brand with a strong profile, you’re already winning when it comes to opening the doors – your potential

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customers will know what to expect.

Allied to that is the strength of marketing campaigns that cement the brand in consumer awareness, or a niche market if it is a business-to-business venture.

It is a distinct advantage to be trading with a well-recognised brand.

TRIED AND TESTED A franchise business gives its franchisees the chance to piggyback on the franchisor’s experience. This means the process is tried and tested, and there is a clear understanding, for instance, of what customers respond to and which working methods are costeffective and productive.

The franchisor has already worked out which marketing tools produce the best results and how best to get a message across to the community, so franchisees don’t need to spend time or money doing such research themselves.

COMPETITIVE ADVANTAGE It is hard for an individual business owner, even in established business networking organisations, to access the amount of information a good franchise system can supply its franchisees on an ongoing basis.

The joy of a franchise network is access to the experience of others in the same position. In some franchise systems, this might be available through formal forums or through engaging fellow franchisees through an intranet. Another option is mentoring. Even informal friendships across the network can help steer franchisees through challenging times.

Despite all his or her experience, the franchisor does not have all the answers, but practical advice available from others in the frontline is invaluable for a franchisee.

BUYING POWER Major chains can out-muscle a small independent with their buying power.

That’s a competitive advantage also shared by a franchise system, allowing franchisees to reap the rewards from the franchisor’s negotiations on ingredients, merchandise or equipment. Experienced practitioners can also negotiate a retail lease on behalf of franchisees.

Some franchisors in the business services field can also supply their franchisees with local clients as part of a national deal.

ACCESS TO FINANCE Securing a loan from a bank is harder these days, but being part of a franchise network can be an advantage. While financial institutions have tightened their lending criteria, they look to support strong business models. A tried-andtested business with good systems, a known brand and franchisor experience can be appealing to any lender.

A banker’s understanding of the business concept can be developed over years through a relationship with the franchisor, and that knowledge is lacking for start-ups.

Franchising is not just about big names - some of today’s giants were yesterday’s newbies, so franchisees could well be in on the start of something big.

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INNOVATION Imagine the challenge of staying ahead of the competition, keeping track of upcoming trends, researching and investing in technology to improve your business. Not easy for an independent new business.

It is not easy for any business today to progress without technology, be it for data capture and analysis, tools, communicating or social media.

For a franchisee, innovation, research and investment in technology are all vital elements - and they are in place through the head office.

GROWTH OPPORTUNITIES For the ambitious business owner, one outlet might not satisfy their personal or financial goals. The advantage of a franchise model is that in many cases there is a path to multi-unit ownership. Many franchise systems see the value in successful franchisees taking on the next challenge, and helping to grow the brand at the same time.

Franchisors can also review the franchisee’s ability to move to the next stage of growth. They can help the franchisee understand how best to manage the extra sites, and provide guidance as the business moves into a new sphere.

BUSINESS SUPPORT It is much easier to concentrate on developing a business once the right structure and processes are in place. Buying into a franchise model provides a natural advantage.

Franchisors typically seek franchisees who have ambitions to build their business, although some models accommodate a more modest approach for franchisees whose prime concern is lifestyle.

Most franchisors are engaged in helping franchisees achieve their own goals, and although a franchisee’s business is their own responsibility, business development or field managers are able to offer advice on how to improve sales, cut costs and increase profit.

Boutique.

Sophisticated.

Private.

Exclucive.

More advanced franchise systems use data to benchmark and inform the network about success, and encourage sharing of best practice between franchisees.

GOVERNANCE CODE A regulatory code governs the franchise sector, and it is crucial to the relationship between franchisor and franchisee.

The Franchising Code of Conduct sets out rules for the content of key documents in the franchise buying stage – the disclosure document and the franchise agreement – and requires franchisors to provide these documents at least 14 days before they hand over non-refundable money or are signatories to an agreement.

The code is administered by the Australian Competition and Consumer Commission, which can investigate alleged breaches and take action if necessary. 

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FRANCHISE BASICS

FRANCHISING 101

Running a franchise basically involves compliance and commitment, and it works when everyone in the partnership is making a profit.

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M

any Australians dream of owning a business, and franchising provides an opportunity for anyone to grasp the chance of business ownership.

But how exactly does franchising work?

First, the basics. A franchisor heads up the overall business and effectively grants an individual or company (the franchisee) the rights to run a branch of the business under specific guidelines.

The franchisor licenses franchisees the right to run the business for a specific period, the franchise term. This can be three to five years, or longer. Upon expiry, some brands offer the franchisee the option to renew the licence.

In return for the rights to run a business, franchisees pay franchisors an initial fee plus regular ongoing fees. These payments are in exchange for the franchisor’s expertise, tried-and-tested methods and brand power.

The initial investment and ongoing fees can cover the following: • training before the start of trading • provision of a business model • the backing of an established brand • the franchisor’s operating systems and processes • marketing support for local or national advertising campaigns • ongoing support for the life of the term

WHAT MAKES IT WORK? Franchise models depend on everyone in the group following the system. It is a matter of compliance and commitment.

There are two important questions a potential franchisee should be asking: Does the system comply with the law, including the Competition and Consumer Act and the Franchising Code of Conduct?

Franchise models depend on everyone in the group following the system.

will deliver franchisees the opportunity to be financially successful. Franchising works when everyone in the partnership is making a profit.

WHY FRANCHISE? Owners who want to expand their business concept turn to franchising as a method of growth for several reasons.

For example, the franchisor • may need the capital invested by the franchisees to grow the business • may believe in the power of independent business owners to more successfully run an outlet than a paid employee • may be looking for swift growth • wants to service clients nationally • wants less capital risk • wants to keep staff levels at a minimum

WHAT’S INVOLVED? Franchisees must run the business as outlined in the operations manual provided by the franchisor.

Some franchises are defined by territories, which may or may not be exclusive.

Territories or locations can be either already established or brand new (referred to as “greenfield”). There are advantages and disadvantages to both, so making the choice is a matter of personal preference, financial capacity and availability.

Can I comply with the system and the franchise agreement?

It is vital to understand that despite what is advertised by the franchisor, there is no guarantee of success or immunity from the risk of a franchisor going bust.

The franchisee will be responsible for running and growing their own business, so will need the ability to do this, and to stay motivated and committed through the life of the business agreement.

Researching the business and the specifics of the opportunity, and conducting due diligence with legal and financial professionals is essential, no matter how well-known or established the brand.

Franchising works best when there are good relations between franchisee and franchisor.

Together with the power of the brand, the backing of the franchisor and following a proven system, it can be a profitable venture.

Finally, it is important to know that franchises are regulated by the Franchising Code of Conduct, administered by the Australian Competition and Consumer Commission. This document provides rules and protections for both franchisors and franchisees. 

That is crucial - a successful franchise model

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FRANCHISE BASICS

KEEPING

THE CODE Transparency and good faith are fundamentals underlying the rules and regulations governing in franchising industry.

DR MICHAEL SCHAPER Deputy Chairman, ACCC

W

orth $146 billion to the Australian economy, the franchise industry is highly regulated with the Franchising Code of Conduct the foundation of this governance.

Since 1998, the franchise sector has been regulated by the Australian Competition and Consumer Commission (ACCC). There have been updates to the rules over the years, with the code being overhauled with effect from January last year.

A new requirement is that both franchisors and franchisees act in good faith at all times, and that franchisors provide greater transparency. The new code also includes court-ordered penalties of up to $54,000 for certain breaches, and allows the ACCC to issue infringement notices.

It is easy to access the code online, but ACCC deputy-chairman Dr Michael Schaper offers an overview of what the Franchising Code

of Conduct does and why it is important. He says there are three key points: 1. It is a mandatory code with the force of law under the Competition and Consumer Act 2010.

2. The code aims to help prospective franchisees make an informed decision about buying a franchise. It also entitles them to specific information during the life of their franchise agreement, and gives them certain rights as their agreement comes to an end.

3. The code also provides a cost-effective dispute resolution procedure.

Alleged breaches of the code of the Competition and Consumer Act can be investigated by the ACCC, which has the power to take enforcement action.

WHEN DOES THE CODE APPLY? The code applies to any franchise agreement in Australia. A franchise agreement is a written, oral or implied agreement: • Under which one person (the franchisor) grants to another person (the franchisee) the right to run a business supplying goods or

services under a certain system • That is associated with a trademark or a commercial symbol • Under which the franchisee must pay an amount to the franchisor or its associate (for example, a royalty or training fee).

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M CREATE

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any Australians dream of owning a business, and franchising provides an opportunity for anyone to grasp the chance of business ownership.

how exactly does franchising work?

OFFERINGBut YOU AN AFFORDABLE CHANCE First, the basics. A franchisor heads up the TO OWNoverall A LAVA FRANCHISE business and COFFEE effectively grants an individual or company (the franchisee) the rights to run a branch of the business under specific guidelines.

The franchisor licenses franchisees the right to run the business for a specific period, the franchise term. This can be three to five years, or longer. Upon expiry, some brands offer the franchisee the option to renew the licence.

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In return for the rights to run a business, franchisees pay franchisors an initial fee plus regular ongoing fees. These payments are in exchange for the franchisor’s expertise, tried-and-tested methods and brand power.

The initial investment and ongoing fees can cover the following:

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Being my own boss is the best decision I’ve ever made WHAT MAKES IT WORK?

Franchise models depend on everyone in the group following the system. It is a matter of compliance and commitment.

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The franchisee will be responsible for running and growing their own business, so will need the ability to do this, and to stay motivated and committed through the life of the business agreement.

Franchising works best when there are good relations between franchisee and franchisor.

Together with the power of the brand, the backing of the franchisor and following a proven system, it can be a profitable venture.

That is crucial - a successful franchise model

WHAT ARE YOUR RIGHTS BEFORE SIGNING? Before you sign up to run a franchise, a franchisor must give you: • an information statement that highlights the risks and rewards of franchising • a copy of the code • a current disclosure document • a franchise agreement in its final form at least 14 days before you enter into, renew or extend a franchise agreement, or pay non-refundable amount relating to a franchise agreement.

The franchise agreement is a legally binding agreement that sets out your rights and obligations, as well as those of the franchisor.

Read it carefully and seek legal advice if you do not understand one or more of its clauses.

The disclosure document includes critical information you need to know before you buy a franchise, including the business experience of the franchisor’s officers, details of any litigation against the franchisor or one of its officers, contact details of current franchisees and some past franchisees, whether you will have an exclusive territory, whether you or the franchisor can sell online, and any restrictions on where you can source goods or services.

The disclosure document will also include your start-up costs and any other payments you must make, details of what will happen

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when your agreement ends (including whether you will have an option to renew and whether you will be entitled to an exit payment), and any requirement to enter into a related agreement (for example, a lease agreement).

to exercise your cooling-off rights, the franchisor must provide you with a refund – minus any expenses incurred that are deemed reasonable - within 14 days.

The franchisor is not required to give you earnings information about any of its franchises.

WHAT ARE YOUR RIGHTS AFTER SIGNING?

• Franchisor termination and what happens if you breach the agreement • Transparency around marketing funds • Dispute resolution • Leasing incentives

As a franchisee you can terminate a franchise agreement within seven days of entering into it or paying any non-refundable fee, whichever comes first. If you do choose

Alleged breaches of the code or the Competition and Consumer Act can be investigated by the ACCC, which has the power to take enforcement action.

The Code of Conduct also provides rules on:

Disputes about contractual issues are best resolved directly by the franchisee and franchisor or via a mediator. You can find mediation services through your franchise agreement, a small-business commissioner or the Office of the Franchising Mediation Adviser.

Mediation is often a quicker and cheaper option, allowing both parties to continue working together.

