Inside Franchise Business - May/June 2018

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

MAY/JUNE 2018

ISSUE 31 VOL 3

FAST AND FURIOUS The quick-fix gym trend

CAN YOU AFFORD IT? Franchise finance essentials

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MAGNIFICENT SEVEN Fundraising franchisees with big hearts

CONTENTS

REGULARS

LEADERSHIP

5 6 10 116 118 119 120 121

14 ANIMAL MAGIC

EDITORIAL GLOBAL EYE

Five franchises based on a passion for pets

INSIGHTS

INFLUENCERS CHECKLIST RESOURCES

Australia’s first Mexican chain is still going strong and cooking up more expansion plans.

40 THE RIGHT FIT

GLOSSARY TIMELINE

34 SPICING UP OUR PALETTE

18 FAMILY FORTUNES

The latest gym concept has the Fernwood Fitness stamp of approval.

Putting the spotlight on two franchise brands with family at the heart of the business.

24 POWERED FOR SUCCESS

Total Tools keeps delivering for franchisees and customers.

28 IT'S A GOAL!

A passion for early learning is matched to a love of football at Soccajoeys.

32 NEW TERRITORY FOR TILES

Retail franchise chain Beaumont Tiles plans to grow its business here and overseas.

42 COVER STORY

Franchisees with a giving streak

56 TAKE CONTROL OF YOUR LIFE

A dedicated franchising expo is a chance to find out more about the sector and discover new brands.

INDUSTRIES

FRANCHISE BASICS

58 WINGING IT

78 PASSION AND PROFITABILITY

96 STOP THE FAIL

81 CAN YOU AFFORD IT?

103 TAKING FLIGHT

A fast food favourite, chicken is delivering to Aussie consumers.

FCA chair Bruce Billson offers insights into what makes franchising work.

The costs you need to consider when you decide to buy a franchise.

84 COPING WITH COSTS

What do you know about wages, paying rent and cost of goods sold?

66 FAST AND FURIOUS

Speedy fitness solutions for time-conscious gym goers.

91 FUNDING YOUR FRANCHISE It’s likely you’ll be borrowing money to buy your franchise.

74 SAFE AND SOUND

How to find your way through financials.

Your franchise journey can be improved by data and benchmarking.

108 BUYER BEWARE

Expert advice can be a good investment.

110 KEEPING THE FAITH

Advice from the ACCC on acting in good faith in franchising.

114 5 REASONS...

Why you need to manage your numbers.

Q&A with two franchisors in the safety sector.

130 FINAL WORD

Multi-million dollar Domino’s franchisee shares financial tips.

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EDITORIAL

Making a mark While good financials drive franchising, success is about more than money Franchisees can often describe their franchise networks as “like family”, and with a commitment from everyone to maximise the brand potential and to help out those experiencing a rough patch (in business or in their personal life), it’s no wonder.

And with many of the franchised brands across Australia starting out as family-owned businesses there is an obvious sense of community.

So what’s it like to be a franchisor who runs a familybusiness? Inside Franchise Business found out from two heritage firms just what the reality is when you go to work with a relative.

Turn to page 18 to read the story.

Community is a crucial part of business for seven franchisees who are featured in this edition’s franchisee showcase. Whether it’s a young pizza franchisee looking for every opportunity to help others, a transplant patient using his passion for sport to fundraise, or an enthusiastic cafe owner making her business central to the community, there’s a spirit of giving found in these franchisees. Read how these franchisees, and our cover stars, Scott and Shae Chapman, have made their mark.

Inside Franchise Business always loves to hear about new brands - this month we’re talking about a gym model Zadi, that has the Ferwood Fitness stamp of approval. Read more on page 40.

This edition also focuses on speedy solutions in the fitness arena, looks at chicken brands operating in fast food retail, and hears about challenges and developments in the safety industry from two franchisors immersed in the sector.

Retail continues to be a popular choice for franchise investment, but what’s happening in shopping centres? Turn to page 10 to read the Insights article on the latest shopping centre predictions.

Whether or not you decide to invest in a retail, commercial or mobile franchise, finance is going to be crucial to the success of the business. This issue’s advice section, Franchise Basics, is dedicated to money matters with expert articles that can help shed light on the all-important financial aspects of buying and running a business.

Enjoy the read.

EDITOR

SENIOR ACCOUNT MANAGER

SUB-EDITOR

Marketing & sales co-ordinator

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

Louis Allen louis@octomedia.com.au

JOURNALIST

Gali Blacher P: 02 8224 8355 gali@octomedia.com.au

GENERAL MANAGER

David Strong P: 02 8224 8370 david.strong@octomedia.com.au

Charlotte Redfern P: 02 8224 8373 charlotte.redfern@octomedia.com.au

Natalie Abiharb P: 02 8224 8375 natalie.a@octomedia.com.au

GRAPHIC DESIGN

Sar a h Sarah Stowe

Editor

OCTOMedia

L10, 51-57 Pitt St. Sydney NSW 2000 PO Box R217, Royal Exchange, NSW 1225 Ph: +61 2 9901 1800 Fax: +61 2 9251 5957 www.octomedia.com.au FOR SUBSCRIPTION ENQUIRIES CALL customer service: 02 8224 8383 ISSN: 1321-408X

Rozelle Carlos rozelle.c@octomedia.com.au Inside Franchise Business is the FCA media partner and official online directory Confirmed distribution of March/April 2018 issue 8,100 - Print Post 100008121

MAY/JUNE 2018 | 5 | WWW.FRANCHISEBUSINESS.COM.AU

ALL INSIDE FRANCHISE BUSINESS MATERIAL IS COPYRIGHT. REPRODUCTION IN WHOLE OR IN PART IS NOT ALLOWED WITHOUT WRITTEN PERMISSION FROM THE EDITOR. OPINIONS EXPRESSED IN INSIDE FRANCHISE BUSINESS ARE NOT NECESSARILY THOSE OF INSIDE FRANCHISE BUSINESS OR OCTOMEDIA. © COPYRIGHT OCTOMEDIA, 2016 P R I N T E D BY: B LU ES TA R P R I N T 8 3 D E R BY S T R E E T, S I LV E RWAT E R N SW 212 8 P : 0 2 974 8 3 411

GLOBAL EYE

WORLD OF FRANCHISING Franchise brands are on the move, expanding interstate, heading overseas and also extending the business model.

COMINGS AND GOINGS GROWING, GROWING… Mexican fast-food chain Zambrero has launched in the US with two outlets in New England and plans to take the business nationwide.

Zambrero is running the two initial restaurants itself but intends to grow its footprint across the US through development agents or franchisees.

Australian chicken franchise chain Oporto was set to open its first Asian outlet in Singapore as this magazine was going to press. It has partnered with a global financial services business Aura Group in Singapore with the goal of opening three outlets this year to be followed by 10 over the next five years.

There will be further Asian expansion in Sri Lanka, Thailand and Vietnam with a target of 50 outlets across the region within 10 years.

Melbourne burger joint Huxtaburger has introduced a speedy food concept, HuxtaGO. CEO Matt Fickling says the new format brings with it lower establishment costs for franchisees and allows the group to access real estate and areas around the country where it would not usually open, such as airports, transport hubs, highvolume CBD locations and shoppingcentre food galleries.

Australian bedroom retail specialist Forty Winks has hit a century with its latest store in Chatswood, Sydney. It now has 100 stores across Australia.

Fast-food franchise chain Sushi Sushi is banking on its reputation for

fresh, high-quality sushi by expanding into wholesaling. It will use its distribution centres for daily delivery.

It expects wholesaling will contribute at least 10 to 15 per cent of income within five years.

The Country Comfort hotel chain is expanding in regional Australia.

As well as seeking hotel owners, franchise manager Jeff Claxton is on a road trip to pin down locations in New South Wales and Victoria.

Country Comfort is part of the Next Hotels & Resorts business.

Discount Drug Stores has opened Australia’s first drive-through pharmacy in the Australian Capital Territory. The drive-through pharmacy will offer customers a click and collect program, script collection, and e-commerce orders. ...GONE Food and grocery delivery franchise Aussie Farmers Direct has closed after going into voluntary administration.

Almost 100 franchisees have been hit by the closure of a company that began 13 years ago delivering fresh milk, cheese, bread and juice in Victoria.

Administrator Craig Shepard at KordaMentha says the business has struggled to compete and failed in attempts to recapitalise, partner or find a buyer. “Unfortunately, it is not possible to continue trading and the business will stop immediately,” says Shepard.

DOWN BUT NOT OUT… The Red Lea Group has gone into voluntary administration, but its franchisee network of 22 stores is continuing to trade.

Red Lea distributed fresh and cooked chicken products to 28 specialty locations and supplied chicken products to supermarkets, specialty butchers, restaurants and hotels from its processing plant in Blacktown, west of Sydney.

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GLOBAL EYE

According to the administrators, the sole director intends to submit a Deed of Company Arrangement that will cover outstanding employee entitlements (including unpaid superannuation, wages, annual leave, long-service leave, pay in lieu of notice, and redundancy) in full and provide a return to unsecured creditors.

FAREWELLING FRANCHISING Caltex is to pull out of franchising, revealing plans to take back its core business by mid 2020, a venture that will cost up to $120 million.

Its latest company report says reverting its retail to corporate control will lead to a more consistent customer experience, allow the business to roll out new platforms, standardise services and simplify supply arrangements.

At the end of December, Caltex franchisees ran 433 sites in the 810-strong network, with 314 company sites. Franchising has been an integral part of growing its retail business.

The company report acknowledges the significance of the decision for franchisees and has indicated it intends to work with them to manage the change, including the offer of transition support and employment opportunities for franchisees.

NEW TO FRANCHISING

FEELING GOOD

Talbot Doors has granted its first franchise and has plans to sign up another four this year. The business is an automatic door installation and service company for the facility management industry.

More than 40 per cent of the industry’s revenue comes from maintenance services, and the firm has built relationships with large commercial enterprises including CBC, CBRE, CI Australia, JLL and Knight Frank.

Fixing broken doors and safeguarding security and safety is at the heart of the firm, which began trading in 1985. It has launched its own brand of automatic sliding and swing doors as well as trackless bifold gates. In 2013 it started making aluminium doors and frames.

Meanwhile, the increasing smart home trend provides further business opportunities, says Talbot Doors.

It is a franchise that suits individuals with a sound technical background and some electrical knowledge. It is planning to expand in New South Wales before extending across the broader eastern seaboard.

Investment in a new franchise territory starts from $139,000 for five years with one option to renew for a further five years.

Convenience store chain 7-Eleven and Simply Cups have partnered to prevent 70 million cups entering landfill each year, and are urging Australians to join inn help save the environment.

CEO Angus McKay says 7-Eleven is committed to helping the community recycle 70 million cups each year, the equivalent to the number sold in-store.

“Our goal is to change the way people think about recycling, and encourage other organisations and community members to get on board and install a Simply Cups bin in their workplace, park or school.”

Closed Loop’s Simply Cups founder Rob Pascoe says takeaway cups are lined with polyethylene that prevents liquids from seeping through. However, it also means the cups cannot undergo normal paper recycling.

Simply Cups has developed technology to remove the plastic lining from the cups so both materials can be processed.

Any brand of take-away coffee cup or Slurpee-style paperboard cup can handed in at 7-Eleven for recycling. n

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INSIGHTS

W

Text

There is an expectation of Content

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OFF CENTRE Shopping centres are taking on a new look as the balance of tenancies shifts under pressure from the continuing evolution of online shopping.

By Matthew Elmas

W

hile online shopping has presented challenges for regular retailers, pressure is also increasing on shopping centres and their retail tenants with competition particularly intense in the food and beverage sector.

The concentration on food and beverage retailers in the tenancy profiles of Australian shopping centres has driven up competitive pressures for existing traders, according to JLL’s latest centre manager survey.

Overall tenancy inquiries have increased, but 73 per cent of shopping centre have had weak or very weak interest from clothing and footwear retailers, according to the latest JLL retail centre manager survey.

This comes as centres look to adjust their offers with a focus on tenants whose offers cannot be replicated online, but the shift comes at a cost.

JLL’s Australian head of property and asset management Richard Fennell says competitive pressure on food and beverage (F&B) retailers has increased as landlords adjust their focus. “A number of centres

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are shifting their offering to food, services, entertainment and leisure uses and focusing on marketing initiatives to drive customer traffic.”

MORE PREDOMINANT Health, gyms, medical centres, other medical-related services and insurance are also becoming more predominant in shopping centres.

“In some centres, the number of F&B tenancies has begun to create competition for existing outlets, and the expanded offering from supermarkets has started to result in lower demand for speciality food retailers,” says Fennell.

Concern over the impact of increasing levels of competition on the fast-food sector has been growing, with health-food chain Sumosalad last year opting to put two of its leasing entities into administration amid a dispute with Westfield ANZ, the owner Scentre Group, regarding “elevated intensity” of competition.

Sub-regional specialty rents increased by 1.1 per cent last calendar year, says JLL, while neighbourhood centres reported a 1.2 per cent increase – up from a 0.9

INSIGHTS

RETAIL TRADE JAN 2018 [YEAR ON YEAR MOVING ANNUAL TURNOVER]

PROPORTION OF PROPERTY FLOORSPACE

BY USE TYPE.

YoY (MAT) 12% Household goods Clothing Department stores Cafes, retaurants, &t takeaway

10% 8% 6% 4% 2% 0% -2% -4%

Jan-14 Jun-14 Jan-15 Jun-15 Jan-16 Jun-16 Jan-17 Jun-17 Jan-18 Jun-18

Source: ABS, JLL

per cent fall in the year to June.

JLL says there are growing expectations of rent decreases on lease renewals among centre managers, 63 per cent of whom believe a 10 per cent sign-up incentive is needed to secure new tenants in the current retail environment.

At the same time, 37 per cent of centre managers expect rental growth in the next 12 months, albeit only around 3 per cent. More managers (43 per cent, up from 35 per cent in August) expect rents to stay about the same.

DRIVING FACTORS Regarding sales outlook, 56 per cent of managers expect positive growth over the next 12 months, up 3 per cent from the previous survey. About a quarter believe sales will be about the same.

“Planned refurbishments, tenancy profile changes and growth in the trade area were driving factors of the improved trading expectations,” says JLL director of retail research, Andrew Quillfeldt.

Meanwhile, more centre managers have noted an increase in specialty tenants seeking rental help as landlords turn to pop-up shops to fill shortterm vacancies. About 23 per cent of managers report receiving interest from fashion retailers in casual leasing arrangements, while 66 per cent of respondents say they received interest in pop-up shops in general.

Annual rents increased by about 3.2 per cent a year with inflation of 1.25 per cent, outstripping total retail turnover growth for specialty stores, which grew by 3 per cent a year.

“A reset in rents will be necessary to avoid upward pressure on occupancy cost ratios,” say researchers in JLL’s

Source: Urbis, JLL Research

annual shopping centre investment review. “We believe retailers will continue to seek more sustainable occupancy cost ratios at lease expiry, given cash-flow pressures in terms of competition-led discounting, slowing sales growth and a rising cost base.”

PAY MORE Sub-regional centre owners are responding to changing conditions by concentrating more on tenants whose offers are not suited to e-commerce, such as F&B traders and service providers – but these tenants also pay more rent. F&B rents are about 48 per cent higher than apparel rents, 30 per cent higher than general retail and 50 per cent higher than homewares rents.