You can access more information about the Code and read it in full, at the ACCC website: www.accc.gov.au. 

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FRANCHISE BASICS

COMMON

VISION

A strong relationship based on trust is at the heart of the business relationship between a franchisor and franchisee.

F

ranchising works not just because of the branding, the processes and the training on hand; it works when the franchisor and franchisees share a common vision, trust each other’s role in the business and fulfil their obligations.

It is important that franchisors share their vision, listen to feedback, communicate effectively, treat franchisees with respect, and get out in the field and become involved with the community.

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Franchise Relationships Institute founder Greg Nathan lists five attributes a franchisor should bring to the franchise relationship.

1.

2.

3.

4.

5.

Credible leadersip An understanding of franchisee aspirations The promotion and protection of the brand A working business model A healthy culture

meetings and conferences, or informally through mentoring and local connections.

This ability to access advice and support from other people in the network is one of the great strengths of a good franchise.

COMMITMENT

Franchisors need to be clear about what they expect from franchisees, and what support they will – and will not – provide.

REGULAR SUPPORT The business development or field manager will be the face of the franchisor for most franchisees throughout their team with the brand. This crucial support role has the demands of enforcing compliance, encouraging business growth and keeping franchisees on track with their personal and career goals.

A good field manager will have a great relationship with their franchisees.

Beyond the regular visits and communications from the field manager, franchisees will have opportunities to connect with others in the network - either formally through regional and national

Trust is fundamental to any relationship, and the nature of the franchise set-up demands transparency on both sides.

The honesty starts with the recruitment process. Franchisees need to be candid about their goals and financial status, and be frank about how much time and effort they are prepared to put into the business.

They need to do their part: be optimistic, follow the rules, understand and fulfil their obligations, have a great work ethic. They also need to be network advocates, sharing their experiences and best practice with others.

Like the franchisor, franchisees are obliged to act in good faith at all times in their franchise relationship.

Franchisees are often told they are in business for themselves but not by themselves. It is a franchising truism that underlines the interconnectivity of the business model.

University of Sydney Professor of Business Regulation Andrew Terry has written

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Trust is fundamental to any relationship, and the nature of the franchise set-up demands transparency on both sides.

that the term “commercial marriage” is often used to describe the franchising relationship because it is characterised by interdependence and longevity and good faith to a much greater extent than any other business dealings.

The fact that many franchise groups refer to their franchisees as franchise partners indicates the value they put on the relationship. 

FRANCHISE BASICS

IT’S ABOUT TIME There are options when it comes to extending a franchise agreement, or if you want to quit the deal early.

W

hen you buy into a franchise, you will in most cases be signing up to run the business for a set period of time.

A franchise agreement is the contract that binds your business relationship with the owner of the franchise model, the franchisor. There are rare cases of perpetual agreements, but a franchise agreement generally has an expiry date.

The period stipulated in the agreement should be long enough to enable you to recover your monetary investment and repay any loans associated with the initial purchase of the franchise.

A common set-up is for a three- to five-year term, with an option to renew the agreement for another agreed period.

The term of the franchise may also be subject to a lease agreement. It is ideal if the franchise agreement and the term of the lease are aligned.

RENEWING AN AGREEMENT The process of renewing a franchise term is governed by the Franchising Code of Conduct, so certain timescales and actions need to be observed by the two parties.

The franchisor must supply disclosure information, for which franchisees should seek legal advice. This is particularly important if there are amendments to the agreement.

The payment of a renewal fee and an obligation to refurbish the business as the franchisor sees fit are commonly part of the contractual obligations.

It is important to remember that renewals are not guaranteed.

CAN YOU EXIT EARLY? There is a strictly observed seven-day cooling-off period, which means a franchisee can pull out of the franchise agreement almost immediately after signing it or paying

non-refundable amounts. This will not be a cost-free exercise, however. The franchisor is entitled to retain reasonable costs.

A franchisee may also choose to sell their business early. This might involve leaving

the business a year or two before the end of the agreed term. If the business has been a rip-roaring success it might be easy to sell, but if there is a compelling need to sell because of a poor financial situation, a sale is more challenging.

It is likely the agreement will outline restrictions on a sale. For instance, you will probably need the franchisor’s approval of the incoming franchise buyer.

If the lease ends earlier than the franchise agreement, for whatever reason, and replacement premises or a franchisee cannot be found, terminating the lease by mutual agreement is an option.

Another exit option could be for the franchisor to buy back the business.

If the lease ends earlier than the franchise agreement, for whatever reason, and replacement premises or a franchisee cannot be found, terminating the lease by mutual agreement is an option.

In all instances, seeking legal advice from lawyers expert in the franchising sector will set you in good stead, both before signing any agreement, and when you need to renew or end your term agreement. 

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FRANCHISE BASICS

BUSINESS BLUEPRINT Every detail about a franchise can be found in its operations manual, and it explains in precise terms what you are buying.

The contents page will give you a snapshot of the content the franchisor has developed and documented.

Ideally each section will clearly explain what the topic is about, what is expected of you, why it is important to your business, how to complete it, how you will be measured on it, how it drives your business success and where to find more related information, training or support.

A typical manual will include:

O

ne of the most important documents for a franchisee is a franchise system’s operations manual.

It provides a blueprint for the daily running of a franchise, and is crucial to your business.

In effect, it explains exactly what you are buying.

The manual should cover the intellectual property of the franchise system - what it is, and how it is to be used. It should also clearly set out what operational excellence entails, define the group’s expectations of you as a franchisee, and detail how these these parameters will be executed and measured in the business.

• General information about the franchisor • The relationship with the franchisor, meetings, conferences, performance requirements, non-alignment, expansion, renewal and support expectations • Information about the key roles - the employees who will be staffing the franchise business. This can include job descriptions, uniform requirements, recruitment procedures, training and performance-management criteria • Sales processes, marketing programs, trademark use, customer loyalty, public relations and social-media strategies • Details of products and services, and approved suppliers • What is required for set-up: the branding, equipment and furniture requirements as well as store hours and procedures

• Information about the tools and machinery to be used, and safe work practices • A set of standards or goals for customer service alongside procedures for handling complaints • Branding requirements for items such as stationery, advertisements, signs and posters • Policies and procedures, including equal opportunity, workplace conduct, dispute resolution and employment • Health and safety information • Business planning, budgets, forecasts and cash flow Your potential franchisor is unlikely to let you remove the operations manual from head office, but you can usually view the document at the premises.

When you read it, remember that it is your business bible. If it is easy to find what you need, the more you will use it.

Look for a manual written in point form and shortlists, with photos and images that match the content, displayed in a checklist or flowchart and referenced with links to other sections or online resources.

The operations manual is the backbone of the business and should be regularly updated by the franchisor. 

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FRANCHISE BASICS

STEPPING STONES TO SUCCESS There is a typical path to be taken if you want to sign up to a franchise business.

W

hat is the process of signing up to a franchise? Inside Franchise Business looks up at the steps involved from an initial inquiry to committing to the brand.

Hairhouse Warehouse franchise development manager Peter Fiasco says franchisors should explain their process to you very early in proceedings.

Each franchise chain will have its own specifics, but this is a typical path you will follow to join a franchise.

MAKE AN INQUIRY You either fill out an inquiry form and wait to hear from the franchisor, or get on the phone and go straight to the recruiter for further details.

INFORMATION If you have emailed an inquiry, typically a franchisor will send out an information pack to you, and follow this up with a phone call.

remains confidential. Fiasco says franchisors look for speedy responses.

“The speed with which franchisees complete this document and return it tells us a lot about the candidate’s enthusiasm about proceeding. Someone who is eager will not waste much time in filling this out.”

In return for a refundable deposit, the franchisor will supply you with further information. Expect a copy of the disclosure document, draft franchise agreement and the Franchising Code of Conduct, plus an information statement.

Your franchisor might commercially sensitive help you consider the franchise opportunity business plan.

also send more information to viability of the and build your

FIRST MEETING Now it’s time to meet the franchisor’s

DUE DILIGENCE Now the focus is on you. This is your time to really research thoroughly whether buying the franchise would be the right step for you. This is a time to speak to franchisees, to seek accounting and legal advice, to find independent information beyond that provided to you by the franchisor.

This is a crucial stage, so take your time and be thorough. You will need to sign a document saying you have either received independent advice, or have decided not to do so. Obtaining expert opinion from franchise-experienced professionals can save you money in the long term, so it is a worthwhile investment.

OTHER STEPS

QUESTIONS This is the first opportunity for you and the franchisor to discuss some of the basics of the business, and for you both to make some evaluations. If you ask pertinent questions and the franchisor poses questions that elicit the right information, you will both have a sense of whether or not this could be a good relationship.

and understand more about your respective goals. Will your personal ambitions align with the company’s vision? Will you each benefit from partnering? Can you see yourself working in this business for three, five or more years? Do the numbers add up?

recruiter.

This is a very important meeting because you both get to know each other better

Some brands add extra steps to their recruitment processes. Variations can include extra interviews, try-before-youbuy work experience or a panel review.

The franchisor might ask you to undertake a profiling assessment, which could include online self-assessment.

The process to get from inquiry to sign-up could be a matter of weeks, or it could be months.

CONFIDENTIALITY

Buying a franchise is a significant, long-term commitment. It is important not to rush the process. 

The next stage will be for you to receive a document to sign, assuring the franchisor that the information shared with you

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FRANCHISE BASICS

TAKING THE RISK Buying a franchise is like buying a business, there are always risks involved. Here are 12 to consider.

S

ome franchise buyers view investing in a franchised business as an assured route to making a substantial profit.

While purchasing a franchise can produce a strong return on investment, this is not always the case. It’s important that potential franchisees understand some of the dangers inherent in the franchise model.

Of course it’s vital to remember that each franchise buyer will have a different acceptance of risk, depending on their personalities and personal situations. Here are a dozen common risks to assess:

CHOOSE THE RIGHT SYSTEM There’s a risk in taking shortcuts to buying the business. Doing the research to find a franchise business model that works for the franchisee makes sense. The process of due diligence, conducted thoroughly, gives a franchise buyer confidence that their selection is based on facts and figures, not speculation, rumour and instinct.

There are plenty of elements to investigate to get a better understanding of how the franchise model operates, the people behind it, the rules that govern the agreement, and the benefits to franchisees.

figures, not imagined revenue, are what counts. Reliance on a promise or projections from the franchisor can lead to dissatisfaction.

content and the consequences. A franchisee needs to fully appreciate the obligations and procedural requirements of the franchisor.

“The financial success of a franchised business will depend on its location, visibility, amount of rent and outgoings payable, higher competition in a particular area and the ability of the franchisee to operate and grow their business,” says Garber-Rosenzweig.

Not reading the documents through takes a franchisee one step closer to a serious misunderstanding.

Just because a franchise has the benefits of a tried and tested system, a brand name and expertise in head office, it doesn’t mean there’s a guarantee of success.

It’s important to take this into account, and for franchise buyers to make their own estimates.

POOR SUPPORT There’s a risk that the franchisor won’t provide the level of support that franchisees require.

Every franchisor and their offering is different. Franchise buyers who are banking on a premium support structure will want to ensure this is a reality. Speaking to franchisees is the best way to find out whether the promised back-up, training and guidance is actually delivered.

NON-COMPLIANCE

Taking time for this process and not rushing to meet an imposed deadline is a wise way to approach the purchase.

There’s a risk that the franchisee will neglect to follow the system - either by choice or through oversight.

HIGH EXPECTATIONS

Franchising involves operating under the franchisor’s name and using its processes and systems. Complying to the rules and procedures put in place by the franchisor is crucial.

There’s a risk that over-optimistic franchise buyers will be disappointed once the excitement of a new business wears off.

Gable Lawyers’ Jane Garber-Rosenzweig says “Franchisees often have extremely high expectations of the business they are buying, including its earning and growth potential.”

These expectations can be influenced not just by the information the franchisor provides, but by a general perception of what the franchisee believes the business should turn over.

It’s important to remember that factual

Franchisee shortcuts can slip through the franchisor’s safety net but this doesn’t help the franchisee or the network at large. And if there is continual flouting of the system, that can result in a breach of the agreement with legal and financial consequences.

SKIMMING THE DOCUMENTS There’s a risk that franchisees will sign documents without fully understanding the

“This, in turn, leads to breaches of the franchise agreements and possible termination, resulting in the loss of the business and a loss of a large financial investment,” says Garber-Rosenzweig.

BUSINESS MODEL There’s a risk investing in a new or emerging brand because of lack of evidence of its long term viability. Will the brand grow into a successful franchise? Can the model be successfully replicated in different locations and in differing economic environments?

Is there really a long term demand for this product or service?

A new or up and coming franchise doesn’t have the brand awareness of more established businesses. It’s worth remembering that novelty and the existence of an operations system doesn’t naturally equate to business success.

Once again, conducting research into the brand, and the potential of the market, is essential.

FRANCHISOR FAILURE There’s a risk that the franchisor’s brand will go belly-up. It happens. And as a franchisee the reputation and success of the franchised business is directly dependent on that of the franchisor.

Even if the franchise brand faces minor difficulties - perhaps negative social media comment or a health scare - this will have a direct impact on individual outlets within the network.

If the franchisor becomes bankrupt or insolvent, there may well be a buyer for the business and it will go on to bigger and better things.

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But the worst case is that there may not be any business to operate, as franchisees will no longer have the right to operate under their brand and in many cases the landlord will have the ability to terminate a lease agreement.

FIXED PAYMENTS There’s a risk in NOT paying regular fees to the franchisor if times get tough.

Franchisees are usually required to pay a number of on-going payments to the franchisor, including royalty and marketing fees. These fees can be fixed or stated as a percentage and are payable at fixed intervals, usually on a monthly basis.

When a business is struggling financially, fees still have to be paid. Avoiding these payments has serious consequences.

SELLING THE BUSINESS

SUPPLY CHAIN There’s a risk that franchisees will pay a higher price for products or equipment which need to be sourced through specific suppliers.

Many franchise agreements put restrictions on where a franchisee can purchase products and while it is to be hoped that the franchisor will source competitive deals the franchisees are obliged to comply with the arrangement.

LACK OF COMMUNICATION There’s a risk that franchisees will forget to communicate with the franchisor. Franchisees have signed up to a business because they don’t want to be alone in their business journey. So it makes sense to keep the lines of communication open, and not just when things go awry and there’s a need to complain.

Of course the franchisor needs to be a good communicator too and it’s worth finding out from existing and former franchisees how well this is actioned.

There’s a risk that when it comes to sell the franchised business the franchisor will not approve the incoming franchisee. It’s a common procedure outlined in franchise agreements that require the franchisor to ratify the potential purchaser.

Poor communication can mean missed business opportunities, missing out on bestpractice tips from fellow franchisees, and avoiding dealing with critical situations.

Failure to get approval can affect the timing and price of the sale.

There’s a risk that when ending a franchise agreement and choosing to set up a similar

RESTRAINTS OF TRADE

business in close proximity a franchisee could be in breach of a restraint of trade clause.

Most franchise agreements impose a restraint of trade and it’s important that franchisees understand the restrictions to ensure there is no impact on their future.

Buying a franchise should never be a quick decision. It’s important that franchisees weigh up the pros and cons, assess all the risks and make a judgement based on their own situation.

Just because the risk is there, doesn’t mean it can’t be mitigated or embraced.

Professional advice is invaluable in ensuring that all potential risks are addressed. 

There's a risk in NOT paying regular fees to the franchisor if times get tough.

GET THE RIGHT ADVICE GET THE YOU RIGHT ADVICE BEFORE COMMIT GET THE YOU RIGHT ADVICE BEFORE COMMIT BEFORE YOU COMMIT

Whether a Franchisee or a new Franchisor getting the right advice from specialists with industry knowledge and experience may save you Whether a Franchisee or a new Franchisor getting the right advice considerable money and heartache in the future. from specialists with industry knowledge and experience may save you Whether a Franchisee or a Marchesi new Franchisor getting the right advice Robert Toth and Marianne have 30 years of specialist considerable money and heartache in theover future. from specialists with industry knowledge and experience may save you franchise knowledge and experience.

Robert Toth and Marianne Marchesi have 30 years of specialist considerable money and heartache in theover future.

We act forknowledge local and international Franchisor’s and local master franchise and experience.

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We act for local and international Franchisor’s and local master Franchisor. We provide fixed fees based on the scope of services.

Contact Robert or Marianne on (03) 9604 9410 or by email at Robert rxt@marshmaher.com.au Contact or Marianne on (03)/ 9604 9410 or by mim@marshmaher.com.au email at Robert rxt@marshmaher.com.au Contact or Marianne on (03)/ 9604 9410 or by www.marshmaher.com.au mim@marshmaher.com.au email at rxt@marshmaher.com.au / www.marshmaher.com.au mim@marshmaher.com.au www.marshmaher.com.au

Marsh & Maher are members of: The Franchise Council of Australia (FCA), International Franchise Lawyers Association (IFLA), US Commercial Service.

Marsh & Maher are members of: The Franchise Council of Australia (FCA), International Franchise Lawyers Association (IFLA), US Commercial Service.

Marsh & Maher are members of: The Franchise Council of Australia (FCA), International Franchise Lawyers Association (IFLA), US Commercial Service.

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FRANCHISE LICENSING AND RETAIL GROUP FRANCHISE LICENSING AND RETAIL GROUP FRANCHISE LICENSING AND RETAIL GROUP

FRANCHISE BASICS

KNOWLEDGE IS

POWER The more information you glean about a franchise the better placed you are to make a decision about investing in the business.

T

here’s a term you’ll hear as you go about your search for a franchise: due diligence.

Franchisors, lawyers, accountants and other advisers will talk about the importance of due diligence. But what is it? Due diligence is simply research – thorough research of a business opportunity that allows you to make an informed decision about whether or not to proceed.

The Franchise Council of Australia is the peak body in the sector and a central point of reference for new franchisors and franchisees.

CEO Damian Paull says “Making sure that you complete your due diligence before embarking on any business journey is one of the most fundamental steps you need to take when considering buying a franchise.”

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In the search for a business opportunity you will scour the internet, question friends and family, and read all the information provided by franchise brands. You’ll ask the franchisor key questions about the business operation, the particular location, how you will run the business.

When you have reached the critical stages of franchisee selection and have received copies of the disclosure document and franchise agreement, it’s time to raise your research activities to the next level.

Of course it’s vital to remember that each franchise buyer will have a different acceptance of risk, depending on their personalities and personal situations.

Here are a dozen common risks to assess:

DUE DILIGENCE Whether you have $30,000 to buy a services business or want to invest in a million dollar purchase of a food franchise, you are putting your money (and your family’s funds or the bank’s loan) into a business that you need to make work.

So it makes perfect sense to put time and

effort into ensuring the business you pick will deliver what you expect. We need to add a caveat here.

Of course you’ll need to choose wisely, and that’s part of the process of due diligence, but there are too many variables for a franchisor to give any assurances of financial performance.

Lawyer Jane Garber-Roszenweig says “Even the most recognised brands will yield different financial results in different areas. The financial success of a franchised business will depend on its location, visibility, amount of rent and outgoings payable, higher competition in a particular area and the ability of the franchisee to operate and grow their business.”

Above all, your aptitude, attitude, commitment and hard work will make a significant difference to the success of the franchise.

That’s been the experience of Tim Sinclair, general manager of Laser Clinics Australia.

“The single biggest value creator is the quality of the franchisee,” he says.

“A good franchisee in an average location will do well; a poor franchisee in a good location

won’t do well.”

So let’s assume you are the perfect franchisee.

What do you need to know about your possible business venture that will reassure you the purchase will be a good decision?

There will be different considerations according to whether or not the business you are buying is an existing business or a so-called greenfield (brand new) site.

Below is a starter list of general questions to ask:

14 things to consider in due diligence: • Can the business model deliver a profit?

• Is the location right for the business?

• Is the franchisor compliant with regulations?

• Does the franchise have a low level of disputes?

• Does the franchisor provide good support?

• Are franchisees happy?

• Do franchisees renew their agreements?

• Is the documentation up to date and complete?

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• Is there a healthy cash flow?

• Where does the revenue come from?

• Are there any hidden liabilities?

• Are there any GST or tax implications from the purchase?

• What information is there about employee salaries and benefits?

• Are there any legal proceedings against the seller?

seduced by the franchisor’s fancy website and marketing literature.

MST Lawyers partner Raynia Theodore has this advice: “Although franchising is a proven business method and the franchise network you are considering may be a well-established network there are always risks associated with buying a business.”

Thorough due diligence is required and as a starting point Theodore recommends you consider the following: • your motivation – your goals and desired lifestyle; • the type of business and whether its suits your personality and investment expectations; • whether specialised knowledge is required; “Thorough investigation of the business and the legal documents is essential. Don’t be

“You should obtain a copy of the franchisor’s franchise agreement and disclosure document and contact existing and past franchisees of the network (whose details should be in the disclosure document) and ask questions such as whether they receive adequate training and support from the franchisor, how long it took them to see a return on investment and whether they are satisfied with the overall franchise system.

“It is imperative that both legal and financial advice from advisers that specialise in franchising be obtained.

“Such advisers can ensure that your business is appropriately structured to suit your circumstances and provide advice on the viability of the business.”

Kate Groom of Smart Franchise and the Franchise Accountants Network says three important parts to due diligence, when combined, can help you assess the financial side of a franchise.

“First, the disclosure document will indicate the cost to set up the business. You should also look for information on the historical performance of the franchise, such as sales and expenses.

“Next, turn to a franchise accountant who can provide an impartial assessment of the figures.

A key part of this is insight into the sales you need to achieve in order to make a decent living.

“The third part is to compare these projections with the actual results of franchisees, to assess whether your goals are achievable.”

WHERE TO FIND INFORMATION Damian Paull says “One of the best places to start is the franchisor’s network, which should provide you the necessary information on franchise agreements, disclosure documents, marketing funds and much more.

“You should also speak to as many other existing franchisees in the franchise to ascertain that they are happy within that franchise and to check that the franchise is profitable for them.

“Ask if the franchise is a member of the FCA. Members of the Franchise Council have committed to following the mandatory Franchising Code of Conduct, plus any FCA designated member Code of Conduct.

This, in addition to common law rights, increases protection for franchisees from unscrupulous operators.

Buying a franchise means buying an investment, and at Inside Franchise Business, we understand the need to buy with confidence.

Join our dynamic franchising community and you can: • Browse more than 4,700 franchise opportunities to discover on Franchisebusiness.com.au – the Official online directory for the Franchise Council of Australia – the peak body for the $146-billion franchise sector in Australia • Free online educational program “How to buy franchise” designed to kick-start your journey into franchising • Access essential financial, legal and business advice and up-to-date news and information • Be inspired by real-life stories of everyday people making their franchising dream a reality

INSIDE

Inside Franchise Business is your essential guide to buying franchise – join us online now at www.franchisebusiness.com.au

FRANCHISE BUSINES S official online directory

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“It is always essential that anyone considering becoming a franchisee receives competent professional advice from qualified and experienced advisors.