F&B retailers now account for 17 per cent of specialty floorspace in retail centres, up from 13 per cent in 2009. JLL researchers say this has been driven by

a contraction in homewares and leisure tenants.

Despite reports centre owners are finding it harder to secure tenants, JLL says it expects vacancy rates to stay “resilient” this year, noting there will be challenges in the leasing market as landlords replace underperforming retailers. This echoes Scentre Group chief executive Peter Allen’s warning to retailers that are unable to keep up with the times.

“There’s no doubt the industry’s evolution will continue, as those brands that no longer perform or are relevant or desirable to customers will fall away,” he said.

JLL did say it expects the Australian macroeconomic backdrop to improve this year following initial signs that wage growth may be set to recover. It is forecasting annual wage growth at 2.6 per cent, up from the 2.1 per cent a year average over the past three years. n

SPECIALTY RENT OUTLOOK

Source: JLL’s Retail Centre Managers’ Survey MAY/JUNE 2018 | 12 | WWW.FRANCHISEBUSINESS.COM.AU

Be the

LEADER OF N W O R U O Y SUCCESS Welcome to a world of opportunity, brought to you by 7-Eleven, the brand that’s world famous.

A 7-Eleven franchise is a partnership in success.

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BENEFITS OF BEING A 7-ELEVEN FRANCHISEE Our stores are open 24/7, so we’re with you 24 hours a day, supporting you in every part of your operation.

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FRANCHISING

THE LIST

ANIMAL

MAGIC

Australians of all ages love the companionship a pet brings, so it is little wonder that petcare is big business. Check out these franchise options.

P

ets have earned a top spot in Australian households as really bona fide family members. In a national study on pet ownership last year, Animal Medicines Australia (AMA) found that 5.7 million households had at least one pet.

The same study revealed that in 2016, Australians spent $12.2 billion on pets.

There is certainly plenty of economic benefit to owning a pet-centric business. Here Inside Franchise Business showcases five pet-focused franchises that love what they do.

BLUE WHEELERS

DOGUE

Mobile dog-grooming franchise Blue Wheelers started in 1994 as HydroDog and began franchising two years later.

The business was rebranded in 2012 to Blue Wheelers, Wash, Clip & Groom.

Any switched-on dog lover can get on the road from $14,990 in a used mobile salon, with a top-of-the-range option costing less than $50,000.

There are at least 180 Big Blue Dogs travelling the roads of Australia, grooming more than 7000 pets each week.

Blue Wheelers has published an ebook dealing with the health benefits of dog ownership and the advantages of working with dogs.

DOGUE was the first exclusive dog boutique in Australia when it launched in 1998. It set out to introduce the world of haute couture to the canine by launching the brand as a stylish way to accessorise your pet.

DOGUE franchising followed in 2014, with the 10th store about to open.

Across ACT, New South Wales and Victoria, the stores specialise in offering exclusive and stylish products, high quality and tailored grooming and playtime services in an intimate environment.

“We consider dogs part of the family.

They are our best friends, and our entire approach is built around this,” says DOGUE business development manager Amelia Perry. “We are active members of our local community and we are passionate about animal welfare.”

Opening a DOGUE Boutique & Spa involves an initial franchise fee of $40,000 plus GST. The set-up costs vary depending on the size and site location, but the average set-up cost is $150,000 plus GST. This includes the initial franchise fees, training, stock, lease deposit, launch, fit-out,and everything else required.

Ongoing costs include a 6 per cent franchise service fee and 2 per cent group marketing contribution fee paid monthly; 1.5 per cent of gross revenue must also be spent on local marketing.

DOGUE is seeking franchisees who are committed to offering exceptional customer service, are highly motivated, feel the magic of the brand and are truly passionate about dogs and their care, says Perry.

Further expansion is planned for this year, maybe even overseas.

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THE LIST

HENNY PENNY HATCHING

JIM’S DOG WASH

LONELY PETS CLUB

A chick-hatching program was made available through Old Macdonald’s Travelling Farms in 2000. It was so popular it became a separate entity in 2001 as Henny Penny Hatching.

The backyard chook is a traditional part of Australian culture, and the franchise delivers hatching programs to schools, kindergartens, childcare centres and aged-care homes.

Henny Penny Hatching franchisees need to pay vehicle expenses and insurance. They also need to buy eggs for the hatching units they deliver each week. As the head office is in Queensland, franchisees in other states pay freight to have their eggs flown to their nearest airport.

The franchisor is seeking friendly, motivated individuals who enjoy connecting with people and working with animals. Franchisees need a current driving licence and also need permission to work with children in their state.

Henny Penny Hatching has 15 franchisees across the eastern seaboard.

Jim’s Dog Wash started alongside Jim’s Mowing more than 30 years ago, and there are now 4500 franchisees.

The cost of setting to setting up a Jim’s Dog Wash franchise vary from state to state, but the ongoing costs are minimal. No royalties or commissions are charged, but there is a monthly flat rate.

The fees do not change if franchisees have extra trailers on the road or hire employees.

Jim’s Dog Wash franchisees come from all walks of life – nurses, policewomen, office workers, childcare workers, hairdressers and parents seeking to re-enter the workforce after having children.

There are currently 75 franchisees across Australia, apart from Northern Territory.

Jim’s Dog Wash is set to launch in the UK this year, with two new franchisees attending training in May.

Lonely Pets Club is a mobile pet-feeding business, offering pet owners an alternative to taking their pets to kennels and catteries while they travel away from home. The franchisees collect mail, do property security checks, walk dogs, feed all pets, pick up dog waste, change kitty litter and top up water bowls. They can also water plants, tend rubbish bins and administer pet medication as needed.

Franchise fees range from $9000 for new areas to $99,000 for established territories, prices determined by turnover and client numbers. Franchise royalties are 20 per cent with a 5 per cent marketing levy.

Franchisees who are pet lovers, friendly, professional, trustworthy and customer-service focused are sought.

Franchising makes up 30 per cent of the business model. There are four franchisees running seven businesses in Melbourne and Perth.

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02 9651 3444

LEADERSHIP

RELATIVE STRENGTH What’s it like to go to work with your life partner or sibling? Bakers Delight and Shingle Inn are two franchises which leverage the benefits of a family firm.

By Gali Blacher MAY/JUNE 2018 | 18 | WWW.FRANCHISEBUSINESS.COM.AU

T

he word family can mean many things to different people.

Family can bring you joy, love and sometimes the complete opposite. Often it’s really a mix of it all. Owning a business with your family may seem like a nightmare for some but for others it really is the magic that makes the business work.

Some franchises are family owned

and this has some great benefits for franchisees like having a warmer and welcoming vibe within head office which can often translate to happier customers.

But, like everything in life, there are positives and negatives associated with family owned businesses.

“A potential advantage associated with family run businesses are lower costs. Typically, family members are willing to make financial sacrifices for the sake of the business, in order to see

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better long-term returns,” says IBISWorld analyst William McGregor.

“Consequently, during tough economic times, family run businesses may be in a better position to survive as they can reduce costs. Family run businesses often employ fewer people, which also reduces labour costs.”

Inside Franchise Business had a chat to two well-established franchises to see what being a part of a family owned business is all about.

LEADERSHIP

Elise Gillespie and David Christie

Roger and Lesley Gillespie

BAKERS DELIGHT For Bakers Delight it has always been about family. As a family-run business everyone is treated just like..well..family.

The first Bakers Delight was opened by Roger and Lesley Gillespie, in Hawthorn in 1980. Baking has been in the Gillespie family’s blood for generations so the business was founded on the back of a genuine passion for bread and decades of learning and experience. The success of the original Bakers Delight bakery in Hawthorn led to the establishment of another bakery and then another until the Gillespie’s went to try their luck with the business in the US. During their time there they learned about the value of franchising and brought their knowledge back to Australia.

There are now more than 700 locations across Australia, Canada, the US and New Zealand.

Elise Gillespie, daughter of the founders, has now taken over the reins as joint CEO with her husband David Christie.

Her parents are still involved as directors on the board and Elise’s brother Aaron runs the North American business as president. Other family members have even been involved in the business over time as employees of Bakers Delight or franchisees.

Gillespie says the family aspect of

the business puts value long term goals rather than just worrying about short term targets. “We want our children to care about the brand as much as we do,” she says.

While having a family owned franchise has it perks due to the communal and familiar feel that the business possesses, Gillespie says she needs to be conscious of separating family and business at times.

“We’re always talking about business as a family, and we need to be conscious that the rest of our executive team weren’t a part of the discussion we might have had over dinner!”

Families often have their ups and downs and the franchisors find that communication and good advice helps to combat that.

“We’re very open and deal with issues head on before they become bigger issues.

We also have great external advisors who keep us in line,” says Gillespie.

“We have a formal family council which is chaired by an external advisor. We run these meetings with the same professionalism that we would expect a board meeting to run.”

The co-CEOs say they never lose sight of the fact that the family business is made up of many smaller family businesses, the franchisees.

“We know they experience the same high and lows and the complexities of running a family operation that we do

which allows us to approach things differently. Being a private company also enables us to be more agile in the marketplace and gives us more scope to take calculated risks and innovate where we need,” says Gillespie.

The franchise’s longer serving staff and franchisees in particular appreciate that they can speak directly with the owners.

“We have many people who have been involved in the business since the very early days and have formed close relationships with them,” says Gillespie.

“We believe the continuity of ownership is seen as important, but at the end of the day what really matters for staff and franchisees is doing meaningful work and getting well recognised and rewarded for it.”

The franchise says franchisees should have a passion for retail, a strong work ethic, a great leadership and must be community minded.

SHINGLE INN Shingle Inn was originally established in Edward Street Brisbane in 1936 by the Webster family. Barbara and Noel Bellchamber bought a number of hospitality businesses from the Websters over the years, including Shingle Inn in 1975.

Bellchambers’ children Andrew and

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LEADERSHIP

The Bellchambers family Peter (who now run the business) together with their parents made the decision in 2007 to expand the café side of Shingle Inn through a franchising model.

The Bellchambers have been running family businesses for many many years - you could say it’s in their blood.

The business has family values through and through and wanted to allow other families to have a chance to run their own business. In December 2009 they franchised three of (then) eight company-owned stores, as well as two greenfield sites, to start their lives as franchisors with 10 Shingle Inn cafes.

Peter and Andrew have been involved the family business their whole lives.

Business really is second nature to them.

“I don’t think the franchising element has changed our approach to the business, however, it has given us an appreciation for the fact that many of our franchisees are in family businesses themselves, working with their wives, husbands, brothers and sisters and children,” says Andrew Bellchamber.

“Both Peter’s wife, Noelene, and my wife, Louise, work in the business and Peter’s daughters have also worked in the cafes at various times during their school and university lives. My first child was born while our first franchisees were in training!”

The franchisor says Shingle Inn has been the backdrop for many family traditions for generations, especially in Queensland.

“It doesn’t matter where in Australia we open a store, without fail someone approaches me to recall visiting the original store with a grandparent or being taken there by their parents for a special occasion,” says Andrew Bellchamber.

The brother duo say that they

appreciate the celebrations and challenges that come with operating a family business and the way this translates to the families that run their businesses within the Shingle Inn network.

“It can be important to create boundaries around work so that you don’t solely operate as a work-unit and can have family time as well. As a whole, our family has always utilised birthday celebrations and special occasions like Mother’s Day to get together and enjoy each other’s company,” says Andrew.

“It wasn’t a ‘rule’ not to talk about work at these functions but we rarely do. We use these opportunities to catch up on life outside of work, particularly the milestones our children are celebrating.

“Like many family business owners it is difficult to switch off as you tend to be constantly thinking about what needs to happen the next day, week, month, or even next year. As a consequence, I try to have at least one day during the week that I don’t do any work at home and I like to spend that time outdoors with the kids and exercising as I find that helps to clear my mind.”

The Bellchambers say they are not a confrontational family and have always had a structure to the way they approach work with monthly director’s meetings and an appreciation of what everyone brings to the table.

“Our skill sets are very different too which I think helps. Peter and Noelene are both accountants, while Louise and I have communications, business management and HR degrees,” says Andrew.

“It’s a rare occurrence that we’d be upset with each other and even rarer that we’d show it. We each have our roles and we

get on with the job. It is an ethos that was instilled in us at a very early age.

“In any family business there’s generally a common goal; you all want a mutually beneficial outcome – a successful business.

We have common values, a common work ethic and a vision that’s heavily aligned.”

The franchisor says a clear advantage has been employee retention.

“Our family culture has helped us retain team members for long periods, including one employee who has been working for us for over 35 years and a raft of others who have worked in the business for 10, 15, 20+ years,” says Andrew.

“This has always been a feature of our family business and it definitely benefits our franchisees as we’re able to offer continuity and an in-depth knowledge base from our team. We truly understand the long hours and the pressure of separating work and family time. I think [being a family run franchise] gives us a level of insight and compassion that may not be afforded to franchisees in businesses where the stakeholders are not directly involved.

“Many new franchisees tell us that the family component is one of the key reasons for joining the Shingle Inn network.”

Family culture is one of the cafe chain’s brand values. The Bellchambers want franchisees to feel like part of the family and use that vocabulary often. The quarterly group meetings are referred to as family forums.

“Franchisees pick up very quickly on the family dynamic so anyone who embraces that environment will tend to feel very comfortable from the initial stages of engaging with our brand,” says Andrew. n

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LEADERSHIP

POWERED FOR

SUCCESS

Total Tools is a retail chain that just keeps delivering for both customers and its investors - and potential franchisees keep lining up waiting for sites to become available.

I

f you found a franchise that was committed to ensuring strong sales for franchisees, evident in double-digit growth, you would want to know where to sign up. And it is a challenge that has already been admirably fixed by Total Tools, which is on a limited-growth trajectory and proving to be a favourite with business-savvy investors.

The retail chain is an unusual set-up, developed from a co-operative structure that has given it a strong sense of community, and put franchisees front and centre. Twenty franchisees founded the business in the changeover from a co-op in 2007, and these are all present-day shareholders in Total Tools. Two or three of them at any time serve on the board, which is also overseen by an executive board.

So franchisees are, literally, at the

heart of the business. This is evident in the tenure of the franchisees as well.

Agreement terms run up to 10 years with renewal options, and as yet no franchisee has sold on their business.

Quite the reverse, actually. The strength of the business model has seen franchisees embrace multi-unit ownership while maintaining a fair level of influence. A single franchisee’s ownership of multiple outlets has been capped at 10 per cent of the overall

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We’re in a privileged position.

We have franchisees waiting for sites.

network size, which by the end of this financial year will be 73.

TERRITORIES PRE-MAPPED Fred Pose, franchise and leasing manager, says the growth plan is 131 territories across Australia, already pre-mapped and researched. “We are more than halfway through and have 10 booked for the next financial year.

We are looking for franchisees mainly in Sydney and New South Wales.” Just a single location is available in Queensland, and three in Western Australia.

Franchisees are snapping up their second, third and beyond outlets interstate as well, with Total Tools’ female franchisee Lisa Gilbertson running two sites, in South Australia and Western Australia.

Pose says most franchisees are already future-proofing their businesses.

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“It is part of the culture and has been encouraged because of the nature of the franchise,” he says. “When I started at the business, I was receiving endless emails asking for certain tools. That’s because if anyone needs a tool, the whole business network receives an email. Then there will be a response email saying, ‘I’ll ship it to you’, or ‘I’ll drive it down’.