The FCA can direct potential franchisees to accountants and lawyers who are members of the Council and who understand franchising, which is a specialist field of practice.

“A comprehensive list of service providers is available on www.franchisebusiness.com. au.

“The Australian Franchise Registry is a voluntary low cost registration platform that enables genuine franchise brands to promote their commitment to compliance and signal the availability of other key stakeholder information.

“Prospective franchisees, banks and other

key observers can all search available brands through the publicly accessible search function, free of charge.”

Paull says it’s important for franchise buyers to consult professionals who specialise in franchising for further advice or for any queries that the franchisor or franchisees can’t answer.

“The ACCC also has a free online pre-entry franchise short course to give you the best foundation for your success, and will provide you peace of mind that franchising is the best business model for you.”

It’s crucial to speak with as many existing and former franchisees in the network as possible to gauge their views on the franchise.

But even more important is seeking legal and accounting advice from experts.

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Franchise professionals are a valuable source of guidance because they have experience in the sector, they understand the nuances of the franchise relationship, they are familiar with the Franchising Code of Conduct, and they know how the numbers stack up.

HOW LONG SHOULD IT TAKE? The amount of time that due diligence takes will be different in each case, advises Dr Michael Schaper, deputy chairman of the Australian Competition and Consumer Commission.

“While the Franchising Code prevents you from buying a franchise unless you’ve had at least 14 days to read the disclosure document and franchise agreement, this doesn’t mean that 14 days is enough time to undertake adequate due diligence.

“It will take time to find experienced professional advisors, and for them to provide advice. Current franchisees may be busy, and you might not get a chance to speak to them for some time.

“So give yourself at least three or four weeks to cover all the issues. Don’t feel rushed into signing anything or paying any money. If a franchisor is pressuring you to pay money or sign an agreement before you have done your due diligence, treat this as a warning sign.”

Jason Gehrke at the Franchise Advisory Centre has a guiding principle for due diligence: for every $1000 to be invested, spend one hour on research.

HOW MUCH WILL IT COST? You will need to be prepared to invest in this process. Professional advisers will charge you a fee for their research and analysis, and although this might seem

a hefty sum to pay upfront, the costs of getting it wrong can be so much greater.

A 2016 survey conducted by the AsiaPacific Centre for Franchising Excellence revealed that the average spend on due diligence for existing franchisees was just $2,500 - not enough to allow for detailed feedback.

According to the report authors, “this low spend on pre-purchase professional advice while conducting due diligence implies a rather cavalier approach to understanding and managing financial and business risk”.

In fact more than half (54 percent of respondents) sought free legal advice or avoided consulting a lawyer altogether; almost 40 percent avoided accountancy fees.

Franchisees spent more time investigating the business with the franchisor than conducting independent research. However,

69 percent of current franchisees believed they would have benefited from doing further research before buying the business.

And it’s telling that half the franchisees surveyed admitting they overlooked information or advice because of their determination to go ahead with the purchase.

It's easy to get carried away with the excitement of the moment but this is a big decision. When you buy a house you need to pay for a building inspection, a surveyor’s report and for conveyancing.

It’s no different when you purchase a business - it’s a major investment and the consequences of getting it wrong can be significant and painful.

Buying a business is exciting and can prove to be a rewarding first step to achieving your ambitions, so be prepared to put in time, money and effort to get it right and give yourself the best chance of success. 

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FIVE REASONS WHY

FRANCHISE BASICS

FRANCHISING WORKS

YOUR PASSIONS AND SKILLS SET 1. KNOW The expansion of the Singer sewing machines brand back in the early 1920s is often quoted as the beginning of modern franchising, and KFC started out in 1930. But we are more likely to consider the 1950s conversion of the McDonald’s brothers’ burger business by go-getting Ray Kroc (the subject of recent film The Founder) as the start of the movement we understand today as franchising.

food brands are multi-generational franchise successes. But it isn’t just the food retailers that have stood the test of time.

The specialist tools mobile retailer Snap-On is a global phenomenon that began life back in the 1920s, also in the US, and has reached for the stars, providing equipment for NASA, as well as the neighbourhood mechanic.

Either way, the franchise method of doing business is well established. Some of the fast

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2.

IT’S GOT THE NUMBERS

In Australia the sector is valued at $146 billion, with 472,000 people employed through the 79,000 franchised outlets. There are 1120 brands operating in this field.

In the US, according to the International Franchise Association, 733,000 franchise businesses support 8 million jobs and 3.5 percent of the country’s gross domestic product.

A report in January 2016 in the UK measured the contribution of the sector to the country’s economy as about £15.1 billion, an increase of 46 per cent over the past 10 years.

There were 621,000 employees, and the number of franchisee-owned businesses had increased by 14 per cent in two years, to 44,200 [British Franchise Association/ NatWest survey].

3. IT’S EMPOWERING The possibility to invest in an existing brand with an operating structure in place has tempted millions of individuals over the years to take the leap into business ownership.

The combination of a tried and tested method backed up by grassroots experience,

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together with the commitment, drive and investment of keen franchisees has proved perennial. What better way to launch into a business than with the support of a franchisor behind you?

4. IT’S REGULATED Australian franchising is heavily regulated.

That doesn’t prevent dud systems and poor operators from trading but there is legal redress if franchisors act unconscionably.

The presence of the Franchising Code of Conduct also provides a framework for both franchisors and franchisees to work for the benefit of both.

5. ITALLSUITS AGES Buying a franchise is age, gender and experience friendly. Whether you are ready to avoid retirement and take on a new challenge, you have corporate experience to bring to the field, you are looking for a fresh start after redundancy in manufacturing, you want to fulfil your ambition of being a business owner before you hit 40, you want to secure a future for your family, or you’re young, inexperienced but hungry to make your mark, franchising can work for you. 

GLOSSARY

LEARNING THE

BUZZWORDS

Like any area of endeavour, the franchise sector has its own particular terminology that new franchisees need to understand.

ACCREDITATION: a banking

loan scheme that provides franchisees with some of the finance they may need when buying the franchise. It is based on a bank’s understanding of the brand and its business methods. While this funding option is popular, it is not common across the sector.

ASSIGNMENT: when a franchisee sells their business to a new franchisee, it is referred to as assignment. It is common for the franchisor to retain the right to interview and accept or reject any proposed buyer.

The franchisor may also have the right to buy back the franchise. The vendor franchisee can set the value of the franchise.

BUSINESS-FORMAT FRANCHISE: a business

model with four criteria – a franchise agreement, a trademark or symbol, payment of a fee, and a system or marketing plan.

A franchise business falls under the jurisdiction of the Franchising Code of Conduct and franchisors have certain obligations to fulfil.

COMPANY-OWNED UNITS:

locations run by the franchisor rather than a franchisee.

CONVERSION: an existing

independent business that joins a franchise network.

DISCLOSURE DOCUMENT: this

document provides information about a franchise system, the franchisor and the franchised business. It must be supplied to a prospective franchisee in accordance with the Franchising Code of Conduct.

DUE DILIGENCE: the process of conducting in-depth research on a business before purchase.

FIELD MANAGER: an individual tasked with managing a group of franchisees, with a focus on relationships, brand alignment, and sales and profit. This role might also be called business development manager or area manager.

FIXED SERVICE FEE:

franchisees may pay their franchisor a weekly or monthly fixed-amount payment, or a service fee calculated as a percentage of turnover

(above a minimum payment).

FRANCHISE AGREEMENT:

this is the legally binding business between the franchisor and the franchisee.

FRANCHISEE: an individual

who runs a franchised business using the intellectual property of the franchisor.

FRANCHISEE ADVISORY COUNCIL: a structure for

franchisors to seek and receive feedback from their franchisees. Participating franchisees may be elected or chosen by the franchisor.

FRANCHISE FEE: an up-front cost paid to the franchisor. It covers the use of the brand name and business system.

FRANCHISING CODE OF CONDUCT: a mandatory

code that governs franchising in Australia. It is designed to guide the behaviour of franchisors and provide certain protections to franchisees. It is administered through the Australian Competition and Consumer Commission (ACCC).

FRANCHISE TERM: this

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GLOSSARY

is the period granted for trading under the franchise agreement. Most franchise terms are on a renewable three or five year term but they can vary from one year to perpetuity. Franchisors often refer to a term with two options to renew as 5 + 5 + 5, for instance.

FRANCHISOR: the franchisor

grants permission to the franchisee to conduct business using its intellectual property, brand name, working methods and marketing.

GREENFIELD SITE: a

brand new site.

GOODWILL: this is a

calculation of the value of trade in an existing business that is likely to continue and benefit the incoming business owner.

INFORMATION STATEMENT:

this is a two-page standard document that outlines what franchise buyers need to know about franchising.

INTELLECTUAL PROPERTY:

this term refers to the trademarks, copyright, know-how, trade secrets, designs, patents, branding, operational manuals, methodologies and/ or recipes franchisors license to franchisees.

LICENSE: the right to use

the same as a franchise.

LOCAL AREA MARKETING:

often abbreviated to LAM, this is marketing the franchisee is responsible in their territory or designated marketing area.

MARKETING & ADVERTISING LEVY: a regular flat or

percentage-based-fee paid into a centralised advertising or marketing fund.

ROYALTY: fee paid by the

franchisee to the franchisor for the ongoing use of the brand and systems, management and technical support.

It may be a flat fee or a percentage of sales or profit.

franchisee who is responsible for a large territory, appointing other franchisees within the territory with direct agreements, and ensuring that the franchisor’s systems and methods are applied.

TERMINATION: the ending of the franchise contract between franchisee and franchisor, usually for breach of contract.

Some franchise agreements allow the franchisor to terminate the agreement even if the franchisee has not breached the agreement.

MULTI-UNIT FRANCHISEE:

TERRITORY: is the area

MASTER FRANCHISEE: a

a franchisee who has been granted the rights to run more than one franchise outlet. Not every franchise system allows for franchisees to be multiple operators.

OPERATIONS MANUAL:

the franchisee’s guide to operating the franchise business. The franchisor may produce several manuals for different areas of the business, and should regularly update the information.

REGIONAL FRANCHISEE:

intellectual property in business, such as sales rights in a territory, manufacturing technology or access to a trademark. A license is not

for a further term. This process is bound by the Franchising Code of Conduct. There is no automatic right of renewal.

similar to master franchisees, regional franchisees operate a large territory and appoints franchisees within the area.

RENEWAL: once a franchise

term nears its end, franchisees may or may not be given a right to renew their agreement

assigned to franchisees for their business. Territories can be exclusive or nonexclusive.

TOTAL INVESTMENT: the total

amount of money a franchisee requires to set up in business.

This includes the franchise fee, working capital and any equipment purchases required.

TURNKEY FRANCHISE: a

franchise package that includes all the equipment, information and systems required for a franchisee to open up the business and start trading.

WORKING CAPITAL: the funds required by any business to pay its costs before it starts making a profit, and as ongoing cash flow to counter any dips in business activity.

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CHECKLIST

CHECKLIST

30

THINGS TO CHECK BEFORE YOU INVEST GET SET PRIOR TO YOUR PURCHASE WITH OUR EASY CHECKLIST. JUST TICK OFF THE MUST-DO ITEMS.

Are you confident in the franchisor?

Have you worked out your operating costs?

What are the franchisee and franchisor obligations?

Have you seen a disclosure document?

Do you know the term of the agreement?

What training is available and who pays for it?

Is the franchisor compliant with the Franchising Code of Conduct?

Do you need a permit or license to operate the business?

Who owns the intellectual property and what is licensed to the franchisee?

Have you run a credit check on the franchisor?

Is the business operating from fixed or mobile premises?

What marketing will the franchisor implement?