“Franchisees from another state will even turn up to help new franchisees

LEADERSHIP

Tim Cockayne, CEO launch their business. We’re in a privileged position. We have franchisees waiting for sites.”

ATTRACTING ATTENTION The success of the model is attracting attention from former McDonald’s franchisees, intrigued by the performance and structure of the business. A significant support staff is fundamental to this, says Pose. “Our head office in Melbourne has 80 to 90 people, and we have only 67 stores.”

A marketing department of 26 people is “substantial” he says, and puts out 14 sales calendars each year outlining the marketing campaigns, and is responsible for an app used for marketing and loyalty programs.

For CEO Tim Cockayne, the importance of understanding the customer and their details is paramount. “The broad approach of sending everyone the same offer has gone. When you run loyalty, and e-commerce, gathering data and understanding the customer better, you can tailor offers to customers. For us, it is a part of the overall customer service.”

For six years the business has

reported double-digit growth, with comparative sales up 22 per cent for last fiscal year. However, the retail sector overall is facing challenges, namely high rents, labour costs and online shopping.

How is Total Tools addressing these issues?

The business is working on its online sales platform to drive sales back to the franchisees, and is focused on bringing in national accounts. Says Cockayne, “We treat all our stores as distribution centres.

Being a franchise network, the sales still go through the store and it works well because it links the customer back to their local outlet.

“The other part is that we service our customer wherever they want, whether they are on the end of the phone, online or in a store. If you don’t adapt, there’s a good chance that in a number of years you’ll be wondering why your business is going backward.

“CHALLENGE OURSELVES” “We put a lot of marketing funds into e-commerce, and we continue to challenge ourselves in our ability to improve our logistics. Retail is about thinking similarly – how do I service customers in ways that they want, not what our business wants? Remember, a group of kids is about to enter the workforce who have never known a life without a mobile phone or the internet.

We need to be ready for them.”

Total Tools’ model appeals to savvy, business-experienced individuals who have accrued some wealth (investing in a store will cost up to $2 million).

Pose is clear: franchise recruitment is not about replacing a job; the aim is creating lasting wealth for franchisees.

“We don’t need you to know how to use a spanner. If you can understand business, marketing, motivating people and numbers, we’re interested.”

These are big businesses, too big to run without a manager in place, says Pose. And the model has benefits. As franchisees expand their empires – a minimum 12 months is mandatory before anyone can invest in a second store – they are turning to their managers for equity partnerships in further sites.

It will be another three to four years before the ultimate goal of 131 outlets across Australia comes to fruition. So could overseas expansion be on the cards?

“The reality is Total Tools will not work in every country,” says Cockayne. “I don’t think it would work in some developing countries or underdeveloped second- and third-world countries, but when you look at places like New Zealand, the US and across Europe, it will work because when you look at the numbers, they have the same requirements regarding construction, they have the same brands and the same needs.”

Watch this space. n

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LEADERSHIP

MAY/JUNE 2018 | 28 | WWW.FRANCHISEBUSINESS.COM.AU

IT'S A

GOAL! A love of soccer teamed with a passion for early learning and a commitment to develop a franchise network has allowed Soccajoeys to kick some goals.

P

lenty is happening in the world of the Soccajoeys world, Firstly, the New South Wales-based children’s football program has expanded into Victoria and is set for an autumn launch into Queensland. Already South Australia has its third franchisee.

“We’ve been looking at expanding,” its MD, former soccer player Stacy Allogdellis, tells Inside Franchise Business. Then there is the broadening of the offer, with an expanded set of options for customers.

When the franchise started it had two age groups, three years to five years, and six to eight years. Now, thanks to demand from parents, a Minis group accommodates tiny tots from 2½ to 3½ years old. Parents can book birthday parties and holiday camps for their soccer enthusiasts.

Add to this the introduction this year of a schools program and a childcare option, and Soccajoeys is scoring points when it comes to brand representation and income opportunities.

“We’ve moved into daycare centres because we have a good reputation, and we’ve been asked to be exercise providers,” says Allogdellis.

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LEADERSHIP

I wanted to cater for youngsters aged three to five, and that was the original franchise concept.

ALL GOOD NEWS The combined franchisor/franchisee approach and presentations to schools has paid off with eight New South Wales schools on board from term one, and a potential nine further schools lining up to take on the program next term. “We deliver part of the PDHPE (personal development, health and physical education) syllabus to years K to six,” he says.

For franchisees, it is all good news.

And a feelgood factor backs up the brand, too. The Soccajoeys Foundation was set up to deliver the Next Step program, an opportunity for children with cerebral palsy, ADHD and Downs Syndrome, for instance, to participate in the football activities through special classes. This is a corporate set-up with the costs of running this program (each class of eight children has two coaches) funded by the franchisor.

For the children, the benefits are not only exercise, but a sense of wellbeing and participating in a group environment, says Allogdellis. The program

is available in New South Wales and South Australia, but the plan is to extend this across Australia. There are now 26 franchisees, including six who run more than one Soccajoeys territory, employing teams of 10 to 15 coaches.

LONG-TERM PLAN

childhood learning, and I saw that kids couldn’t get on the pitch until they were five or six. I wanted to cater for youngsters aged three to five, and that was the original franchise concept.”

And so Soccajoeys was born. And since 2007 it has helped more than 400,000 children become active. n

Allogdellis says it costs from $20,000 to invest in a Soccajoeys franchise. While the business is deploying a measured approach to expanding nationally, there is also a long-term plan to take the brand international.

This great adventure all started when former Sydney Football Club/Sydney Olympic Marconi player Allogdellis turned from playing to coaching. When he returned from a stint on the OFI Crete team, he stuck with his beloved football but moved to the sidelines.

Heading up soccer coaching in several private schools in Sydney and working with local clubs he saw the enthusiasm young children have for the game.

“I’ve had a strong passion for early

MAY/JUNE 2018 | 30 | WWW.FRANCHISEBUSINESS.COM.AU

you deserve to join a growing industry Established in 1996, Australian Skin Clinics has now expanded to nearly 50 clinics nationally, due to client demand. We are leaders in highly effective laser and skin treatments, cosmetic injectables, acne programs and skin care products.

Australian Skin Clinics has developed The Advanced Skills Academy (TASA) to provide full training and development for all franchisees.

If you are new to the industry, you can be assured that by the time you open your clinic, you will be equipped in all areas of management including recruitment, marketing, medical requirements, legal, systems, procedures, protocols; all supported by a Medical Director and in-field teams.

franchise benefits Nationally recognised brand Turnkey operation Ongoing training and development In-field support from business development managers and training teams

Custom IT systems and online sales and support Advanced medical support 7 days a week with a Medical Director Multi-channelled centralised marketing support Latest treatment technology

1300 303 014

we’re the one’s in blue!

australianskinclinics.com.au/franchise

Join the fastest growing sector in retail!

LEADERSHIP

NEW TERRITORY

FOR TILES Retail franchise chain Beaumont Tiles plans to grow its Australian footprint ‒ and take its brand overseas.

R

etail franchise chain Beaumont Tiles plans to grow its Australian footprint from 115 stores to 180 ‒ and take its brand overseas. Most of the 65 new stores in Australia will be franchised, says CEO Bob Beaumont.

“There is plenty of opportunity within Australia, and opportunity for sales within each store to grow as well,” he tells Inside Franchise Business.

Staff development is the key to strong sales growth, he says. “We

already have very good marketing, and I think we can develop our people to be stronger and better.”

As the base for future business, the company is launching an IT system this year. “We plan to grow substantially over the next four to five years and can use this as a launchpad to extend the brand overseas.”

No specific countries have yet been targeted for expansion, but the team working on exporting the brand has pinpointed Asia and North America as potential regions.

“We believe that by bringing together the disparate parts of the

business, particularly the IT this year, we can build on this package, transfer and adapt it. We will have to be flexible but strong enough to withstand any environment,” says Beaumont.

He identifies the challenge as developing a system that takes a client through the sales process to delivery and payment, integrating all aspects.

“We also need to be able to plug in marketing, web, IT-based training and payroll – any system in a different country.

“The big one is logistics, but we’re set up already with worldwide sourcing so it’s not such a big step there.” n

MAY/JUNE 2018 | 32 | WWW.FRANCHISEBUSINESS.COM.AU

Are you passionate about leading others?

Do you want control of your future?

Join a winning team!

Our coaches worldwide recommend this opportunity as a personally-fulfilling and financially-rewarding business, offering a balanced lifestyle.

Earn more, Work less www.focalpointfranchise.biz Contact Andrew Phillips on 0418 500 721

LEADERSHIP

CARVING A

NICHE

One franchisor, two franchise brands...fast food outlets are expanding in the casual dining market.

B

ucking Bull and Skewerz Kebab eateries have unveiled new stores in the recently redeveloped Mandurah Forum Shopping Centre, bringing the total number of Aktiv Brands outlets to 40.

The sibling brands have opened neighbouring outlets.

“We’re very excited to have such a prominent presence in Mandurah Forum,” said Aktiv Brands executive director, Dean Vella.

“We had a remarkable response to both

stores, serving nearly 4,500 customers collectively in the first seven days.”

Both Bucking Bull and Skewerz operate under the same best practice model, but appeal to very different segments in the market.

“Bucking Bull is a boutique carvery offering specializing in slow cooked and roast meats, whilst Skewerz Kebabz is a modern kebab outlet inspired by the flavours of the Mediterranean,” Vella said.

Mandurah Forum centre manager Jacqueline McKenzie said she was excited to welcome Bucking Bull and Skewerz Kebabz to the transformed centre.

“Our new indoor-outdoor food court has provided the region with an exciting new destination for dining, entertainment and relaxation and we’re thrilled to provide these two excellent quality dining options to our customers,” McKenzie said.

The wider Perth region is a key focus in Aktiv Brands’ expansion strategy, with plans for both brands to further grow in the casual dining market.

“Last year we launched the very first licensed Bucking Bull at Watertown Brand Outlet Centre in West Perth, and a sit-down, casual dining model for Skewerz Kebabz is currently in development,” Vella said.

The kebab casual dining model is planned to launch late 2018/early 2019 and the Bucking Bull offer will be taken nationally.

“Most shopping centre food courts across Perth have either a Bucking Bull or Skewerz, if not both, so we’re looking to diversify our models to accommodate future growth,” said Vella.

“We are currently in the process of recruiting suitable master franchisees to play a pivotal role in the expansion of Bucking Bull and Skewerz Kebabz, particularly in Queensland and New South Wales. As well as expanding our food court foot print, we’re also looking to roll out additional casual dining restaurants in appropriate sites.” n

MAY/JUNE 2018 | 34 | WWW.FRANCHISEBUSINESS.COM.AU

lWe’re

FraNchisingl For more information on becoming a Gelatissimo franchise owner contact (02) 8845 0100 or email franchise@gelatissimo.com.au

LEADERSHIP

SPICING UP

OUR PALETTE Australia’s first Mexican chain is still going strong and cooking up more expansion plans.

F

ifty-one years ago a tortilla machine introduced to the Australian market a whole new food concept. At that time, a 2lb (0.9kg) loaf of bread cost Sydneysiders about 18 cents. Sydney also got its first Lebanese restaurant. When Margaret Fulton was a year away from publishing her first cookbook and KFC had not yet launched here, the man who became “Taco Bill” brought exotic dishes from central America – enchiladas, nachos and the margarita – to spice up our palates.

Bill Chilcote arrived from the Californian/Mexican border and set up his first restaurant on the Gold Coast, serving a takeaway menu. Today, Mexican cuisine is one of the fastest-growing quick-service restaurant categories and is a familiar segment in supermarket aisles.

But it was not an overnight sensation, and the market has really only become as competitive as it is now in the past 10 years. Years and years were spent educating the public about the food, says

Taco Bill CEO Tom Kartell.

“We were the first to incorporate Mexican food into the Australian way of life, with our fresh produce and authentic Mexican recipes,” he says. “When we started there were so many challenges.

The only people who had really experienced Mexican food were those who had travelled. Nobody had been exposed to this type of cuisine in Australia before.”

Taco Bill has provided Kartell with an extraordinary career path. An immigrant from Iran who could not speak English when he arrived in the 1980s, he took a job as a temporary kitchen hand at the South Melbourne Taco Bill outlet, then kept being promoted until one day he was running the kitchen. He worked hard for six years, borrowed the finance for his first restaurant, then bought a second and a third before moving to head office.

“I did an MBA, got myself educated, so I could understand the business part,” says Kartell, who has been instrumental in expanding the business and is proud to have celebrated last year’s milestone of 50 years with this year’s goal to reach the sale of the 50th million taco.

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GET IN

The Game WITH AUSTRALIA’S FASTEST GROWING SPORTS BAR & GRILL SPORTINGGLOBE.COM.AU/FRANCHISE

LEADERSHIP

EXPERIENCE AND AMBIENCE Takeaway has been at the heart of the battle for the fast-food dollar, and although that was the brand’s home base, and is still a customer service option along with delivery, Taco Bill is more about experience and ambience, he says.

“We’re still about food service. We are producing fresh food, we cook everything at the restaurant.”

Costs in quick-service restaurants can mount up – rent, labour, cost of goods.

In major shopping centres, long opening hours and the battle for customers make the experience and economics a challenge for franchisees, he suggests, and that is when a franchisee might have to open and close the restaurant on a daily basis to keep costs down.

It is a different story for Taco Bill.

Kartell says that for the chain, which is not trading in top-tier shopping centres apart from Chadstone, rent is a small

Keep the staff happy, and they will increase sales. Provide a happy environment for them to work.

Reward them. component of the franchisee’s outgoings.

Taco Bill restaurants are destination outlets, he says, and for franchisees the good news is the opening hours are “reasonably short” for a hospitality business. Typical locations are in suburban and boutique CBD areas.

“The numbers have to stack up,” he says.

EXTENDING FOOTPRINT This is a brand that has been flying under the radar for a while, but now the team is ramping up expansion with plans to double the number of outlets over the next five years. Three to four outlets were opened annually from 2008 to 2010, but the focus

• • •

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is now on extending the Taco Bill footprint beyond its stronghold in Victoria.

Regional areas are the new targets, and careful site selection is designed to keep the brand growing, but not at the cost of existing franchisees. “We want to give franchisees enough room to do good business.

We don’t want to create competition within the group.”

Some of the stores will stay as corporate outlets, allowing the franchisor to use these sites for research and development. “We have some franchisees who have been with the brand 30-plus years. Once in there, they last,” says Kartell. It is about flexibility and lifestyle, he says.

The business suits a franchisee who is willing to form a close bond with the franchisor. More than one franchisee have multi-units, and more Taco Bill staff members are buying franchises.

“Their success is our success,” says Kartell. “We work together with mutual respect. We want franchisees to be

hands-on and control costs. Hospitality is a difficult business. You need to get the lifestyle right and balance family time.”

ATTITUDE PARAMOUNT An ideal franchisee wants to have fun, and is happy to engage with people, someone who enjoys rapid change. The right attitude is paramount, he says.

With workplace laws in the spotlight, Taco Bill supports franchisees with updated information, alerting them to award rates and staffing levels.

His tips for running a good franchise?

“Keep the staff happy, and they will increase sales. Provide a happy environment for them to work. Reward them.