Does the franchisor have a history of litigation? Are there any cases coming up?

Have you checked the lease? Is there a right to renew?

What marketing is your responsibility?

If you are buying an existing business, have you seen current financial statements (balance sheets, profit and loss, tax returns)?

Does the length of the lease match the franchise term?

What is the dispute resolution process?

Have you evaluated the financial returns?

What are the store fit-out costs?

Do you know what it is like to be a franchisee?

If you are buying a greenfield (brand new) site, do you have sales and profit examples and know the method behind the calculations?

Are you working within a territory? If so is the area exclusive?

Do you have an exit plan?

Do you know all the expenses franchisees are required to pay?

Are you restricted in your product purchase?

Have you spoken to former and current franchisees about the business?

What royalties are there and how are they calculated?

Are you required to reach a minimum performance level?

What restrictions are there on the franchisee and guarantor operating a similar business?

JAN / FEB 2017 | 112 | WWW.FRANCHISEBUSINESS.COM.AU

RESOURCES

DIRECTORY

ASIA-PACIFIC CENTRE FOR FRANCHISING EXCELLENCE

organisation or anyone involved in the franchise industry including franchisees.

A pre-entry franchise education program is available for free and online through this centre. Funded by the ACCC this course attempts to help franchisees understand the process of due diligence and have realistic expectations of what it means to be a franchisee.

Visit: WWW.FRANCHISE.ORG.AU

The Centre was launched by Griffith University in 2008 and undertakes research on franchising best practice. This research helps inform policy and team members regularly engage with government bodies and franchise associations across the Asia-Pacific.

FRANdata is the home of the Australian Franchise Registry which identifies franchise brands that have up-to-date franchise agreements and disclosure documents, and which have confirmed with the Registry their compliance with the Franchising Code of Conduct.

FRANdata also provides reports on the franchising sector.

Visit: WWW.FRANCHISE.EDU.AU

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION (ACCC) The ACCC is an independent Commonwealth statutory authority which regulates the mandatory Franchising Code of Conduct (Code) and can investigate alleged breaches of the Code.

The ACCC is responsible for enforcing the Competition and Consumer Act 2010 as well as legislation, promoting competition, fair trading and regulating national infrastructure.

Its role is to protect, strengthen and improve the way competition works in Australian markets and industries.

Visit: WWW.ACCC.GOV.AU

BUSINESS.GOV.AU This website is an online government resource for the Australian business community which gives the public access to government information, forms and services for all things business. It is aimed at assisting individuals or a group of people to plan, start and grow their business.

New business owners can access the advice finder, events calendar, grants and assistance finder, a directory of government and business associations, planning templates, business videos, and business checklists.

Business topics include emergency management and recovery, finance, recruitment, environmental management, fair trading, taxation, online business, franchising, importing and exporting, intellectual property and training.

Visit: WWW.BUSINESS.GOV.AU

FRANCHISE COUNCIL OF AUSTRALIA The FCA is the main body for representing franchisees, franchisors and service providers in the $146bn franchising sector in Australia.

Becoming a member of the FCA is a voluntary and is available for any

FRANDATA

Well established in the US since 1989, the business was established in Australia in 2013 to help the franchise sector address key strategic challenges and take advantage of opportunities available to qualifying brands.

Visit: WWW.FRANDATA.COM.AU

THE FAIR WORK COMMISSION Fair Work Commission (the Commission, previously called Fair Work Australia) and the Fair Work Ombudsman (FWO) are independent government organisations that regulate Australia’s workplace relations system but have different roles.

The Commission is the independent national workplace relations tribunal. It is responsible for maintaining a safety net of minimum wages and employment conditions, as well as a range of other workplace functions and regulation.

The FWO enforces compliance with the Fair Work Act, related legislation, awards and registered agreements. It also helps employers and employees by providing advice and education on pay rates and workplace conditions.

Visit: WWW.FAIRWORK.COM.AU

FRANCHISEBUSINESS.COM.AU This is the online arm of the Inside Franchise Business publication. Both platforms are focused on providing essential advice and information for anyone looking to invest in a franchise. The website provides short and snappy business tips and news, video interviews, industry commentary and market reports.

FranchiseBusiness.com.au is also the official directory of the FCA and lists franchising opportunities available in Australia and New Zealand.

Potential franchisees looking to move into the franchising sphere can explore opportunities that currently exist in the market and enquire about the franchisor or brand.

Users also have access to franchise consultants and advisors who can assist prospective or existing franchisees and franchisors with legal, financial educational and training, IT and other services.

Visit: WWW.FRANCHISEBUSINESS.COM.AU

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Phone: 1300 287 669 Fax: 1300 795 287 Contact: Steve Wren steve@ats.com.au www.appliancetaggingservices.com.au

Phone: +61 8 8267 2144 Contact: Andrew aphillips@focalpointintl.com www.focalpointintl.com

Start up costs from: $51,500 + GST

Start up costs from: $59,950 + GST

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

ATS are Australia-wide specialists in Electrical Testing and Tagging in accordance with AS/NZS 3760:2010. Providing expert technical, admin, business and sales support, access to our National client base and comprehensive on and off-site training, ATS are committed to helping its 50 franchisees grow profitable and successful businesses.

No prior electrical experience is required - just a passion for safety and a commitment to growing your business. With low entry fees and minimal franchisee administration, an ATS franchise may just be the opportunity for you.

Phone: 1300 99 55 12 Mobile: 0408 226 841 Contact: Jane Lombard franchise@buyaustralianproperties.com.au www.buyaustralianproperties.com.au Start up costs from: $100K to $200K + GST PROFILE: Buy Australian Properties is the first professional property investment Franchised Business operating in Australia that is a fully accredited member of the FCA (Franchise Council of Australia) and adheres to their code of conduct.

We assist clients from all over Australia find and purchase suitable property investment products that suit their needs and wants through our “Unique 4 Step Client Engagement Process” that is based on “Investing with Integrity”. We are a company that is solely focussed on what our clients’ want.

We are a full-service company that sources and provides property investors with quality brand new house and land packages, townhouses, units, row houses, duplexes, dual occupancies and apartments (Boutique and High Rise) for traditional and SMSF buyers.

Phone: 1800 243 637 Fax: (02) 4587 8733 Contact: Alan Biddle alanbiddle@chemdry.com.au www.chemdry.com.au Start up costs from $39,950 + GST

PROFILE: Listing Profile The name Brian Tracy is synonymous with personal and professional success. Our excellent reputation and highly-regarded programs are unrivalled and will give you brand credibility, prestige and trust in your business community.

FocalPoint is the franchise arm of Brian Tracy Global. We are searching for high-calibre individuals who are self-motivated thinkers, looking for a business opportunity beyond the generic franchise. If you are an innovative leader with a knack for business and you want to build a solid financial future, take the next step and find about more about the FocalPoint franchise.

Phone: 1300 659 676 Fax: 1300 659 675 Contact: Dan Toms customerservice@cashflowit.com.au www.cashflowit.com.au PROFILE: Cashflow It are the franchise finance experts. With competitive rates and flexible terms from 12 months to 5 years, Cashflow It can provide the funding that franchisors and franchisees need today. We offer flexible rental solutions, traditional leasing and business loans tailored to your requirements.

What can we Fund - New equipment / Used equipment / Fit-outs / Store refurbishments / Re-financing from other lenders / Buying an existing franchise / National equipment roll-outs Franchise Accreditation - If you belong to a Cashflow It Accredited Franchise system, you can enjoy pre-approval and other exclusive benefits.

Phone: 03 9508 4465 Fax: 03 9508 4499 Contact: Sally Nathan Sally.Nathan@retailzoo.com.au www.cibo.com.au

PROFILE: Chem-Dry is Australia’s largest and most successful carpet and upholstery cleaning franchise. Established in 1986 as a healthy and green carpet cleaning alternative, today Chem-Dry cleans more carpet and surfaces than any other company.

Using the company’s patented cleaning solutions and over 35 years of experience, our franchise partners are able to build successful businesses by making their customers’ homes and workplaces cleaner and healthier.

Our franchise partners are passionate about providing their customers with the cleanest and healthiest homes.

A Chem-Dry franchise is not just about residential and commercial carpet cleaning.

Our franchise partners also clean upholstery, leather, tiles and grout, and are specialists in water damage restoration.

Start up costs: $220k - $300k + GST (Hole in the Wall model) $400k - $500k + GST (Kiosk model) $450k - $600k + GST (Street site location) PROFILE: CIBO Espresso was born from a passion to share the simple pleasures of the Italian lifestyle - wonderful coffee and quality food in a modern, stylish bar setting.

Share an “Italian moment” whenever you choose, just by stepping through the door.

We use 100 percent Premium Arabica coffee beans, roasted and blended to our own special recipe. Our baristas are trained to ensure a great shot every time.

Adelaide has always had a passion for really good coffee and after identifying a gap in the market, the first ‘CIBO Espresso Bar’ opened in Rundle Street in 2000. It was such a hit, that the phenomenon has expanded across the country fast and is continuing to grow Australia-wide!

Phone: 0421 644 661 Fax: 07 5591 9021 Contact: John Stanton rfga@rfg.com.au www.thecoffeeguy.net.au

Phone: 07 3869 4103 Contact: Kerry Jeffs info@c9studio.com.au www.c9studio.com.au Start up costs from: Approx. $100K

PROFILE: Cloud 9 is a completely new concept in the health and fitness space. Each club is a boutique, private environment designed for those of us that are intimidated by the more traditional gym environment.

Exclusively offering small group classes booked by members through their cloud 9 app.

Start up costs: $55,000 - $65,000 PROFILE: The Coffee Guy is Australia’s newest and most exciting mobile coffee franchise.

Founded in 2006 in Auckland, NZ, The Coffee Guy mobile coffee franchise has grown into a successful brand with a presence all over New Zealand. The first Australian van launched in Yatala, Queensland successfully in May 2013.

Owning a Cloud 9 is a rewarding, feel good business ideal for someone looking for something new and dynamic in the fitness industry.

Small running costs due to the relatively small footprint compared to standard gyms and functional gyms.

JAN / FEB 2017 | 115 | WWW.FRANCHISEBUSINESS.COM.AU

A-Z LISTINGS

A-Z LISTINGS

Phone: 08 9321 5844 Fax: 08 9321 5855 Contact: Head Office info@cxpresso.com.au www.cxpresso.com.au

Phone: 1300 720 622 Contact: Rian Bell supply@constructionsupplyservice.com.au

Start up costs: Entry from $300K inclusive of fees PROFILE: Construction Supply & Service (CSS) was established in 2003 with a view to providing a one stop solution for businesses in the QSR & restaurant industry.

We can locate, design, build, equip and maintain your business. With 24 hour a day on call service techs we can make sure you are always operational. With over 500 builds completed we have the expertise to ensure that it is done right the first time. From custom one of a kind build and equipment supply through to franchisee stores we have the team and contacts to take care of all your needs.

PROFILE: CXpresso, an extension of sister brand Croissant Express, specialises in the delivery of delicious sit down or grab and go options. We cater to the busy morning commuter, the lunch time crowd and anyone looking for a delicious treat or refreshing beverage. There are few experiences more satisfying than growing your own business, especially with the experience of a strong brand, with clearly defined objectives and the support to achieve them. Become your own boss with new and existing store opportunities available Australia wide.

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Phone: 1300 131 888 Contact: Julie Mitchell Franchise.Recruitment@dominos.com.au www.dominosfranchise.com.au

Phone: 03 5975 8614 Contact: Sal El-Houli franchising@famousfish.com.au www.famousfish.com.au

Start up costs: Initial investment $250k PROFILE: Domino’s Pizza Enterprises Ltd (Domino’s) is the largest pizza chain in Australia in terms of both network store numbers and network sales. Domino’s Pizza Enterprises now extends across seven countries, with more than 2000 stores and is the leading international Domino’s franchise.