“If they move on, you want them to take something somewhere else, for Taco Bill to have been a positive experience.”

Kartell is still a part-owner of several stores, and is the major shareholder in the

‘We approached Nirvana since we wanted to join an innovative and reputable beauty salon brand. More than just joining a franchise, we became part of a family....Their support and ‘We approached Nirvana since we knowledge has been invaluable in wanted to join an innovative and our initial start-up and subsequent reputable beauty salon brand. More growth... I feel lucky to be part of such than just joining a franchise, we became a professional organisation.” part of a family....Their support and knowledge has been invaluable in - Stewart, East Sydney Franchisee our initial start-up and subsequent growth... I feel lucky to be part of such a professional organisation.”

- Stewart, East Sydney Franchisee

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SAVVY APPROACH TO SOCIAL MEDIA Social-media activity is a driver for marketing and digital campaigns, but its influence extends to the design of the restaurants as well.

“We have changed our lighting and plates to suit social media,” says Kartell. It is important to provide an environment that encourages plenty of image posting, he says.

The menu has been tweaked to better fit with today’s customer who demands share dishes. Each franchisee does their own special, and there are seasonal dishes on the menu. business. In his spare time he can be found out and about at franchised outlets.

“I visit as many as I can. At night I’m out with the franchisees.

“I work because I enjoy what I do. I’m not just a franchisor, my intention is to make sure everything is done right.” n

LEADERSHIP

THE RIGHT FIT A Fernwood Fitness franchisee comes up with a fresh concept, which the women’s gym chain founder will help her bring to the Australian market – and maybe further afield MAY/JUNE 2018 | 40 | WWW.FRANCHISEBUSINESS.COM.AU

J

oining forces, a Fernwood Fitness franchisee and the gym chain’s founder are bringing a new concept to the fitness arena in Australia, with a shared hope of eventually taking it to the world.

Adala Bolto came up with the idea of Zadi Training after years of working as a franchisee in the female-only full-service gym brand.

DRIVING CHANGE

Based on her insights into the get-fit world, Bolto has a different audience in mind with her boutique offer. As the grande dame of Australian female fitness, Fernwood is backing its young protegee with her concept of a fresh approach, a branded studio.

“While there’s an obvious synergy between the two models, the demographics are quite different,” says Bolto. While Fernwood appeals to women of all ages and has such services as childcare, Zadi Training is focused on millennial women who want to be in a like-minded community and are not interested in the extras provided by a full-service gym.

Fernwood Fitness founder/CEO Diana Williams says she is excited about the new sub-brand and is fully committed to building it into a strong, reliable brand.

“Fernwood has been in business for almost 30 years, and while we have always changed to adapt to the ever-changing market and evolving demands of women, there is also another woman not catered for by Fernwood. The Zadi woman is independent, committed to hardcore exercise and wants to be part of a new movement reshaping the future of fitness for women.”

Women are driving a change in the fitness industry, says Australian Institute of Fitness training maestro Nardia Norman.

“We will see female-specific programs becoming mainstream. There is a rise of influential female body-positive professionals taking on weight loss and parts of the fitness industry that capitalise on women’s body insecurities. Together with more female-specific research and an empowered female consumer, we will see more programs dedicated to women’s training and health.”

Zadi has partnered with TechnoGym to offer bespoke technology not yet seen in Australia, such as built-in female-targeted weight options, tailored video display as well as personalised experiences for individual members, catering for all fitness levels. Flexible membership options will even include pay-as-you-go for classes.

Classes are the heart of the program.

It is based on exercise science, and the founders engaged fitness guru Damian Kelly to create a structured program that will work specifically for women.

While the strategy is similar to the F45 trainer/class-based model, there is a premium price tag for customers.

Class ratios are tightly controlled, the result of feedback in the research stage that oversubscribed classes were a pain point for many women. In Zadi Training, a studio space of up to 150sqm caters for a maximum of 16 participants, with a sophisticated fitout aimed to appeal to young professional women.

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Adala Bolto

BUSINESS EFFICIENCIES Bolto says the niche nature of the model allows for efficiencies across the business.

“It’s seamless, there is a lot of paperless functionality and streamlined technology.”

While passionate trainers are ideal franchisees, investors with the right approach, a passion for fitness and wellness but perhaps lacking fitness qualifications, can be signed up as well, and employ trainers to run the sessions. Kelly will train the trainers, so there is consistency across the network.

The focus will be on safety and effectiveness, offering different intensity levels and ensuring trainers can explain to customers which level to take. “It’s not a fad. It is based on ongoing fitness principles, but we’ll keep up with developments,” says Bolto.

Franchise buyers can expect to pay between $200,000 and $250,000 for a bespoke studio. In the pre-launch phase the company is running a teaser campaign on Facebook and Instagram before opening the first two boutique studios, in Neutral Bay and Surry Hills in Sydney. The brand will then roll out across New South Wales and other states throughout this year.

Without revealing the five-year plan, Bolto says the focus for the first 12 months is to get the first franchises up and running successfully. But the goals are ambitious and the brand can be global, she says.

Williams says she will be involved in the rollout and development of Zadi, with the day-to-day business being managed by Bolto.

So why Zadi? “We like the sound of it.

It sounds like a fashion brand or nightclub,” says Bolto. In Urdu, she says, the word expresses inner strength.

Perfect for a female fitness brand. n

LEADERSHIP

THE MAGNIFICENT

SEVEN

Small-business owners have so much on their plates they could be forgiven for not having time for charitable causes. Here Inside Franchise Business presents the third in a series showcasing franchisees, this time featuring a magnificent seven who see the importance in giving back and find time to help the community...

By Gali Blacher

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SCOTT CHAPMAN,

S

cott Chapman is a multiunit franchisee for Mexican quick-service restaurant Zambrero who, along with his wife Shae, has won awards for high achievement. He is also director of Brave Hearts, a child protection charity in Queensland which he supports both with time and money.

Chapman helps to generate revenue and fundraising through the Zambrero network, and co-ordinates raffles and giveaways that are separate to the chain’s other philanthropic channels.

Through the network he has been able to donate 4000 meals to the Plate 4 Plate initiative: with every burrito or bowl bought at Zambrero, a meal is donated to someone in need.

Part of the reason Chapman chose to be a Zambrero franchisee was because he knew that every day he could help half a million hungry people.

“Zambrero has such an incredible focus on helping those in need, which really

ZAMBRERO

helps you to get on board with brand and make a difference,” he says.

Chapman also mentors franchisees to help them achieve their goals. “I couldn’t have done what I have without my mentor, so it is important that I pass it forward.”

The Chapmans were voted franchisees of the year for the network, and as a reward will visit India this year to see the direct impact of their charitable work. The duo also believes education is power, and that if “people like us don’t donate to people who need it, the world would be a very ordinary place”.

“People think that donating to charity is all about money, and we don’t all have disposable incomes. Shae and I have skills to donate that can help generate a lot more money,” he says.

Chapman believes millennials have really helped drive the idea that businesses should embrace corporate social responsibility, and that contributing time is as valuable as money. n

“

MAY/JUNE 2018 | 43 | WWW.FRANCHISEBUSINESS.COM.AU

Zambrero has such an incredible focus on helping those in need, which really helps you to get on board with brand and make a difference

Build your successful business career Australian Franchisor of the Year - Twice!!

As a Poolwerx Franchise Partner, you can start small or jump potential - all backed by 25 years experience and outstanding support, marketing and business development systems.

Join us as a man and van, progress to multi-vans, a retail store and vans and then into multi-stores. Whatever your journey, we will help you realise your vision. you need to do is match your energy and enthusiasm with Australia’s award-winning franchise system.

Together, we’ll build a business for you and your family.

1800 245 447 or poolwerx.com.au/franchising

LEADERSHIP

LEANNE FOENANDER,

LISTEN TO YOUR BODY

F

actory worker Leanne Foenander was struggling to keep fit, but nothing worked for her until she tried her local gym with a difference, Listen to Your Body. The result proved inspirational. Not only did she feel fit and great, but she loved the community feel – to the point she gave up her job of 11 years to become a franchisee “to give back and inspire others”.

That was four years ago, and Foenander says her positive relationship with her franchisor, Ben Fletcher, has helped her to achieve great things for her community. She feels that time is more important than money, and brainstorms together with the Listen to Your Body team in order to find the best ways possible to give back.

Together with her staff members, Foenander is involved in community groups and fundraising activities, and helps small-business owners.

When the studio owner and her staff attended the primary school fair in Alphington, Victoria they took along a body scanner from the gym so people could check their health. Such a service usually costs $1500, but the Listen to Your Body team offered it without charge in order to help the community keep healthy.

“It was expensive, but the engagement was incredible and it is all about giving back,” says Foenander.

One gym client with a rare genetic disorder asked the franchisee if the studio could donate funds for research for the disorder, but Foenander decided to go a step further and run a major fundraiser involving local businesses. The concept is a fitness day where each member pays $55 to be involved, with all the money going toward the research. The studio will also provide lunch while the trainers are donating their time. Foenander is confident the event can raise the $3000 target.

“Ben [the franchisor] is a gun. He gives

Leanne Foenander (right) us ideas and suggestions, and tells us to contact community groups. It’s up to us to be creative with it,” she says.

The studio owner also encourages her staff members to be community minded.

“We have three young guys on the staff who get fulfillment out of not only doing their job but also helping people,” she says.

Foenander also donates vouchers to sports teams and offers stretching equipment from the gym to clubs that need it. Students studying fitness can benefit from trainer mentoring in the studio.

As Foenander works quarter by quarter, she will be assessing fresh options soon. “You have to live and breathe the positive impact,” she says.

The good work is paying off, not only for the neighbourhood but for the brand itself. Two of the studio’s members were so inspired by the work that Foenander says they have decided to buy their own franchise studio. n

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“

You have to live and breathe the positive impact.

LEADERSHIP

MARK MARTIN, NARELLAN POOLS

M

ark Martin of Narellan Pools Moreton Bay and Sunshine Coast participates in community work in the name of his young son Sam, who died at nine years old from a rare form of cancer. Seeing the work children’s charities do first hand, Martin wanted to carry on his son’s legacy by supporting the organisations that helped his family so much.

The charity Martin is aligned with holds an annual fundraiser, Give Me 5 for Kids.

“Having that human element was very well received by the community,” he says. The fundraiser aims to reach the $30,000-$35,000 mark, and Martin is in ongoing discussions with the charity about this year’s event. He believes it is important to change things occasionally and be creative with fundraising.

Martin says community and philanthropy are a big part of the Narellan Pools franchising network. The franchisee donates a swimming-pool package every year for which families can bid at auction. Through the Give Me

Narellan Pools owner and MD Chris Meyer, Mark and Tanya Martin, and Peter Baily, Narellan Pools’ COO 5 for Kids campaign the benefactor is Wishlist and the Child Health Services on the Sunshine Coast.

Other suppliers and businesses on the coast support Martin with the cause, and he says the franchisor has been “incredibly supportive” through the tough times and is encouraging about the community work.

Being a franchisee on the Sunshine Coast means there is a strong community feel because of the small population. “It really humbles me that people recognise my wife and I because of the work we do,” he says. “We see the charity evolve and grow, and as it is becomes bigger more people help with fundraising.”

Martin’s personal experience has helped reinforce his belief that local charities need support. One of his memories is of Sam in hospital using iPads that were funded by charity.

“We are fortunate we can help. Charity starts at home, and it starts in your community,” he says. “People use our services because of the charity work.” n

“

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community and philanthropy are a big part of the Narellan Pools franchising network.

LEADERSHIP

ANKIA KRIEL MUFFIN BREAK

A

nkia Kriel, the franchisee for Muffin Break Gladstone in Queensland, found last year incredibly busy as her business took on a community focus.

A supporter of the Pajama Foundation, she and her staff members dressed up as superheroes and invited customers to support the organisation, which helps children in foster care have a brighter future.

Kriel says she sees her customers as her family, and believes it is crucial to give back to her supportive community.

Muffin Break head office encourages franchisees to come up with communityfocused ideas, to think outside the box, and provides support for events.

Another event hosted at the Gladstone outlet was A Cup for the Cops at which members of the police force were on hand so customers could chat with them and ask questions. It attracted a crowd to the cafe.

Two years ago, the establishment of a gas plant in Gladstone brought about a huge but short-lived financial boost.

Ankia Friel dons a Batman mask for superhero fundraising event The town went from boom to bust, with locals last year facing financial hardship.

“It was a big struggle, and we really had to think outside the box to stay open,” says Kriel. Her realisation that the cafe was about so much more than a cup of coffee, that it had become a familiar and loving place, not only helped the business but also served the neighbourhood.

“Because it is a small community, it is really important to help each other,” she says.

As an example, her cafe also hosts a monthly meeting for a domestic violence victims support group. “I think it is really important that such groups can come to

a place that feels safe,” says Kriel. “It is a small community, and if they feel safe it really helps them to come back again.

They support us and we support them.

We also have their tins for donations.”

Kriel has found that the caring community feeling can manifest as practical help. When the cafe leaked during a rainstorm, customers lined up the next day with mops and buckets to help clean up the water.

“We had so many messages of support, and head office was on standby to come help, but luckily we were back trading the next day,” says Kriel. n

“

It was a very big struggle and we really had to think outside the box to stay open.

MAY/JUNE 2018 | 48 | WWW.FRANCHISEBUSINESS.COM.AU

IT’S NOT JUST FURNITURE,

IT’S A FRANCHISE CONCEPT! We are looking for franchise partners in Australia who have the synergy and resources to be part of our success story.

B E C O M E OU R N E W F R A N C H I S E PA RT N E R From Denmark to the world since 1952, BoConcept

BOCONCEP T – THE BR AND » Global brand | 65 countries; 265 brand stores; expanding to 500+ within 5 years

is the brand name of Denmark’s most global retail

» Stores | Europe: 149; America: 43; MENA: 10; Asia-Pacific: 63

furniture chain, specializing in premium quality

» Yearly | 15,000,000 website visitors, 5,000,000 in-store visitors and 500,000 customers

interior design for the urban-minded customer.

BoConcept is an established and proven franchise model with over 25 years of know-how.

WHY JOIN BOCONCEP T? » Global brand, with an outstanding reputation and demand worldwide » Experienced and solid franchisor, with a unique, proven and vibrant concept » Profitable business with a quick generating cash flow model » Exceptional training and support in all business areas

J OI N A G L OB A L L E A DE R I N DA N I S H FURNITURE DE SIGN, OF F E R I N G A

» Affordable franchise fee and no ongoing royalties BOCONCEP T IN AUSTR ALIA » 2 stores already operating in Sydney and 1 to open soon in Adelaide

PROF I TA B L E

» Plans to open at least 7 new stores around the country within the next few years

R E TA I L F R A N C H I S E

» Franchise Fee: $40.000 AUD per store (5+5 years)

C ON C E P T

» Initial Investment from $600.000 AUD » Currently looking for Franchise Partners to cover the following areas: Melbourne; Perth; Brisbane; Gold Coast; Newcastle; Canberra.

F OR F U RT H E R I N F O R MATIO N F R A N C H I S E @ B O C O N C EPT.COM I BOCONCEP T.COM / F RANCHI SE

LEADERSHIP

PHIL CRAIG

LASER PLUMBING

A

bout eight years ago Phil Craig had a problem with his business.

He calls it the “what’s in it for me?” problem. The resolution came in the shape of a local charity and youth organisation.

Craig and his staff started working with the group in Vermont, Victoria, then staff members became really engaged realising how they could become involved and give back. This led to the formation two years ago of the Backyard Blitz. This involves family and tradesmen helping landscape the backyard of a family in need. One backyard a year is picked for a makeover.

“Our staff members really enjoy doing it and says it is the best day of the year,” says Craig. Both families that have been helped through the Backyard Blitz so far have special-needs children and are “great givers of time and resources to the community”.

The Backyard Blitz recipients say they were very humbled by the experience, and stay in contact with Craig and his team.

The franchisee says he is looking how to achieve greater results every year and has introduced giving as part of staff induction – new employees have a choice to donate weekly from their pay.

“It is really good for the staff to have focus out of work and help and give back

to the community,” says Craig. In fact, some employees have taken their commitment a step further and joined local charity boards.

“We love what we do and we love supporting the community,” says Craig, who has always had a focus on social responsibility and has been supportive and driven with the great work done at a group level.

“Personally we can always get involved and can give internationally, but it's better for us to make a difference locally,” he says. Seeing the impact is important for Craig and his staff members, and they plan to keep looking for bigger and better ways of making a difference. n

“

It is really good for the staff to have focus out of work and help and give back to the community.

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LEADERSHIP

ROB MIHALIC, SNAP

“

It is great to be involved in the community and show that we are happy to support the locals.

C

ommunity giving is very close to home for Rob Mihalic. The franchisee of the Snap print, design and website franchise in Homebush, in Sydney’s west, is a big supporter of the Transplant Australia Football Club, a group of people who have had life-saving transplants and want to continue playing football.

They play games to raise awareness for organ donations, and Mihalic contributes money to the club and sponsorship for its shirts.

He is a private person and doesn’t enjoy the spotlight when it comes to his charitable work. Mihalic was born with the primary sclerosing cholangitis condition and ended up needing a transplant himself. He found out about the condition when he was 21 and managed the illness for a while, but it became increasingly worse and turned into an emergency situation. He was 35 when he had the transplant.

Already a franchisee at the time, he says the franchisor was incredibly

supportive and always ready to help if the team needed anything. “The franchisor is very supportive about community work. The company tells us it is a good idea to become involved in the community, and we run things by them to get advice,” he says.

“They also give us freedom to support the causes we feel strongly aligned with.”

Mihalic also gives to the Royal Prince Alfred Hospital Transplant Institute and supports local communities with free printing and movie nights. He also supports Newington Soccer Club with free printing and artwork. “It is great to be involved in the community and show we are happy to support the locals,” he says.

His community involvement has boosted brand awareness; people recognise the brand and understand what Snap Homebush stands for, he says.

Having been ill and received support from the community himself, Mihalic feels strongly about giving back to those who helped him when times were tough. n

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Bev

Taylor

2017

R WINNE AWARD

InXpress Franchisee

Winner 2017

Jason

“I love that for a relatively small investment I can build a strong business from day one. InXpress gives me a strong return on investment and the freedom and flexibility to live the lifestyle I enjoy”

Franchisee of the Year 2017

Hand

2017

R WINNE AWARD

“InXpress is a global business model which allows me to grow a great business, and provide my customers with real savings and service. However one of the best parts is that as a business owner I am able to manage my day to spend valuable time with my family and build a future for my children” InXpress Franchisee

Winner 2017 InXpress Top Gun 2017

AWARD WINNING FRANCHISE OPPORTUNITY FORGET THE DAILY 9-5 GRIND AND BUILD YOUR BUSINESS WITH INXPRESS LIMITED OPPORTUNITY! Now you can join one of Australia’s fastest growing franchise businesses and capitalise on one of the fastest growing industries - freight and logistics. Opportunities are now available across Australia to build your InXpress business. If you are career minded and dedicated to building a successful business in your local market now is the time to join InXpress.

Get the lifestyle you have always wanted with a proven business model, full training, mentoring and support.

InXpress is a unique global online shipping company, with a fully integrated web based customer shipping system offering a huge opportunity to grow a thriving business, with minimal risk and a relatively low investment.

Operating in 14 countries with over 360 franchisees globally, InXpress is now accepting applications to grow the Australian business.

An InXpress Franchise offers you state of the art training, world class support and all of the tools you require to successfully tap into this massive global market.

BENEFITS INCLUDE: Low entry costs Low risk No inventory, warehousing, vans or trucks No employee base High residual income Unlimited income potential For more information on joining the InXpress Franchising Team Call David on 1800 220 643

GLOBAL REACH WITH A PERSONAL TOUCH 1800 220 643 | sales.au@inxpress.com | inxpress.com.au

LEADERSHIP

“

I believe it’s important for us as franchisees to give back to the communities in which we work.

CHAD CABLE , DOMINO’S

C

had Cable is a young and successful Domino’s franchisee in Canberra with a love of pizza and a commitment to community engagement through a broad range of charitable activities. For starters, every year he donates hundreds of pizza vouchers to local sporting clubs and school fetes.

Cable has started supporting Music Kick-Start, a social enterprise project that combines both music and business to help launch the career of disadvantaged musicians. He provides the group with pizza for their weekly meetings.

Cable and his team have also participated in Relay for Life Canberra,

part of a global event, helping raise funds for Cancer Council ACT. Not only did Cable compete, but he also provided “tasty sustenance” to participants who walked or ran in a non-stop relay for 24 hours and camped overnight. As well as that, the outlet donated $1 from every pizza sold at the event.

The funds raised from Relay for Life will help Cancer Council ACT continue its work in research, prevention, information and support services, and the franchisee says he would love to work with the organisation again.

“Having Domino’s stores across ACT and New South Wales means we’re fortunate to able to provide pizzas and support to many community groups in different areas,” says Cable. “I believe it

is important for us as franchisees to give back to the communities in which we work.”

Domino’s has a program called Give for Good, which supports education and youth initiatives, disaster relief and preparedness, food and sustainability, and leadership and entrepreneurship.

Cable believes the program will make a really big difference in these areas over the next few years.

Meanwhile, with expansion ahead for Cable and his business partner, he says it is more important than ever to be more involved in local communities. “That connection and rapport is important for building a mutual relationship and giving back to the people who have helped us along the way.” n

MAY/JUNE 2018 | 54 | 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.

MAY/JUNE 2018 | 55 | WWW.FRANCHISEBUSINESS.COM.AU franchise.cheesecake.com.au

EXPO

PERTH EXPO Don’t miss this one-day event.

Sunday May 6, 10am to 5pm The Astral, Crown Perth, Burswood, WA

TAKE CONTROL

OF YOUR LIFE You’re ready to look at exciting new options for your future and a visit to a franchise expo will help you clarify your goals.

T

hink franchising and what comes to mind is likely to be the big name food retail chains such as McDonald’s and KFC, or a mobile service business such as Jim’s Mowing that’s in every neighbourhood. But in a dynamic small-business sector with an estimated annual turnover of more than $170 billion, there is so much more to this business model.

Franchising is one of the most popular and profitable ways to start or grow a small business. And it makes sense that building your own business by leveraging the brand power, systems and processes, and marketing expertise of a tried-and-tested business can give you a head start.

Buying a franchise gives inexperienced individuals, couples or

partnerships a route to business ownership.

The Perth Franchising & Business Opportunities Expo is a one-day annual event, a power-packed line-up of experts and brands.

Think established household names..

Aussie, Bakers Delight, Croissant Xpress, Jim’s Group, Jesters, Poolwerx, Signarama.

Think emerging brands… KX Pilates, Laser Clinics Australia, Soul Origin.

Perhaps you’re looking for overseas inspiration...try Jon Smith Subs, TaxAssist Accountants or Tutor Doctor, or you want to discover more about professional services opportunities - look at brands such as The Alternative Board, Tax Store and Vivid Financial Planning.

Are you keen to learn about the diverse mobile businesses showcased? The line-up includes Drug Safe Communities, Fox Mowing & Gardening, GroutPro, In the

Booth, Krazy Keys, Oxworks Franchising and Wheel Change U Mobile Tyre Shop.

If you want to dip your toes into the retail arena look at Experimac, HolidayXP, Mail Boxes Etc, Minuteman Press.

In addition to meeting franchisors and some franchisees, visitors can also attend free seminar sessions run throughout the day.

The Franchise Council of Australia will run one panel session in which franchisees share their stories and reveal the challenges and benefits of being a business owner.

Why not find out more at the expo?

Inside Franchise Business readers can get a free ticket to the event by registering online before the expo and using the code FMG. n

MAY/JUNE 2018 | 56 | WWW.FRANCHISEBUSINESS.COM.AU

INDUSTRY SPOTLIGHT

Nene's Chicken MAY/JUNE 2018 | 58 | WWW.FRANCHISEBUSINESS.COM.AU

Winging it

As growing numbers of consumers seek healthier options in convenience foods, chicken-based fast-food outlets need to ensure they maintain their place in the pecking order.

By Gali Blacher

A

ustralians love chicken and a good burger, but with a rising awareness of healthy eating, takeaway shops need to innovate if the fast-food chicken industry is to maintain its modest growth of the past five years.

Analyst Samuel Johnson in the IBISWorld report Takeaway Chicken Shops in Australia says that while consumers love a chicken treat, they are enjoying healthier alternatives.

Strengthening competition among fast-food companies has constrained industry expansion, says the report. Despite this, the demand for convenience food has grown, with consumers not having time to cook at home.

Industry revenue is forecast to grow at an annualised 1.7 per cent over the five years through 2022-23 to reach $3.9 billion.

Meanwhile, growing health consciousness is likely to turn consumers away from high-fat chicken products toward healthier options.

Over the next five years, larger fast-food brands are expected to respond to changing consumer tastes. IBISWorld analyst Bao Vuong says takeaway chicken chains will look to improve their image by offering

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INDUSTRY SPOTLIGHT

Chicken bites:

• The total all-in cost of setting up a typical NeNe Chicken outlet ranges from $450,000 to $600,000, depending on the store size and fit-out • The franchise term is five years • The royalty is 6% and the marketing levy 2% of the total sales

Nene's Chicken

healthier options and focusing on grilled rather than fried chicken. They may also offer more salads.

However, in the face of consumer perceptions that fast-food chicken is not healthy, major player KFC is likely to run into difficulties with its image and could struggle as consumers seek options considered more healthy.

Vuong also says an expected rise in discretionary income will support industry growth. Although higher discretionary income can lead some consumers to spend on more expensive restaurants, it also encourages households that cook most meals at home to visit inexpensive outlets like takeaway chicken shops. The demand for fast food is also projected to stay strong because of its affordability and convenience.

Rising awareness of dietary health and nutrition has weakened demand for products with high fat and salt content, says the report.

In response to this, industry players have expanded their product range to incorporate healthier alternatives. New menu options and the expansion of major store networks have helped drive industry revenue growth.

Chicken franchises in Australia are expanding their networks rapidly, and there is plenty of opportunity for potential franchisees wanting to take a bite into a chicken franchise.

Here are some of the leading contenders:

NENE CHICKEN NeNe literally means “yes, yes” in Korean, and the chicken shop is all about offering chicken so scrumptious it makes customers scream a big loud “Yes!”, the company says.

Its philosophy is about being happy and paying it forward, and this mantra has helped

Nene's Chicken

MAY/JUNE 2018 | 60 | WWW.FRANCHISEBUSINESS.COM.AU

success I N G R E D I E N T S

F O R

YourPeople YourTeam YourPotential

This year, the National Franchise Convention is putting the focus on the most important ingredients for franchising success: your people.

Because at the core of any successful franchise are happy and profitable franchisees, satisfied and engaged customers, enthusiastic and motivated head office staff and a focussed, responsive and innovative leadership team.

Visit www.nationalfranchiseconvention.org.au for more information.

To find out how you can be a part of NFC18 as a sponsor or exhibitor, contact Peter White on 03 9508 0811 or peter.white@franchise.org.au

MELBOURNE 14-16 OCTOBER 2018

INDUSTRY SPOTLIGHT

the chicken franchise grow to more than 1100 outlets in South Korea alone. The chain made its debut in Australia in 2015 and has expanded to 12 outlets nationally with two under development. The brand chose to franchise as it wants to share the “classic taste of Korea” with as many Australians as possible.

“Franchising allows us to create a formula for growth that we can share with all our franchise owners that gives them the opportunity to make dreams come true,” says NeNe Chicken marketing and international liaison manager Yealim Kim. “We believe the key difference we bring to the game is our genuine desire for all our franchisees to feel like they are a part of the NeNe family. We are all in it together, meaning we can focus on our customer enjoying the NeNe experience while also making sure our franchisees are successful.

“Importantly, our marinade, batter mix and sauce coatings are all imported directly from NeNe Chicken Korea. This creates a brand authenticity and an edge over our competitors.”

Above all else, the brand values trust and honesty with all franchisees. “We make sure they are aware of everything that is happening in the business, and they keep us in the loop of everything happening locally,” says Kim. “This is why we think we stand out to potential franchisees. It’s those little extra elements of trust, given both ways, that make a difference.

“For example, the outlet lease is held by franchisees so they have the assurance the business really belongs to them, something that many of our competitors won't do. We also negotiate with our suppliers to reduce prices. As we have more franchisees joining our network, our bargaining power increases and supplier prices drop.”

He also says the franchise works hard to create a profitable and sustainable business model for franchisees, ensuring the model allows for a consistent return on their investment.

NeNe’s chicken combines “bold” seasoning, farm-fresh chicken and a variety of sauces imported from Korea.

“We also say the crispy batter makes it

Taking our brand internationally has always been a key focus. better,” says Kim. “Our secret formula reduces oil absorption, which keeps the chicken juicy and moist on the inside but crispy on the outside – just how our customers want it.”

The franchise provides a grand opening marketing plan to make sure franchisees impress their target demographic, and also provides ongoing and continuous marketing support. “We use a multipronged marketing strategy that involves a blend of traditional and social-media advertising to keep our brand exciting and relevant to our target audience,” says Kim.

REFRESH YOUR CAREER! Join the Freshii revolution!

Are you passionate about fresh, healthy, delicious and affordable fast food?

Want to be part of a unique and fun global brand? Then we want you!

Freshii is one of the most exciting and fast growing new franchises in Australia, with opportunities available now in prime CBD and urban locations across the country.

• • • • • •

Franchises start at just $160,000 Low fees and royalties, fixed marketing fees Financing options available from 0% deposit (STA) Flexible supplier agreements Uncapped earning potential No experience necessary - we can support you with training, marketing and site development

To apply, or find out more, get in touch at franchise@freshii.com.au or visit freshii.com.au/franchising WH72363

*

T&C’s apply. All applicants will be reviewed on an individual basis.

MAY/JUNE 2018 | 62 | WWW.FRANCHISEBUSINESS.COM.AU

NeNe’s system has a blend of company-owned and franchisee-owned outlets – five in Victoria and Western Australia, one in Brisbane and one in Sydney. The company will also have openings in Glen Waverley, Victoria, and Darwin this year.

OPORTO Oporto’s story starts in 1976 when, at the age of 18, Antonio Cerqueria migrated to Australia from Portugal.