As a Domino’s franchisee you are a part of a like-minded community of food loving entrepreneurs who are passionate about delivering great service, amazing food and having fun while doing it.

Our Franchising system provides a solid foundation for entrepreneurs to think big and grow with us on our mission to ‘Sell more pizzas, have more fun!’.

Start up costs: Minimum $200,000 (Dependent on Site Conditions & Fitout Contributions) PROFILE: The Costi family have been retailers of premium-quality seafood since 1958. Our sumptuous menu remains true to its heritage of providing good old fashioned fish & chips, whilst also being continuously refined over the years to maintain a modern touch that is relevant to the ever changing food landscape. With seafood consumption in Australia having increased by 27% per capita since 1997 and remaining the #1 take-away food item sold by independent take-away shops, and with no multi-unit, integrated seafood operations currently in operation, this represents an exciting opportunity for you to capitalize on this significant gap in the market.

Phone: 03 5975 8614 Contact: Sal El-Houli franchising@famousfish.com.au www.famousfish.com.au

Start up costs: Minimum $200,000 (Dependent on Site Conditions & Fitout Contributions)

PROFILE: The Costi family have been retailers of premium-quality seafood since 1958. Our sumptuous menu remains true to its heritage of providing good old fashioned fish & chips, whilst also being continuously refined over the years to maintain a modern touch that is relevant to the ever changing food landscape. With seafood consumption in Australia having increased by 27% per capita since 1997 and remaining the #1 take-away food item sold by independent take-away shops, and with no multi-unit, integrated seafood operations currently in operation, this represents an exciting opportunity for you to capitalize on this significant gap in the market.

Phone: 03 9336 3200 Fax: 03 9336 3266 Contact: Peter Collins franchising@fergusonplarre.com.au www.fergusonplarre.com.au

Phone: 1300 852 556 or 0438 801 575 Contact: Andrew Roberts Andrew.roberts@fifocapital.com.au www.fifocapital.com.au Start up costs: $49,500

Start up costs: $250,000 - $300,000 PROFILE: Ferguson Plarre Bakehouses has always been and still is a family owned and operated business celebrating its 115 year anniversary in 2016. The fourth generation of the Plarre family still actively own and manage the day to day running of the business from baking through to retail shop design, operations and bakery franchising. The family continue to embrace their forefather’s commitment to quality products, service and innovation.

PROFILE: Fifo Capital provides cash flow assistance to small businesses whilst giving a great lifestyle, excellent returns and an enviable work/life balance to its franchisees. No experience necessary as full training and ongoing support is provided.

With no Royalty or Marketing Fees, fresh product delivered daily to the store and no baking required, the business is perfect for people who can drive sales and install this trait into their own team.

• • • •

Phone: 02 8845 0100 Fax: 02 8845 0199 Contact: Franchise Development Manager franchise@gelatissimo.com.au www.gelatissimo.com.au Start up costs from: $300,000 PROFILE: Australia’s leading gelato franchise is looking for outstanding franchisees.

Prior food experience is not necessary however franchisees must have passion for the system and brand, leadership skills, and enthusiasm for delivering quality products through excellent customer service.

Multi award winning Gelatissimo provides full training and on-going support from dedicated operational, marketing and development teams enabling them to produce artisan gelato fresh in store using a simple and proven system.

Having grown by over 35% this year Fifo Capital is making a huge impact right across the country for a variety of reasons. Below are some of the benefits our partners enjoy as members of the Fifo family.

ROI of 50+% annualised* Backed by insurance Part-time potential, Work from home (if you wish),

• Backed by one of the biggest and most successful finance franchisors in the country.

• Multiple income streams

Phone: 03 9234 2200 Fax: 03 9234 2266 Contact: Peter Fiasco franchising@hairhousewarehouse.com.au Hairhousefranchising.com.au Start up costs from: $350k +

PROFILE: With over 20 years of experience in the hair and beauty industry, Hairhouse Warehouse is one of Australia’s leading retail franchise brands.

Hairhouse Warehouse’s vision is clear and simple. Offer quality products at a reasonable price, whilst providing exceptional customer service. This mission is clearly on display in each and every one of our locations by simply looking at our franchisees and the teams they work with.

As a franchisee, no hair or beauty certification is required - just a passion for success.

As Hairhouse Warehouse continues to dominate the hair and beauty industry in Australia, the brand and franchisees are seeing amazing results. To continue our brand domination Hairhouse Warehouse is planning to expand to over 180 stores over the next three years.

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Phone: 0412 692 052 Contact: David Wilkinson sales.au@inxpress.com inxpress.com inxpress.com.au/franchising

Phone: 131 546 Contact: Andrew Parke getstarted@jimsantennas.com.au www.jimsantennas.com.au

Start up costs from: $74,950 +GST

Start up costs: Starting from $59,000

PROFILE: InXpress provides a revolutionary concept delivering customers with express freight advantages to gain a competitive edge in the marketplace. InXpress is an authorised sales partner for the world class courier company, DHL. Domestically, InXpress partners with companies such as Toll and TNT to offer a complete suite of courier and freight solutions, providing increased value and service, saving valuable time and money.

Operating in 12 countries with over 350 franchisees globally, InXpress is now accepting • Low entry costs • Guaranteed income* • No inventory/warehousing

A-Z LISTINGS

PROFILE: Jim’s Antennas is Australia’s most successful antenna and audio visual company.

Our franchisees specialise in a variety of audio visual services, including antenna installations and repairs, TV wall mounting, data points, home theatre, MATV systems, and national contracts such as wireless NBN. No experience is necessary as full training and ongoing support is provided.

Jim’s Antennas currently have both Franchise and Master Franchise Opportunities available throughout Australia.

• Minimal employee base • High income potential • Ongoing training and support

For more information about becoming an InXpress franchisee contact us now. *conditions apply

Phone: 02 9527 5444 0439 130 499 Contact: Luke Manning Luke@justcuts.com Justcuts.com

Phone: 0404 755 759 Contact: Sales sales@lavacoffee.com.au lavacoffee.com.au

Start up costs: $85,000 - $120,000 (Kiosk) $160,000 - $240,000 (Salon)

Start up costs: $95,000

Our latest innovation, the Just Cuts™ Kiosk Salon, also allows you to buy into a new lifestyle from just $85,000. Designed to function as a smaller, compact, satellite site within high traffic shopping centres, they’re a great opportunity for those looking to take the first step into franchising.

Turn your dreams into reality with Just Cuts - Visit www.justcuts.com.au/franchising ™

PROFILE: Warming to the dream idea of owning a HOT new Lava Coffee franchise?

Our awesome Coffee ensures that we have both very happy customers and franchise partners. Our Franchise Partners are able to enjoy a great business, whilst avoiding the high set up costs associated with other leading brands.

Our concept includes the latest in design innovation. With modern and functional retail kiosks, placed in appealing locations, our winning formula means our turnkey franchise package and ongoing costs are a fraction of our competitors, with no compromises on quality.

Discover the substance behind our brand and enquire about joining a winning team and owning your dream coffee franchise today.

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PROFILE: You don’t have to be a hairdresser to own a Just Cuts™. We truly believe that the success of the brand comes down to our network of Franchise Owners - that’s why we make things easy, convenient and simple for you. When you open your very own Just Cuts™, you will enjoy the benefits of fixed franchising fees, flexible finance options and not only will we guide you through every step of opening your salon, but also provide you with ongoing business, operational and marketing support.

We’ve grown to be the largest hairdressing company in the Southern Hemisphere and perform over 90,000 Style Cuts™ cuts for our Clients each week!

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Phone: 1800 068 111 Fax: (07) 3100 7888 Contact: Aroha Leigh Email: opportunities@lenards.com.au Website: http://franchise.lenards.com.au/

A-Z LISTINGS

Start up costs: $350k-$400k turnkey PROFILE: Lenard’s Chicken is Australia’s favourite chicken shop and a leading brand among Australia’s fresh food retailers. Our unique concept of value-adding amazing ingredients and flavours to fresh chicken has established our offer as the leader in the marketplace.

Since the first store opened in Queensland, Lenard’s has sold more than 500 million chickens, served more than 200 million customers and injected more than $2 billion into the Australian poultry market. Today, Lenard’s employs more than 2,000 staff in nearly 300 franchises, supermarkets and butchers across Australia and remains one of the great success stories of Australian retailing.

Phone: 03 9604 9400 Fax: 03 9600 3313 rxt@marshmaher.com.au mim@marshmaher.com.au www.marshmaher.com.au PROFILE: Robert Toth and Marianne Marchesi Well recognised and published franchise specialists with over 30 years combined industry knowledge and experience.

Providing advice in: 1. International Franchisors and Franchising.

2. Master Franchising.

3. Dispute Resolutions – solutions and strategies.

4.

5.

6.

7.

8.

Franchisee Advice and fixed fee reports.

Sale/ Purchase of franchise systems.

IP/ Trademark advice.

Company structures and tax advice.

ACCC and Consumer Law advice.

We provide AZ-MBE.pdf clients fixed 1fees based on1:30:37 the scope 11/29/2016 AM of work.

Phone: 0457 677 986 Contact: Paul Kasper franchising@mbe.com.au

Phone: 0457 766 919 Contact: Ian Skeoch Ian.Skeoch@MassageEnvy.com.au www.MassageEnvyFranchise.com.au

Start up costs from: $135K www.mbebusinessfranchise.com.au PROFILE:

PROFILE: Having experienced phenomenal success and growth in the USA, Massage Envy is now set to take Australia by storm with it’s unique membership based business model.

Looking for more than just a print and design company?

In the 14 years since it’s establishment in the USA, the Massage Envy network covers over 1,100 locations, providing 20 million massage services a year, to more than 1.65 million members.

Our Owners enjoy a great work/life balance with your Centre opening hours of 8am to 5:30pm Monday through Friday – closed for Public Holidays. As Business Services Franchise, there is no spoilage and we also partner with our training program – no experience is necessary.

With it’s expanding membership base and recurring revenue model, Massage Envy provides unlimited growth for franchisees.

Be one of the first to join the next franchise revolution in Australia.

Mail Boxes Etc. is a part of the world’s largest Business Services franchise system; with over 1,600 MBE Centres world-wide and growing. We offer a multi-income stream of printing, shipping and mailing services, just to name a few.

Our National Marketing Program will help you identify and find your clients, and our National Supplier Agreements, will ensure you’re always purchasing as cost effectively as possible.

With MBE, it’s an investment in your future.

Phone: 1300 650 330 Contact: Tzuri Avila franchising@mortgagechoice.com.au www.mortgagechoice.com.au/join-mortgagechoice.aspx

Phone: +613 8526 4488 Fax: +613 9645 1859 Contact: Daphne Chin franchise@nenechicken.com.au www. nenechicken.com.au

Start up costs from: $14,815 + GST

Start up costs from: $500,000 +

PROFILE: Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs.

PROFILE: Nene chicken is one of the top Korean fried chicken chains with over 1,000 outlets in South Korea.

Established in 1992, Mortgage Choice was originally established to help Australians improve their financial situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.

NeNe Chicken flew into Australia in 2015 and in 18 months has rapidly expanded to all over Australia.

A-Z Since that time, the company has grown and developed into a fully fledged financial services provider.

Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset finance, deposit bonds, and risk and general insurance.