Ten years later, knowing that no-one was serving flame-grilled chicken as was common in Portugal, he decided to open a chicken shop in Sydney’s North Bondi serving the peri peri style of chicken with the now famous chili sauce. The philosophy was quite simple: to provide unique, simple and delicious food to friends.

Cerqueria built a loyal following, and in 1995 the first Oporto franchise opened in Balmain. By 2003 there were 50 stores, and in 2005 Oporto was named by BRW as Australia’s

fastest-growing food franchise. By 2007, Oporto had 98 stores across Australia and New Zealand.

Robust technology, systems and tools support franchisees in their day-to-day business, as well as a dedicated support team. The founder’s strict insistence on high standards of freshness and quality has helped give Oporto’s “fresh-not-frozen, grillednot-fried” chicken and burgers a point of difference, and his involvement continues even though the business has become part of the Craveable Brands portfolio.

As well as continuing its Australian expansion, the brand is going international too.

“Taking our brand internationally has always been a key focus,” says Oporto CEO Craig Tozer. “Having found the right master franchise and supply partners, we are excited to announce that Oporto will be expanding into Asia, with the first restaurant about to open in Singapore.”

He says the brand has spent many months in the market doing qualitative

and quantitative research, “and the company’s local expertise gives us confidence". Oporto has partnered with global financial services business Aura Group in Singapore with the goal of opening three outlets this year and 10 over the next five years. Aura Group works across Singapore, Sydney, Melbourne, Bangkok and Hanoi with a focus on corporate advisory as well as funds and wealth management.

Tozer says the group also has extensive hospitality experience and has investors who own supply businesses in Asia. “This gives us an understanding of the local challenges and inherent risks of working in a new country,” he says.

Chicken bites:

• The franchise term is 10 years • Royalty fees are 5%; marketing fees are variable across states

Have you noticed that all laser clinics look the same?

Unique Laser is different. Very Different. fr a n c h is in g

nOW

UNIQUE LASER IS REVOLUTIONISING THE BOOMING AESTHETIC INDUSTRY

• Unique business model that reduces initial investment and increases profitability • Investment required $100k-$450k – up to half that of competitors • Exclusive rights to superior technology • Different branding • Excellent training, support and medical supervision Do not invest in another laser franchise before speaking to us.

Contact: Sarah Oram 0439 094 068 franchising@unique-laser.com.au

w w w. u ni qu e - l a s er.c o m.a u MAY/JUNE 2018 | 63 | WWW.FRANCHISEBUSINESS.COM.AU

INDUSTRY SPOTLIGHT

Red Rooster

RED ROOSTER Red Rooster founder Peter Kallis’ father and grandfather migrated to Australia from the Greek island of Kastellorizo in the early 1900s. They lived a simple and tough life in Perth focusing on the family business, a fish and chips shop. This was the start of the Kailis family empire.

When two acquaintances from Adelaide came seeking investment to help expand their chicken business, Kailis spotted a business opportunity.

This led to Red Rooster launching in 1972, with the first restaurant being built in Kelmscott, WA. Soon there were four Red Rooster restaurants – without any advertising, just word of mouth. Kailis sold the company to Coles Myer in 1992, when the network had grown to 80 outlets.

He continued to work with Red Rooster, guiding the brand for about another five years. Since 2007 the brand (along with Chicken Treat and Oporto) has been owned by private equity. Last year the holding company Quick Service Restaurant Holdings was re-named craveable brands.

Franchisees are regarded as incredibly important to the company’s success, and for franchisees, passion is vital, says Craveable Brands.

“Franchisees need passion for the brand and passion to succeed. Mix passion and customer-centricity with understanding business insights, a commitment to succeed and dose of hard work, and you have a future franchisee star in the making,” says Sean O’Connor, craveable brands, general

manager franchising.

“Through our ongoing training programs we can help franchisees improve all other business aspects, but we can’t teach them passion or people skills.”

With the food industry constantly changing, Red Rooster believes it is vital the business continuously evolves. “Through our technology advancements, as well as our food innovations and store designs, we ensure we stay relevant to our customers,” says O’Connor.

Red Rooster has robust plans which it says it shares with potential franchisees. “This combination of historical results and upcoming plans allows us to bring in a good flow of candidates,” says O’Connor.

As Red Rooster plans expansion across drive-through and shop-front restaurants mainly in New South Wales and Victoria, it is seeking franchise candidates with a proven track record in business and people skills. n

Chicken bites:

• The franchise term is 10 years • Royalty fees are 5%; marketing fees are variable across states

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INDUSTRY SPOTLIGHT

FAST & FURIOUS The quick fix is a popular choice in gyms and fitness studios across Australia, and franchise chains are embracing this need for speed.

F

itness franchises are maximising the business potential offered by a short, sharp exercise routine. While there is a strong trend toward high-intensity training, some boutique gyms favour a more gentle approach.

Australia has seen the 24-hour gym trend flourish over the past few years. The smaller footprint of the model has made gyms accessible, and the budget offers attract both customers and franchisees.

Diversity has been central to growth in the market lately, with traditional full-service gyms at one end of the spectrum, budget 24/7 gyms at the opposite end, and a host of niche studios and gyms with specific fitness themes filling gaps in the middle. The fitness sector has become a mature marketplace, facing a slowdown in growth.

IbisWorld’s Gyms and Fitness Centres in Australia November 2017 report is predicting a 1.5 per cent growth in the market until 2022-3, a contrast to the current growth expectations (from 2012 to

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INDUSTRY SPOTLIGHT

this year) of 7.5 per cent.

Report author Lauren Magner says market saturation is expected to be a significant contributor to putting the brakes on revenue growth. She says niche gyms catering to all segments of the population have already reached most consumer markets, so memberships are unlikely to grow substantially.

These include full-service, women-only and budget 24-hour gyms.

Magner says a shift from full-service to cheaper 24-hour gyms is also projected to slow revenue growth.

“However, this trend should be partially offset as the ageing population becomes more familiar with gyms and drives demand for full-service gyms offering group fitness classes.

“Single-visit programs such as Medibank’s GymBetter will also potentially slow revenue growth as infrequent users scale back costs to pay per-visit fees.”

According to Fitness Australia, more women than men participate in fitness/ gym activities. In fact, it shows that the category had the second-highest participation rate (17 per cent) after walking for exercise.

The organisation’s Profile of the

Fitness Industry 2016 indicates an ageing population is a key trend in Australia’s demographic profile, with the seniors group (65 years plus) a strong contender for growth over the next decade, set to represent more than one-fifth of the population older than 15 years by 2025.

In contrast, it expects a decline in the 18- to 24-year-old age group, currently dominant in the fitness/gym arena, as a percentage of the population older than 15 years by 2025.

If Australian participation in fitness/gym activities is maintained at the growth seen in 2016, the report suggests that about 3.6 million Australians will be active at the gym or in fitness programs in 2020, lifting to about 3.9 million in 2025.

What is driving this industry performance? IbisWorld suggests health consciousness, the number of hours worked each week on average, the real level of household discretionary income, consumer sentiment and obesity levels.

When it comes to being active, consumers can be fickle, always seeking the latest innovation and trend. Here are some options to note:

ORANGETHEORY FITNESS Group interval training has become increasingly popular in Australia and is a trend that is likely to stay, says Orangetheory Fitness Australia GM Elie Medina. The main reason she says, is the efficiency factor. “In today’s fast-paced environment we are all increasingly time poor, and we’re seeking the most efficient and effective way to incorporate fitness into our busy schedules. This style of training offers maximum results with minimal time, catering for everyone from executives through to stay-at-home parents.

“It takes the guesswork and hassle out of training so people can make fitness an effortless part of their regular routine.”

Medina says Orangetheory workouts are scientifically developed so participants work at their optimal level for maximum calorie burn, both during their session and for up to 36 hours afterward.

“We’ve taken the fun and motivation of a group training session and combined this with the scientific evidence behind training based on heart rate. The result is a smarter workout driven by results that ensures participants gain the most from a

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one-hour session.”

She says each workout is scientifically developed and approved by the company’s medical advisory board.

“We’ve had a great response to the brand in Australia with eight studios open and a further 12 locations set to open by the end of this year,” says Medina. “We are a global brand with more than 900 studios worldwide.”

CURVES Curves was a pioneer when it opened in 1992 offering as a speedy fitness option a 30-minute full body workout specifically for women.

Little has changed about the core offer: a half-hour program equates to two circuits of hydraulic resistance equipment, 30 seconds at each station, with 30 seconds of recovery in between.

Curves has not stood still, however.

Five years ago the global business introduced a new generation of machines all designed for the female body. The recovery breaks are now more prescribed, incorporating yoga elements for instance.

The programs can be undertaken at any time, starting from any machine.

In today’s fast-paced environment we are all increasingly time poor, and we’re seeking the most efficient and effective way to incorporate fitness into our busy schedules.

Personal trainers are available to coach users through the program, ensure correct and appropriate use of equipment, and encourage maximum effort.

Curves Australia GM Selina Bridges says the brand attracts many women who are fearful of or not attracted to traditional gym environments. “Curves is welcoming and safe. There is no judgement.

We have customers from 13 to 90 years old, but most are 45-plus. That is slightly

younger than a few years ago.”

Bridges says gym locations and the age of trainers play a significant role in attracting certain demographics. “Our research shows we can be successful in shopping malls and standalone sites in metro or regional areas. The rent will have a big part to play, and the owner is key. A franchisee needs a passion for health and wellbeing, and to understand how to build a business.”

If you are looking for a change, are passionate about water safety and enjoy working with children, this could be the opportunity you have been looking for!

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INDUSTRYSPOTLIGHT

Curves Australia GM Selina Bridges

Core+

A recruitment process helps identify the right franchisees, say Bridges. Women are inevitably attracted to the franchise, but more couples are now embracing the the concept. “More husbands and wives are coming in to the system, and we get a blend and different perspective.”

Bridges says owner-operators need to count a pay packet for themselves into their business plan. Fitness qualifications are not essential, but as part of the induction process franchisees undertake special training for qualifications, and Curves works with TAFE to fill in the gaps.

Personal trainers have a five- to 10-year career path laid out, says Bridges. “Our concentration is on helping our network grow, and the franchisees’ success comes from helping those who want to be engaged.

“We are always looking for new owners, but it is a slow burn process, six to nine months,” says Bridges. “A healthier network attracts organically. Our focus is internal, giving our clubs a stronger foundation.”

Royalties and fees from franchisees are ploughed back into the business to provide marketing, business, customer and system support.

Bridges cautions against franchise buyers aiming for high client numbers because these can be accommodated only in a shopping centre, which attracts a high rent.

Curves does not become involved in property (site choice or lease negotiation), referring franchise buyers instead to a leasing expert. The starting investment

Speedfit price for a franchise is $80,000, which includes a $40,000 franchise fee, training, the operating system and equipment. Flexible payment terms are available.

CORE+ Right on track with one of the top trends for this, yoga, Core+ is a contemporary spin on traditional poses.

Yoga’s capacity to reinvent itself has allowed it to retain its popularity, suggests the Worldwide Survey of Fitness Trends

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for 2018, published by the American College of Sports Medicine’s health and fitness journal.

Spotting a trend for shorter, sharper fitness sessions, Michael King saw an opportunity to develop a fusion model.

His concept is classes delivering yoga-style exercise in 45 to 50 minutes rather than the traditional 90-minute sessions.

“We started out with 90-minute sessions, but people could not attend several times a week. Now we offer a maximum one-hour class, and most are 45 to 55 minutes, specifically at

INDUSTRY SPOTLIGHT

lunchtime.”

Mixing up the exercise styles means Pilates moves are taught incorporating hand weights and on a reformer bed.

“It’s traditional apparatus but almost a choreographed class,” says King.

Two new classes have been introduced into the Core+ fitness menu. Guns, buns, tums and cardio is a single class that provides a full body workout with cardio intervals to raise the heart rate. “It is 50 minutes with a good soundtrack. The music is a huge element of the classes – everyone has a curated playlist,” says King.

Another class, developed with a Hollywood celebrity trainer, is dance cardio. High levels of co-ordination are not needed for practitioners to benefit from the workout. King believes the variety of the boutique offer provides something different to other gyms and studios.

In the three years it has been trading, Core+ has opened two corporate studios and turned to the franchise model last year. In seven months of franchising, the business is almost at eight units and expects to reach a network of 12 outlets this year; it may achieve a dozen studios just in Melbourne, says King.

The latest outlet to be signed up is on the ground floor of a low-rise tower at

Essendon Fields. The franchisees, Core+ trainers for two years, will be adding an Ascot Vale site to their business to take it to a super-territory, he says. King expects interest in Sydney to develop following an expo in the city.

A boutique studio costs between $200,000 and $350,000, depending on site size and location. This includes fitouts, franchise fee, set-up costs and training. However equipment leasing is a separate cost.

SPEEDFIT Wearable technology is popular in the fitness arena, and is the third-biggest trend this year [see opposite]. Australian consumers, comfortable with smartphones and watches, track their exercise progress using wearable devices, so it is a short step to turn to technology to ensure maximum efficiency for their weekly workout.

This is why fitness models such as Speedfit are so appealing, says founder Matej Varhalik.

The German technology that informs this program has been trending in Europe for 10 years and is now used across 2000 gyms and growing.

“People were sceptical, but then they saw it worked,” he says.

With as much as 70 per cent of the population not gym users, there is plenty of potential for a program that cuts back the weekly exercise regime to just one 20-minute session. Speedfit customers wear special fitness suits that deliver nerve activation to boost the efficacy of the exercise routine. Two clients at one time are monitored by the trainer.

This suits potential customers who might be avoiding gyms because they are injured, dislike a traditional fitness environment, have concerns about their body shape, are elderly…

“We are all trying to fit everything into 24 hours, we’re conscious about what we eat, but there are stresses and pressure. This is a chance for people to spend time on themselves,” says Varhalik. “We need to be fit to be better at home and at work.”

Clients prefer to pay more for a better experience, he says, whether it is choosing organic food or a fitness routine.

For franchisees, this is an affordable route into the fitness arena without a big financial commitment needed for sites and equipment to set up the 24/7 gyms.

“I explored plenty of other franchise models, but Kwik Kopy’s tried and tested system continued to come out on top.”

- Dan McKenzie, Kwik Kopy Miller Street

Owning a Kwik Kopy franchise is your chance to be part of the success story.

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kwikkopy.com.au MAY/JUNE 2018 | 72 | WWW.FRANCHISEBUSINESS.COM.AU

Investing in a Speedfit franchise will cost between $200,000 and $240,000 for a five- or seven-year agreement. Franchisees pay a 7 per cent royalty, and a marketing levy of 6 per cent.

Varhalik says personal trainers can run their own franchise, but because the program is detailed they need to be certified fitness instructors.

Based on word of mouth, the business grew from its original studio to the current line-up of seven studios. Experience has shown Varhalik that studios are successful in a variety of sites, with a diverse demographic: visible ground-floor spaces, firstfloor locations, city sites, suburban venues, professionals, elderly clients, younger mums.

He is now working with a team to firm up a location strategy and will be introducing a consumer campaign for the brand.

There is plenty of potential for growth, he says, citing the German city of Munich which has a population of nearly two million people and has 250 studios similar to Speedfit.

He says the brand’s competitive edge is a high level of service: customers take nothing to the studio as Speedfit provides the exercise bodysuits, grooming products and a towel for the shower. n

Fitness future Only about 7 per cent of Australians use fitness venues. That leaves a significant majority as potential clients, but how best to attract new business?

The American College of Sports Medicine’s Health & Fitness Journal publishes an annual guide to the top 20 trends. In its latest report, the Worldwide Survey of Fitness Trends for 2018, author Walter Thompson says there is a clear distinction between fads and trends, with rends reflecting a longer-term change in the way people behave.

The report lists the top 20 fitness trends as: 1. High-intensity interval training 2. Group training (more than five people) 3. Wearable technology 4. Body weight training 5. Strength training 6. Educated, certified and experienced fitness professionals 7. Yoga 8. Personal training 9. Fitness programs for older adults

10. Functional fitness 11. Exercise and weight loss 12. Exercise as medicine 13. Group personal training (two to four people) 14. Outdoor activities 15. Flexibility and mobility rollers 16. Licensing for fitness professionals 17. Circuit training 18. Wellness coaching 19. Core training 20. Sport-specific training

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INDUSTRY SPOTLIGHT

SAFE &

SOUND

Keeping a cap on infrastructural risk in business has growing challenges, but it is also providing solid opportunities in franchising.

I

ntegrating IT across business sectors is a huge challenge, but will result in massive change, says Appliance Tagging Services GM Sarah Allen. While the exercise places extra demands on the safety sector, she says it will lead to reduced risk through the automation of repetitive tasks.

“But there is increased risk with the trend to work from home – how does an organisation control workplace hazards at home? – and increased risk

with stresses associated with blurred work/life balance.”

For an insight into safety and the workplace, Inside Franchise Business talks with Allen and SafetyQuip CEO Gary Shearer. SafetyQuip covers the full scope of workplace safety supplies and services, with mobile units backed up by a counter-sales base and distribution warehouse. Test-and-tag business Appliance Tagging Services works throughout Australia to provide electrical safety assessments, as well as testing and reporting management systems.

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FRANCHISE INDUSTRY SPOTLIGHT BASICS

WHAT ARE THE MAIN OBSTACLES YOUR BUSINESS HAS TO OVERCOME?

Sarah Allen

SARAH ALLEN: We continually put the customer at the centre of our business decisions and have always invested in technology and upgrades to testing equipment and processes so as to stay ahead of the curve. Our customers demand service transparency and real-time reporting so they can satisfy their own work health-and-safety obligations.

GARY SHEARER: We believe that supporting start-up franchisees is more important than growth, so that limits us to taking on two franchisees a year. We regard as equally important the growth of existing franchisees. Our 13 present franchisees will turn in more than $20 million this year.

GARY SHEARER: We are about to roll out a new recruitment program with a more defined target profile.

SARAH ALLEN: Some of our franchisees have seen enormous growth in fire-safety services already. Electrical- and fire-safety services are complementary, and our platforms for both are exclusive to ATS and Australia.

Our franchisees have found that approaching their client base about adding fire services has been incredibly beneficial to their business.

WHAT ARE YOUR GROWTH PREDICTIONS FOR YOUR BRAND FOR THE NEXT FIVE YEARS?

Gary Shearer

extra service has the potential to double our business in the next five years.

SARAH ALLEN: The fire safety component of our business has really taken off. While we will always be an electrical safety company that also provides fire-safety services, rather than a fire company that does electrical, this

HOW DO YOU PLAN TO ACHIEVE GROWTH?

GARY SHEARER: Hopefully our new recruitment program will reward us. The fact we are not retail or food, and that we position ourselves as far away from

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shopping centres as possible, will also have appeal.

For existing franchisees to grow, we just need to consistently deliver our support programs. Ten months of significant group growth in revenue year on year suggests we’ve got it right. I don’t believe in tampering with something that is working, other than tweaking.

HOW DOES FRANCHISING BENEFIT THE BUSINESS?

ARE REGULATIONS HAVING AN IMPACT ON YOUR BUSINESS? SARAH ALLEN: Our electrical- and fire-safety services are governed by the Workplace Health and Safety Regulations, Electrical Safety Regulations, Building Regulations and Australian Standards. While the Model Work Health and Safety Regulations are being reviewed to ensure they are achieving the objective of the Model WHS Act, we don’t foresee any major changes likely to have an impact on the regulatory framework associated with our services.

GARY SHEARER: The Vulnerable Workers Bill has involved us in a lot of

extra work but has been for the better.

It is comforting to know that franchisees are looking after their employees.

They are equally important to the business. Likewise, a complete review of our cyber security has involved many man-hours but will only make us stronger and more robust.

SARAH ALLEN: The ATS model ensures that as a network we are capitalising on all business opportunities. The support office is firmly focused on securing national clients, and our franchisees are focused on securing clients in their local designated marketing area. Our franchisees can also provide personal consistent service to our clients around Australia.

GARY SHEARER: We are passionate about franchising and the brand. I doubt I would have grown the business to the size it is without franchising.

WHAT IS THE BIGGEST ADVANTAGE FRANCHISEES GAIN FROM JOINING THE NETWORK? SARAH ALLEN: Our continued investment in technology and equipment sets us apart from sole operators and similar service providers. Also, ATS has an established ‒ and growing ‒ client base of national organisations, and our franchisees have access to service this client base.

GARY SHEARER: It is simple. It has taken me 20 years to build our brand.

Does anyone want to go through this themselves?

WHAT MAKES AN IDEAL FRANCHISEE? SARAH ALLEN: Our ideal franchisee is focused on customer service, is a great communicator and has a passion for safety.

There is no need to be an electrician.

GARY SHEARER: Being passionate about safety, passionate about our brand ‒ someone who understands distribution and is willing to harness all four sales channels. n

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FRANCHISE BASICS

NO NEED FOR

NEGATIVITY

Franchising is an economically interdependent partnership and franchisee profitability must be the key concern for franchisors.

BRUCE BILLSON Executive chairman, Franchise Council of Australia

A

s a business sector, franchise networks thrive thanks to the individual efforts of hard-working franchisees – a core belief of the Franchise Council of Australia which represents the nation’s franchising industry. Sadly, in recent months this message has been obscured in mainstream media coverage of this economically vital sector.

Setting up franchisees with systems and tools to be sustainably profitable, happy, MAY/JUNE 2018 | 78 | WWW.FRANCHISEBUSINESS.COM.AU

competitive in a dynamic economy, well-supported and successful are also the primary goals of any good franchisor running a full-service model.

All in all, the proposition is simple: the franchisee is the “prime customer” and therefore constitutes the most important business relationship for the wise franchisor.

Success in a franchise relationship involves both parties, with particular

than their franchisor. At base level, the commercial reality is that a franchisor needs its franchisees to be profitable.

Franchising is an economically interdependent partnership: the franchisor provides the right to market and provide certain goods or services, and to use the business name for a fixed period of time, while the franchisee provides the financial capital and human resources to establish and run the individual business unit.

NOT PROHIBITIVE Franchisors earn income from franchisees in two main ways. Firstly, there is the upfront fee paid by franchisees when they buy into the system. This is designed to cover the cost of recruitment, training and support provided by the franchisor.

Good franchising practice dictates that these fees are not charged at a rate prohibitive to attracting good franchisees into the network, but to support suitable franchisees in establishing a profitable business that will deliver mutual benefits.

Secondly, a franchisor usually charges ongoing royalty fees, which may be levied as a percentage of the franchisee’s turnover, which may vary as trading conditions change, or as a flat monthly fee. These royalties are designed to pay for the franchisee’s use of the franchisor’s intellectual property and business systems, and are a franchisor’s primary revenue stream.

It is important to note that no two franchise systems are likely to have the same royalty or fee structure, but in common franchisee profitability is the key to the franchisor’s ability to generate their own ongoing revenue stream.

While the recent media reports focused on failed franchisees, they involved brands that have many successful franchisees. The powerful lesson here is that franchisee profitability must be top priority for franchisors.

BENEFIT NOBODY weight on the shoulders of the franchisor for “enabling” the enterprise and leading the collaboration, as well as mentoring the franchisee. For someone to take on a franchise they need to do due diligence, draw on their business acumen, trust and be optimistic. After all, they are often investing their life savings in a franchisor to draw on the know-how, integrity and strength of the franchise network.

Australia has nearly 80,000 franchised business units, and no-one should be more invested in each and every franchisee’s profitability and success

Unfortunately, the reputational damage that can be caused by persistent, negative media coverage of unhappy and unprofitable former franchisees is huge and can impact the prospects of successful franchisees across the network. There can be a drop in revenue at individual franchise businesses, and it can make it difficult for a franchisee to obtain the best sale price for their businesses as part of a planned exit strategy. Such outcomes benefit neither the franchisor or franchisees in the network.

Conversely, successful and profitable franchisees are the best brand advocates

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a franchisor can have. And there are many, many thousands of everyday Australians who, with the support and systems of a franchisor, turn a franchise unit into a successful business.

A good example is Kwik Kopy franchisee Dan McKenzie, who is finding success following in the footsteps of his father and uncle who also owned franchises with the brand, while his wife Theresa is running a Jim’s Pet Grooming franchise.

“When we first bought the Kwik Kopy Miller Street franchise, it was ranked last out of 100 centres. Within four years we have been able to turn the business around,” says Dan.

AWARD WIN In that time he has almost quadrupled sales for his business and been named the Kwik Kopy Franchise of the Year. He has just received recognition from the Franchise Council of Australia as a New South Wales/ACT winner in this year’s franchising awards.

“Kwik Kopy Miller Street continues to go from strength to strength. In just a few years it has managed to turn a struggling business into a top performer,” says Kwik Kopy Australia MD David Bell. “But it’s not just an effective business model that makes Kwik Kopy Miller Street a standout performer. Its community spirit sees it deliver first-class customer service, build an empowered team, share knowledge and contribute to its franchising network at all times.”

Similarly, 2018 NSW/ACT multi-unit franchisee winners in the latest New South Wales/ACT awards Jim Kelly and Crystal Petzer of Hire a Hubby Mona Vale and Narrabeen have carved successful careers from franchising for more than 20 years. They first had a 10-plus-year stint as convenience store franchisees before, after considerable research, buying their first Hire a Hubby franchise nine years ago.

“We’re passionate about the brand.

The franchisor has a really good system and we follow it to a tee. Maybe that’s our secret – we take that system and we work it,” says Crystal.

There are many thousands of similar stories to be told about franchise success, and they reflect the larger picture of franchising experiences in Australia.

Putting in place systems and processes to ensure franchisees are as profitable and passionate as these award-winners should be at the heart of every good franchisor’s business. It simply makes good business sense for franchisees and franchisors alike for this to be the case. n

Fifo Capital – the sophisticated Business model for Entrepreneurs and Business leaders It’s still not too late to get a slice of this outstanding $64 billion invoice finance industry. While some markets are now closed out we have opportunities in several major metropolitan and region centres.

In the recently published Australian Top Franchise awards, Fifo Capital was rated in the Top 5 Franchises for the Lifestyle category, as voted by our Franchisees.

The network’s performance has been amazing in 2017. Turnover for the year was over $260 million, bringing our total lend to well over $1 billion!

We have only scratched the surface of this huge industry and we are now ready to take the business to the next level.

With potential returns in-excess of 50% annualised per annum, highly secured assets and very low overheads, there is simply no business model that can compare.

The key driver behind our success is undoubtedly the people. Our Business Partners provide a highly valued service to the SME community and received a Net Promoter Score (NPS) of +63% from their clients for 2017.

To make your journey easier, we now have an Investor program running providing capital. You can use your own capital or our Investor capital and lend funds using our proven systems and processes.

Would you prefer just to be an investor?

We want to talk to you also!

“The decision to join the Fifo franchise has delivered beyond my wildest dreams, I hit the $1 million mark in finance written for my first year!”

Mark Edwards – Fifo Franchisee

Find out more about this opportunity Andrew Roberts 1300 852 556 I 0438 801 575 www.fifocapital.com.au

FRANCHISE BASICS

CAN YOU AFFORD IT? When looking into buying a franchise, you need to consider not only the set-up costs but also whether you have enough resources to move ahead.

by Kate Groom, SmartFranchise

I

t is surprisingly common for people to set their heart on buying a franchise then discover they cannot afford it – often after investing a lot of time in their franchise research. To avoid disappointment and wasting your time, first think through whether you can afford to buy the franchise that has caught your attention.

When it comes to buying a franchise, three things determine whether you can afford it: • The cost to set up the business • Your ability to finance the business through a combination of your own money and borrowings • Whether you can live on the income from the business Set-up costs include all the expenditures needed to get your franchise business open. There are two broad categories: tangible costs, which are things you can see and touch, and intangible

costs, which are associated with intellectual property and know-how. Early in your franchise investigations it is a good idea to find out how much these add up to so you can then consider whether the set-up costs are within financial reach for you.

The tangible set-up costs include fitout of your premises and the equipment you will use. For a mobile franchise they include your vehicle. You may also need to cover the cost of stock for sale. If you buy a home-based franchise, tangible costs include the cost of office equipment, computers, phone and any specialised equipment.

Intangible costs include the initial franchise and training fees. Depending on your franchise, there might also be an initial marketing contribution, project management and design fees.

These two groups account for the bulk of set-up costs for most franchises.

However, you are also likely to encounter several other costs as you prepare to open for business. These include rental bonds

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for retail locations and contributions to legal costs of the franchisor. You are also likely to need some working capital for the business, for instance to buy stock or to finance customer credit.

DISCLOSURE DOCUMENT So how do you find out what these costs add up to? Franchises must detail these in the disclosure document. Ideally you will obtain this document early in your investigations, but even before receiving it you can ask for information from the franchisor or new franchisees.

New franchisees often incur extra costs while setting up. These might be for sundry items or equipment replacement if someone is buying an existing business. So it is a good idea to ask recent franchisees if this happened to them, and make allowance in your calculations.

You might find it helpful to compile

FRANCHISE BASICS

your own summary of the main costs and any relevant notes. Compiling a table will help you gain a realistic picture.

The set-up costs are not the only factor that will determine whether you can afford a franchise. There is also the question of what you will live on while the business gets up and running.

To help you with this assessment, there are two important questions: 1. What are your monthly living costs?

These include rent or mortgage payments, food and living expenses, school fees, travel, insurance and so on. As part of going into business, you may have to live on less than before, particularly if you previously had a well-paid job.

2. How long will it take for the business to generate enough monthly revenue to pay you? Remember, the business can pay you only once the income exceeds the business expenses, including loan repayments. In most cases, it takes time to build up the sales to this point.

Once you know how much money you will need to put aside to cover your living costs during the start-up phase, you will need to determine where that money will come from.

Knowing what the franchise will cost is just the first step. The next is to work out how you will pay for it. In other words, can you afford to buy the franchise. In any franchise you should expect to invest some of your own money. It is unlikely you will be able to start a business unless you have a combination of savings or home equity to contribute toward the cost of set-up. So, now is the time to work out how much of your own money you have available.

Of course, the first and most obvious source is money you have saved, as in a bank account or a windfall such as a redundancy payout or inheritance.

It might also include savings you have put aside as extra mortgage payments.

Occasionally, people take on a business partner to help with finance. You might find it helpful to note down how much of your own money you have available.

BORROWING MONEY Borrowed money can also help fund your franchise. This might be in the form of a bank loan or leases for equipment.