L I S T I N GS

FOR A-Z LISTINGS ENQUIRIES CONTACT:

CONTACT SENIOR ACCOUNT MANAGER CHARLOTTE REDFERN ON 02 8224 8373 CHARLOTTE.REDFERN@OCTOMEDIA.COM.AU

We pride ourselves on delivering the NeNe experience with uniquely marinated and batter coated fried chicken and range of authentic NeNe sauces.

With Nene Chicken, you can get extensive franchisee owner support and training.

As well as, various marketing activities throughout local and national.

Nene chicken invites you to start your own successful story by becoming a franchisee. Visit our website for further information.

Phone: 0413 564 565 Fax: Contact: Marc franchise@nirvanabeauty.com.au www.nirvanabeauty.com.au Start up costs from: $24,342 + GST PROFILE: Having conquered some of the latest beauty treatments and technologies, Nirvana Beauty Laser Clinics presents a huge investment opportunity for people wishing to enter an industry with enormous potential.

As a franchise owner with Nirvana Beauty Laser Clinics, you will experience the satisfaction of working in an exciting and on-trend industry. Every day you will reap the fruits of your own input by delivering results-driven treatments to many satisfied clients. Enjoy working with state-of-the art equipment, a great work-life balance, and a personalised support network.

What are you waiting for? Contact us today and join in our success.

JAN / FEB 2017 | 118 | WWW.FRANCHISEBUSINESS.COM.AU

Phone: 02 8905 8401 Contact: Gary Glen Gary.glen@qsrh.com.au www.oporto.com.au

Phone: 03 9645 4667 Fax: 03 9645 4747 Contact: Jian franchise@papparich.net.au www.papparich.net.au

From approx.: $500K Start up costs from: $600K to $1.5M, depending on model/size

PROFILE: Oporto was Australia’s first Portuguese-style chicken restaurant and is renowned for its fresh-not-frozen, grilled-not-fried delicious tender chicken and fresh vibrant chilli sauce. From tantalising the taste buds of local Bondi residents with its first store in 1986, Oporto now satisfies over 13 million customers per year across 150 stores, and that number is forever growing. Oporto® has come a long way over the last 30 years, however it has maintained the heritage of high quality, great tasting, authentic fresh-grilled chicken and burgers. With new store fitouts, a new customer rewards program and its amazing food, Oporto® is an exciting business opportunity.

PROFILE: Founded in Kuala Lumpur in 2005, PappaRich is a chain of cafés and restaurants in Singapore, China, South Korea, USA, Australia and New Zealand that serves a plethora of authentic Malaysian delights. Each eatery is fitted out with a modern, earthy-coloured interior and an extensive kitchen with hardworking chefs ready to create your meal. Groupies can enjoy a range of roti canai, satay, rice, noodle, fish, dim sum or vegetarian dishes, as well as traditional Malaysian drinks including kopi, teh tarik, and lemon tea.

Phone: 1800 245 447 Fax: 07 3173 7399 Contact: Mike Geddes joinourteam@poolwerx.com.au www.poolwerx.com.au/franchising

Phone: 07 3456 4255 Fax: 07 3456 4299 Contact: Phil Hill phil.hill@propertyclub.com.au www.propertyclub.com.au

Start up costs from: $95,000 + GST + vehicle PROFILE: Poolwerx is FCA’s 2016 Franchisor of the Year and our consumer research continues to place us as arguably the number one brand in the pool servicing and retail category.

As a Poolwerx Franchise Partner, you can start small or jump right in. Create your unique business career path with infinite potential - all backed by 25 years’ experience and outstanding support, marketing and business development systems.

Start up costs from: $1,000 (Try Before You Buy)

PROFILE: Property Club was established in 1994 as The Investors Club, and has grown to become one of Australia’s most successful property investing organisations.

Join us as a man and van, progress to multivans, a retail store and vans and then into multi-stores.

By educating and assisting members to purchase carefully selected investment properties in Australia, Property Club has worked together with investors and property vendors with over 20,000 properties purchased to date. Success of the Club is evident through the 5,000+ members of our Property Millionaires Club.

Whatever your journey, we will help you realise your vision. Our one focus is to create a profitable partnership. All you need to do is match your energy and enthusiasm with Australia’s award-winning franchise system.

Property Club now offers an opportunity to join our existing 15 Branches.

Full training, supported by a dedicated team of head office staff and licensed property researchers will be provided to successful applicants.

For more information, visit www.poolwerx.com.au/franchising.

Phone: 1800 809 913 Fax: 03 8699 1555 Contact: Anna Goncalves franchising@ questapartments.com.au www.questfranchise.com.au Start up costs: $750,000 upwards

Phone: 1300 4 REDCAT (1300 473 322) hello@redcat.com.au www.redcat.com.au

PROFILE: Quest Apartment Hotels is the largest and fastest growing apartment hotel operator in Australasia, with a network of 150 franchised properties across Australia, New Zealand and Fiji.

PROFILE: Redcat is an Australian POS provider, supplying end-to-end point of sale, accounting and business management solutions that give users total control of their business. Our customers include some of Australia’s best known franchises, restaurants and cafes.

For over 25 years, Quest has provided convenient locations, reliable standards and flexible living conditions for extended stay corporate travellers among Australia’s top 500 companies.

Redcat Polygon is an integrated software and hardware solution that manages sales, staff, stock, payroll, accounts, inventory, and customer loyalty. Polygon includes web based multi-site reporting, to provide a complete business management system.

Quest is now one of the top 15 apartment hotel providers in the world, and widely recognised as the market leader of apartment hotel accommodation in Australia.

To become a Quest Franchisee you must be prepared to make a significant investment and commitment to the business, both personally and financially.

Phone: 02 8905 8401 Contact: Gary Glen Gary.Glen@qsrh.com.au www.redrooster.com.au Start up costs from: $600K

PROFILE: Red Rooster is Australia’s largest roast chicken quick service restaurant chain.

Since opening the first restaurant in 1972, Red Rooster has become an iconic Australian brand. There are currently 360 restaurants across Australia and this number continues to grow. The strength and scale of the network makes Red Rooster a great proposition for franchisees. In addition to its well-known and loved roast chicken and its famous chips, Red Rooster continues to invest in innovation, most recently launching a range of premium chicken burgers and wraps, as well as launching a new home delivery service across Australialocations. As one of Australia’s most recognised brands and with a well-established support network, Red Rooster offers exciting business opportunities.

A-Z Franchised groups benefit from our flexible centralised management capability, that permits multiple levels of control and reporting.

Redcat also provides integrated online ordering systems. Customers order and pay through a customer-branded app, with the order passed into Redcat Polygon. Fully audited, fully automatic.

L I S T I N GS

FOR A-Z LISTINGS ENQUIRIES CONTACT:

NATIONAL SALES & MARKETING MANAGER DAVID STRONG ON 02 8224 8370 DAVID.STRONG@OCTOMEDIA.COM.AU

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A-Z LISTINGS

A-Z LISTINGS

Phone: 07 5455 3822 Fax: 07 5455 3616 Contact: Elizabeth Sauterel franchise@safetyquip.com.au www.safetyquip.com.au

Phone: 1800 762 766 Fax: 02 9837 9199 Contact: Les Coppin les.coppin@snapon.com www.snapontools.com.au

Franchise fee: $64,000 Start up costs from: $150K to $320K plus additional working capital

Start up costs from: $50,000

PROFILE: SafetyQuip is Australia’s only franchised player in full scope Workplace Safety Supplies and services – a booming, billion dollar market.

Serving a target market of small to medium-sized businesses, a developed SafetyQuip franchise has a counter-sales base and distribution warehouse anchoring one or more mobile units, providing customers with competitive pricing yet the personal service of a local business. It’s a potent combination, with franchisees turning over up to $3.4 million pa.

The SafetyQuip system, highly developed over 20+ years, has thirteen territories currently operating across Australia. No prior experience in safety is necessary.

PROFILE: Snap-on Tools Australia & NZ is a mobile franchise operation putting high quality tools and equipment into the hands of mechanics, engineers and technicians across the country. Snap-on Tools is a wholly owned subsidiary of Snap-on Inc., a developer and manufacturer of innovative and technologically advanced tools with an established network of solid franchise operations across the globe.

After more than 25 years in the Australian market, Snap-on continues to solidly perform, providing robust financial results for its network of over 170 franchisees.

Extensive training and ongoing support is provided - no previous mechanical experience required. Snap-on offers an exclusive finance package to assist new franchisees.

Phone: 08 8376 3016 Contact: George Karamalis info@st-louis.com.au www.st-louis.com.au

Phone: 02 7200 4300 Contact: Andrew Wild andreww@sumosalad.com www.SumoSalad.com

Start up costs from: $350,000

Start up costs: From $200k

PROFILE: St. Louis franchisees will find comfort in the support and guidance they receive once they become part of the St. Louis family and take the first steps into owning their own business.

With full training and on-going assistance franchisees will learn the art to producing the highest quality, premium ice cream and dessert creations, and much more in store, using a simple, user-friendly model.

We are looking for franchisees who are passionate about dessert, have a love for all things sweet and decadent, and who believe in never compromising on quality.

PROFILE: Join SumoSalad, Australia’s largest and most awarded healthy fast food franchise, on our journey to make Australia a healthier place. We offer healthy, tasty food in a fun, affordable and convenient way. Our high level of standards and superior customer service enables us to continue to flourish and grow within this exhilarating industry.

With unparalleled training, continuous support and a strong, proven store concept, becoming a franchisee within SumoSalad is more than just becoming a business owner; it’s about joining a movement.

Change your lifestyle. Invest in something that warms you from the inside out.

Phone: 02 9898 8608 Contact: Chris Fitzmaurice enquiries@swimart.com.au www.swimartfranchise.com.au

Phone: 02 9037 2849 Contact: Doug Downer doug@thealternativeboard.com.au www.thealternativeboard.com.au

Start up costs from: Retail - $175,000 - $250,000 Mobile - $85,000 - $90,000 PROFILE: Swimart operates in the pool and spa industry providing owners with all their pool and spa needs from filtration equipment and chemicals to pool cleaners, accessories, spare parts and leisure products. We also provide extensive, in home services, such as pool cleaning and maintenance.

A-Z Established in 1983, Swimart has over 70 retail stores and more than 250 service vehicles across both Australia & New Zealand and is a fully owned subsidiary of Waterco Ltd, a publicly listed Australian company with operations in over eight countries around the globe. We offer both retail and mobile franchises with set up costs starting from as little as $85,000. If you’re looking for either a retail or service business that delivers solid revenues with high margins and low fees, just ask Swimart!

L I S T I N GS

FOR A-Z LISTINGS ENQUIRIES CONTACT:

CONTACT SENIOR ACCOUNT MANAGER CHARLOTTE REDFERN ON 02 8224 8373 CHARLOTTE.REDFERN@OCTOMEDIA.COM.AU

Start up costs: from $40,000 up to $95,000

PROFILE: The Alternative Board is a membership organisation of Business Owners and CEOs who meet monthly in confidential board meetings to assist each other in transforming their businesses.

The Alternative Board (TAB) exists to help business owners align their business vision with their personal vision. It exists to provide owners/CEO’s with the power to ensure that their businesses will deliver what they want out of life.

In addition to the monthly board meetings, the facilitator/coach meets with the business owner/CEO each month and works with them in a one on one coaching session focussed exclusively on their business.

Phone: 07 5591 3242 Fax: 07 5591 9021 Contact: Michael Marr Michael.marr@rfg.com.au www.rfg.com.au

PROFILE: Founded in 1989 as the owner and manager of around 50 Donut King and bb’s Café stores, and Listed on the Australian Securities Exchange (ASX) since 2006, Retail Food Group (RFG) now has a strong portfolio of world class franchise systems with an extensive global footprint.

RFG is the owner, developer and manager of Donut King, Brumby’s Bakery, Michel’s Patisserie Cafe, Gloria Jean’s Coffees, It’s A Grind, The Coffee Guy, Café2U, Pizza Capers Gourmet Kitchen and Crust Gourmet Pizza Bar franchise systems.

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AZ-The Cheesecake Shop.pdf 1 11/8/2016 10:54:58 AM

Phone: 029723 97231011 1011 Phone: 02 02 9723 1011 Phone: Fax: 029727 97276771 6771 Fax:02 02 9727 Fax: Contact: Nick Nick Avgerinos Contact: NickAvgerinos Avgerinos Contact: Email: franchise@cheesecake.com.au franchise@cheesecake.com.au franchise@cheesecake.com.au Website: www.cheesecake.com.au www.cheesecake.com.au www.cheesecake.com.au Start up costs costs from: $200,000 --$800,000 Start $1million Startup up costsfrom: from:$200,000 $200,000 - $800,000

Phone: 0412 054 823 Fax: 07 5591 9021 Contact: Paul Whitney paul@thefranchiseshow.com.au www.thefranchiseshow.com.au

PROFILE:

PROFILE: PROFILE: The Cheesecake Shop opened in 1991 and has developed into an Australian TheCheesecake Cheesecake Shop Shop opened 1991 into anan Australian The openedofininalmost 1991and andhas hasdeveloped developed into Australian favourite with a massive network 200 stores across Australasia. favourite with with aa massive massive network of almost 200 stores across Australasia. favourite network of almost 200 stores across Australasia.

Our award winning system makes for one of the simplest businesses to operate.

Our award winning system makes for one of the simplest businesses to operate.

Our award winning system makes for oneyou of need the simplest businesses operate.

Our systems guide you on how many cakes to produce each weektoand Our much systems guide you on how many cakes you need to produce each week and how of each ingredient to order.

Our systems guide you on how many cakes you need to produce each week and how much of each ingredient to order. how muchare of baked each ingredient order. recipes. You don’t need to be a chef or Our cakes from easy to to follow cakes are baked from easy to follow recipes. You don’t need to be a chef or aOur baker, its so Our cakes areeasy! baked from easy to follow recipes. You don’t need to be a chef or a baker, its so easy! loveitstoso bake cakes for the kids then here is your chance to turn your aIf you baker, easy!

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PROFILE: Regular national TV finance commentator and consumer advocate Effie Zahos is the host of a new business program, The Franchise Show, which will air Australia-wide on The Seven Network in February 2017. The weekly half-hour program will focus on the positives, the pitfalls and the personalities of franchising, profiling those at the forefront of Australia’s booming small business sector. With more franchise systems per capita in Australia than anywhere else in the world, Zahos believes Australia has never been more ready to embrace The Franchise Show. Contact us today if your interested in featuring your franchise on the show!

Phone: 07 3215 6050 Contact: Gen Alexander Franchising@tommyguns.com.au www.tommyguns.com.au

Phone: 0439 966 391 Contact: Wayne Stapleton info@under-wraps.com.au www.under-wraps.com.au

Start up costs: $250,000 - $500,000

Start up costs: $100,000

PROFILE: Tommy Gun’s Original Barbershops have been designed with the customer experience at centre, creating a complete destination for male grooming.

For years men’s grooming needs have been largely ignored. Getting a haircut in a salon surrounded by flowers and piles of ladies magazines…or joining the queue of guys on an uninspiring bench at the local cheap cuts. Getting their hands on the right grooming products was also a challenge, running around to multiple stores for razors, oils or waxes.

Tommy Gun’s is the new alternative that has been received with high fives and fist pumps.

Seamlessly combining the latest technology with old-world finishes, grooming services and products, all under the one accessible roof. What’s not to love?

With custom red barber chairs, an exclusive waiting lounge, arcade games and Foxtel in every mirror, the experience is relaxed, luxurious and affordable.

Phone: 0418 295 091 Contact: Luke McGrath franchising@wokme.com.au www.wokme.com.au Start up costs: $150,000 - $250,000

PROFILE: Under Wraps is a health inspired sandwich, salad + juice bar. Under Wraps offers fresh, nutritious “Real food Real Fresh” approach for breakfast, lunch, snacks and take home meals.

The sandwich + salad bar is a delicious range of wraps, sandwiches, baguettes, wholefood salads and bowls, protein pots, breakfasts and hot dishes freshly prepared with love using fresh, seasonal ingredients. A broad range of vegetarian and vegan options in integrated in the menu.

The juice bar offers a fabulous range of fresh juices, frappes and smoothies prepared with care and premium quality ingredients to give customers a glow, a protein punch, to rejuvenate, and to supercharge.

When we needAM a caffeine fix, the Under Wraps AZ-XPRESSO.pdf 1 11/9/2016 11:43:40 gourmet coffee and tea range is extensive, with a rewarding loyalty card for devotees.

Phone: 1300 655 559 Contact: Jonathan Payne joinus@xpresso.com.au www.xpresso.com.au www.facebook.com/XpressoMobileCafe Start up costs: $122,500 + GST turn-key!

PROFILE: Xpresso Mobile Cafés operate in large geographical territories nationally where

PROFILE: WOK ME is an Australian owned healthy, fast food company.

Our philosophy is to provide a Healthy - great tasting, Fresh – made to order, Fast to take home or delivered to you in store or to your home as quick as possible. Basically, top quality experience at affordable prices. We do this in what we call the most flirtatious way possible, meaning with the best customer service experience we can create.

Giving our customers an above expectations experience.

Phone: 0414 669 101 Contact: Stephen Spitz stephen.spitz@xpressodelight.com.au www.xpressodelight.com.au

light industrial precincts.

We supply premium Di Bella Coffee products – both hot and cold including frappés, energy drinks, cold press coffee drinks and bottled water. The average spend from each customer is also increased by providing lunch options such as awesome salads, gourmet wraps, sandwiches, cookies, banana breads and Ben & Jerry’s ice cream products.

Franchisees further boost their income by attending weekend community, sporting and school events which do not need to be in their usual territory.

Xpresso Mobile Café has recently won 2 awards placing it in the Top 10 Franchises in Australia in the areas of Passion and Lifestyle.

Phone: 1300 139 913 Fax: 07 5587 7223 info@zbm.com.au www.zbm.com.au

Start up costs from: $59,990 + GST

PROFILE: Invest in an Xpresso Delight franchise and seize the opportunity to profit from one of the fastest growing markets on the planet. As the number of savvy, educated coffee drinkers has boomed, the market has exploded!

This pent up demand for gourmet coffee in the workplace is very poorly met.

Each day, thousands of workers trek to the nearest café to pay as much as $4.00 for their morning and afternoon coffees.

This is the premise of Xpresso Delight - transplanting the cafe into the heart of the workplace at a fraction of the price that people pay normally.

PROFILE: Zoo Business Media is a full service supplier of innovative music, video and voice messaging solutions to hundreds of franchised businesses around Australia. We provide the latest in digital customisable in-house audio, on hold phone messaging and music-video technology through our 1800 ONHOLD and Moo Music brands.

We help you create the perfect ambience for your franchise with the latest internetdelivered music and messaging services - inclusive of public performance fees.

Whether you require great background music, or a professionally produced on-hold phone message, the team at Zoo Business Media can put a program together that will ensure your business sounds great.

Contact us on 1300 139 913 to find out more.

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A-Z LISTINGS

FINAL WORD

WHERE TO NEXT FOR THE FRANCHISE

MODEL ANDREW TERRY Professor of Business Regulation in the University of Sydney Business School, and member of the FCA Hall of Fame.

Franchising is an innovative, effective and proven strategy for business operation and expansion whose short history has been characterised by innovation – in both the application and the development of the franchise model.

I

are supplied through the franchise model but also business to business services, professional services and government services.

My engagement with the Australian franchising sector now stretches over four decades – from just a few years after McDonald’s and KFC introduced not only their distinctive fast food concepts but, and more importantly, a new way of doing business which has revolutionised the Australian retail landscape.

But it is not only the application of franchising to previously unfranchised sectors that has characterised the development of franchising – it has been the development of the model itself. The basic franchise concept is not particularly complicated – a franchisor with a proven business system licenses a franchisee to use the system, in a controlled manner, in the franchisee’s independently owned and operated business.

n relation to application franchising has long expanded beyond its fast food origins in the US in the 1950s.

In those early days the greatest excitement in franchising was watching it expand from fast food to other consumer sectors but we now know that any business that can be operated under management can be franchised and the more compelling questions are should it be franchised and how.

Because franchising is a strategy for carrying on a business it can be applied at various levels in the distribution chain - not only to retailer/ retailer transactions which account for the majority of franchise systems but also to manufacturer/wholesaler and manufacturer/ retailer and wholesaler/retailer transactions.

Australia has a rich and diverse franchise sector comprising over 1100 franchise brands. It is not only consumer goods and services which

It is an inherently practical strategy which, in the words of Martin Mendelsohn, “evolved from the solutions developed by businessmen in response to the problems with which they were confronted in their business operations”.

The history of franchising is one of innovative development as the basic franchise model is applied through a range of techniques beyond the understanding of the original founders.

Master/sub franchising, area development franchising, multiple unit franchising, and combination (co-branding) franchising all developed to accommodate commercial challenges and are driving the relentless growth of franchising.

While franchising is, in most cases, inevitable

for the small business seeking sustained expansion it is also becoming an important strategy for big business which is increasingly recognising that franchising is an intelligent method of business operation. Airlines and banks for example today use franchising for at least some parts of their operations.

Governments too are increasingly embracing franchising – if traditional government services such as post, transport, prisons can be privatised then franchising is a sensible strategy to facilitate service delivery.

Franchising is also being applied beyond its traditional commercial context.

The rapid development of social franchising – the use of the commercial franchising model to achieve social rather than for profit outcomes – has proven to be very effective as a tool for social entrepreneurship.

Any business operating through multiple outlets will exploit the power of its brand, its systems, its technology and its management expertise. Franchising provides the ingredient lacking in a company owned and managed chain - the hands-on proprietorship of the franchisee. Innovative businesses will continue to apply the franchise model in innovative ways to exploit the unique synergies franchising offers. 

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Wanted A seriously energetic success driven individual looking to go to the next level of business with an expanding company about to relaunch in the market.

Must be customer focused with a history of demonstrating initiative and excel in customer service.

High volume business.

High profit stores.

Finance available.

People focused company.

Prime regional and CBD locations.

Great opportunities now available in: BRISBANE • CANBERRA • TOWNSVILLE • SUNSHINE COAST • GOLD COAST • TOOWOOMBA Call Luke McGrath 0418 295 091

NEW STORE NOW OPEN AT WILLOWS SHOPPING CENTRE IN TOWNSVILLE

THE CHICKEN SPECIALISTS In 2016 Lenard’s Chicken embarked on an exciting new chapter in our 29 year history – the introduction of a new contemporary store design and long-awaited ready-to-eat cooked range!

Already attracting rave reviews from our customers, the premium product range is led by our delicious Free Range Roast Chickens. The new format is destined to catapult us into the market leading position we aspire to continue to own for the next 30 years.

To ensure you are part of this journey with Australia’s favourite chicken retailer, register your interest now with Aroha Leigh at opportunities@lenards.com.au or call 1800 068 111.

NEW-LOOK STORES NOW OPEN: Willows QLD, Bondi Junction NSW, Loganholme QLD, Warwick WA, Baldivis WA, Lucas VIC, Wendouree VIC, Hervey Bay QLD, The Avenues QLD

NEW-LOOK STORES OPENING SOON: Palmerston NT, Darwin CBD NT, Secret Harbour WA, Armadale WA, Harrisdale WA, Castletown QLD