It can be tricky to gain a sense of how much you can borrow to finance your business, but ask the franchisor what financing options are commonly used and whether they have arrangements with equipment finance and leasing companies. When people approach us at SmartFranchise for advice, we direct them to finance experts who can give

Item

Estimated cost

Notes

Fit-out of premises Equipment Goodwill (if you are buying an existing business) Franchise fee plus franchisor legal fees Training and other costs Working capital for trading, stock purchase or to fund customer credit Other costs, such as rental bond, extra equipment, marketing Your own legal and accounting advice

TOTAL SET-UP COST them pointers on possible sources of finance suitable for a franchise.

When you seek to borrow money from a bank, it will usually want some form of security. Sometimes a bank may be prepared to lend against a business, but more often they want bricks-andmortar security. They also need to satisfy themselves you will be able to repay the loan from your income.

ALTERNATIVES

a couple of years saving more money or look for a different business. You might consider going into business with a partner.

By taking a methodical approach to assessing whether you can afford a franchise, you will improve the quality of your due diligence and lessen the chance of falling at the final money hurdle. It also reduces the risk you will find yourself committed to the franchise and overstretched financially. n

Even if you can afford to finance the franchise set-up and your living costs while the business starts up, you need to ask yourself if you can afford to live on the income from the business for the life of the franchise. This means you will need to compare your living costs and financial aspirations with a realistic assessment of what you can make from the business. For instance, if you really want a private education for your children, can you see the business being able to provide you with enough income for this? Owning a business is more important for overall family priorities.

It might be that for a couple, one partner runs the franchise while the other is employed elsewhere. This might allow you to enjoy the benefits of owning a business while having the security of paid employment to cover some of your household costs.

What if you find the franchise is out of reach? There are always alternatives, so do not despair. Perhaps you can spend MAY/JUNE 2018 | 82 | WWW.FRANCHISEBUSINESS.COM.AU

The set-up costs are not the only factor that will determine whether you can afford a franchise.

There is also the question of what you will live on while the business gets up and running.

FRANCHISE BASICS

COSTS

Coming to grips with the financial language of business is part of taking up a franchise. What do you know about wages, paying rent and cost of goods sold?

by Kate Groom, SmartFranchise

W

hen considering a franchise, you need to look into the financial aspects. This means coming to grips with the financial language of business. Some terms may be familiar, but others will be new to you.

There are three key financial terms you need to become

familiar with. For many franchisees, the three most significant costs in their business are wages, rent and the cost of goods sold.

Together, these can eat up more than 60 cents of every dollar you make in revenue. By understanding what these costs involve, you will be in a better position to manage them and run your business well.

WAGES – AND MORE Of course you know what wages are, having been paid for the work you have done yourself.

Even so, there is a bit more to understanding this important category of costs than knowing that wages are what you pay your employees. For instance, what about superannuation? Is it part of wages?

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FRANCHISE BASICS

COPING WITH

FRANCHISE BASICS

First, the big picture. Wages are made up of two costs: the wage or salary, plus compulsory superannuation contributions made by the employer.

For most franchises, it is best to split out costs between wages for employees and the money the owner draws from the business. This helps the owner see how much they are being paid. So, when we set up franchisee accounting we create two categories of wages: those for employees (staff wages) and those you pay yourself (owner’s wages, or drawings).

Superannuation, usually referred to as “super”, is money set aside over your lifetime to provide for your retirement.

For most people, the employer must pay an amount equal to 9.5 per cent of their salary into their super fund account. This is on top of their salary or wages. Employer contributions are based on “ordinary time” earnings, such as commissions, shift loadings and allowances, but not overtime payments.

If this seems complicated, it is. The good news is that information is available online to help you. Two reliable sources are the Australian Taxation Office

website, www.ato.gov.au, and ASIC Money Smart, www.moneysmart.gov.au.

Also, your franchise accountant should be able to explain the basics and also set you up with payroll software that does many of the calculations for you.

There are two other factors that affect the wages cost in your franchise: 1. Most people who work in Australia are entitled to receive a specified minimum wage as set out in the government’s modern awards. As an employer, you are required to comply with these awards.

2. It is important to understand the distinctions between permanent fulltime, permanent part-time and casual employment. This includes knowing about holiday and other leave entitlements as well as extra pay (“casual loading”) which is an entitlement for casual employees.

The Fair Work Ombudsman’s website, www.fairwork.gov.au, has information about these aspects of employing people.

New franchisees often ask how much they should pay themselves. There is

no single answer to this as it depends on a variety of factors including the financial position of the business, the franchisee’s personal financial situation and tax planning. However, when you are evaluating a franchise, it is important to consider whether the business will be able to provide you with a satisfactory wage.

Also when evaluating a franchise, it is essential to work out the true cost of employee wages. You should work out the monthly cost based on the hours the business is open and at least the minimum award wages for various staff roles (including your own time). Then consider whether the business will be able to afford these wages based on a realistic level of sales.

RENT, AND OTHER COSTS Rent is what you pay to occupy the premises where you run the business.

However, there is a little more to this than rent for an apartment or house.

Here are three things to watch out for...

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1. What is included in your rent? Check if there are any extra property-related costs on top of the rent. These might include such outgoings as marketing levies (in shopping centres), or the cost of electricity, gas or water. If the business is in a shopping centre, you may also face extra payments related to the value of your sales.

2. Plan for the end of your rent-free period. New businesses often receive a rent-free period at the start of their lease, but it can be a shock when the payments kick in. So when you are preparing your initial budget for the business, allow for the full monthly rent when you assess whether the business can make enough profit to satisfy you.

3. Be aware of rent increases. Your rent will rise each year, according to the terms of the lease. This means it is smart to add up the total cost of rent and check whether it would be reasonable given the sales you expect to make over the whole lease period.

If you are buying an existing business and the lease is about to expire, be sure

A better approach is to think carefully about the right mix of staff members, blending experienced hands with juniors who are learning the ropes. At the same time, it can often pay to have fewer, more efficient and skilled staff than a bunch of less-competent people hanging around.

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FRANCHISING, LICENSING AND DISTRIBUTION SPECIALISTS Australia is open for business and the 2018 forecast is for further growth. The ACCC is actively monitoring compliance in the industry! Minimize your risk and ensure your compliance to avoid fines and penalties.

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COST OF GOODS SOLD Cost of goods sold (COGS) is a term you may not know. It refers to the cost of items you buy that are included in the product sold to the customer. For instance, in a food business this includes the cost of ingredients, and in a retail business it includes stock for resale.

COGS is usually expressed as a percentage. For instance, if COGS is 30 per cent, it means 30 per cent of sales.

Here is an example: Sales: $150,000 (100 per cent) COGS: $45,000 (30 per cent) Gross profit: $105,000 (70 per cent) Gross profit is simply the difference between sales and COGS. As a franchisee, you will be required to buy many items from specified suppliers. In some cases, you may need to buy from the franchisor. You might hear that a franchise gives you the benefit of buying power for such purchases. This should mean you can buy supplies and materials at a lower price than many independent competitors.

It is important to satisfy yourself of this claim, and to understand what the actual COGS is for franchisees who are up and running.

Some franchises do not offer better buying prices, but rather provide you with access to exclusive products.

Your costs may be higher than a similar business down the street, but you will have access to a distinctive product aimed at a specific market.

MANAGING YOUR COSTS Now you know what makes up these three important areas of cost, the question is how to make the most of the money you spend. This is where you add your skill as the business owner.

When you are new in business, you may find your costs are higher than those for an established franchisee, but as you become more familiar with the business you should seek to carefully and wisely manage your costs.

When it comes to managing costs, it is not a matter of simply cutting wages by employing the cheapest staff possible.

This can do more harm than good if you end up with an unreliable workforce, poor customer service and waste.

A better approach is to think carefully about the right mix of staff members, blending experienced hands with juniors who are learning the ropes. At the same time, it can often pay to have fewer, more efficient and skilled staff than a bunch of less-competent people hanging around.

You can also consider using incentives to encourage staff members to increase sales or control costs. This keeps

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everyone focused on delivering results.

Rent is a fixed cost – there is nothing you can do to reduce it once you have agreed to it. So how can you make the most of the rent you are paying? Paying rent shows you have decided to be in a fixed location, so make the most of this. Think how to attract more people to your store. Look at the advantages of your location and exploiting them.

To control COGS, the key things to tame are waste and product mix. By reducing waste you reduce your COGS, so be sure to learn the tricks of the trade from experienced franchisees.

Product mix can have a huge effect.

Find out which products are most profitable and learn how to combine the sales of these with lower-margin products.

This is the art of sales and merchandising, and is a fundamental skill for a retailer.

One of the best ways to understand the financial aspects of your business is to ask questions about the different costs. Do not be afraid to ask the franchisor about the types of expense and what is included. Your franchise accountant can also help you understand the different costs and how they affect financial performance. n SmartFranchise works with franchises to make sense of business information and use it wisely.

FRANCHISE BASICS

to seek advice on the likely terms of a renewal. If the current rent is below market rates, you may face a big increase in costs on renewal.

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FRANCHISE BASICS

FUNDING YOUR

FRANCHISE

Like most small businesses, new franchise units are rarely funded from cash reserves, and borrowing may be necessary.

DARRYN MCAULIFFE FRANData

A

s a significant and valued contributor to the Australian economy, franchising brings with it great opportunities for aspiring entrepreneurs and lenders.

It is important to remember that franchising is really just a subset of small business and, like most small businesses, new franchise units are rarely funded from cash reserves.

The practical reality is that most franchisees will need to borrow to complete their acquisition. Accordingly, and like for most small businesses, access to finance can be a challenge.

However, many franchise systems enjoy a distinct advantage over independent small businesses in that they have a successful and proven business model.

Firstly, at the core of a franchise, is the requirement for uniformity in providing a quality service or product experience for customers. The same ingredients, same process, same presentation and same end product are all critical to the transaction at hand.

If uniformity is the product, then consistency is the business. The expectation of a quality, identical product or experience (every time) is the key to driving repeat business for not only that

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outlet, but indeed every unit of that brand across the network.

MEANINGFUL DATA The other great opportunity for franchising is the ability to collect meaningful data that can provide insights to the individual franchisee, their franchisor and, importantly here, potential lenders. Why is that data so important? Quite simply, the data provides the ability to evidence or support predictability. Lenders are in the business of lending money – and getting it back. When they are provided with meaningful data, they can

FRANCHISE BASICS

be more comfortable with the transaction as it helps them interpret the risk profile.

For example, key projections supported by “average” sales, margins, occupancy costs and wages can all enhance confidence around the level of cash a franchised outlet may generate to cover living expenses and loan obligations.

In this context, it is important not to confuse “average” with “mediocre”. Lenders do not like surprises, and fact-based data helps reduce that risk. Franchise brands that cannot, or do not, collect data on their networks find it hard to close the “information gap”, which is the biggest impediment to providing franchise finance.

For many years, the lending community has recognised franchise lending as an important part of its small-business lending portfolios. Lenders have created various approaches and accreditation programs to streamline the processing of individual transactions, and to track their group exposures.

While they have continued to add new brands to their panels, they have also been more active in removing brands where there have been few loans written or an unacceptable level of problem loans.

MORE CONSERVATIVE As well as that, some recent adverse media reports have made lenders more conservative as they take their time to objectively establish the facts and confirm the health of the brands and small businesses they are supporting.

On a positive note, some new lenders have entered the market and lenders across the board are increasingly recognising the efforts of some brands to promote improved access to finance for their franchisees through an improved lender experience.

There has also been a tangible commitment from lenders to better understand and serve the many quality brands in the sector, with more than 50 individuals having undertaken the CFE-accredited RFLS (registered franchise lending specialist) program introduced last year. Lenders like to be associated with strong brands with good growth prospects and a good track record.

Apart from reviewing their own loan portfolios, experienced franchise lenders focus on several key areas to help them predict risk. Recruitment practices,

approach to site selection, initial training and ongoing support are just a few areas they seek to better understand.

Unfortunately, many good franchise brands do not have formal accreditation arrangements because of the lower capital cost to enter their system. Fortunately, these brands can still create independent tools that can be used by all lenders to assess transactions on a case-by-case basis.

It is important that both these lower capital outlay and younger brands do not give up and concentrate on controlling what they can.

There are several positive signs lender watch out for: • RELATIONSHIP BUILDERS. Brands that already have (or are building) good rapport with lenders.

They ask lenders what more they can do to make it easier for their franchisees to take out loans. They offer plenty of information and relish being able to provide examples to prove how they support franchisees. Quality brands see the occasional problem as an opportunity to show lenders and potential franchisees how strong and effective their support is, knowing

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nvesting Franchisees c Some fran

TEXT Next,ts.

By this stayou check the franchisor’s website for any media releases it has

bio

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that lenders recognise this as a key step in preventing business failure.

• MULTIPLE ACCREDITATIONS. Lender accreditations are a good sign, but be careful not to confine your search to those brands that hold them, as plenty of good brands create lending opportunities through other mechanisms.

• COMMITMENT TO TRANSPARENCY. Early and open conversations with prospective franchisees, membership of the Franchise Council of Australia and registration on the Australian Franchise Registry (reflecting the currency of key compliance documentation, the availability of lending tools and other measures of transparency) are all good indicators of a commitment to transparency.

Just as there are positive signs, there are also warning signals for lender relations. Prospective franchisees should tread carefully when franchise brands wave red flags in regard to lenders...

• EXCESSIVE AND HIGHLY EMOTIVE OR PUBLIC CRITICISM OF LENDERS. The foundation of a long and enduring lending association is the relationship. Lenders deal with, and warm to, brands they believe are trying to work with them. Getting them offside generally only sets back the long-term aim and benefits of improved access to finance.

• A FALLING NUMBER OF “ACCREDITATIONS”. The withdrawal

of an accreditation is not always a warning sign as sometimes there are simply not enough loans to support the program, or there has been a cut in the lender’s staff numbers. However, it can be a direct reaction to problem loans and franchisors not doing enough to support their franchisees.

• OVER-RELIANCE ON BROKERS. There are some good finance brokers in the franchise finance space who play an important role in lending. However, they are of limited value when a franchise brand is not attractive to a lender in its own right. Quality franchise brands find a way to improve their relationships with lenders and reduce their reliance on brokers.

Australia’s major banks are still the most active in the franchise lending space with the ANZ, CBA, NAB and Westpac all maintaining dedicated franchise bankers and franchise-lending policies, though there are significant differences in their models and activity levels.

Franchise-lending activity and appetite is also apparent in regional lenders and specialised lenders such as Bank of Queensland, Cashflow It, Silver Chef and, more recently, Judo Capital.

MORE CONSERVATIVE Franchisees that have benefited from the expertise and ongoing relationships with lenders should be a prospective

franchisee’s first port of call in trying to identify and connect with the best franchise lenders. Registered franchise lending specialists are listed online www.thefranchiseregistry.com.au.

No matter which lender you turn to, they will be looking for well-organised applicants and solid future business owners. A fully completed application form with copies of supporting documentation and a simple business plan will go a long way to creating a good first impression. Prepare yourself well with a good understanding of what information is needed, how much you need to borrow, how you will pay it back and what your “fall-back” position will be if your business expectations are not met.

While not always straightforward, well-researched franchisees and ‘“lender friendly” brands continue to find ways to access and simplify the funding of new franchise units. n

Darryn McAuliffe is CEO of FRANData Australia and has more than 30 years’ experience in the banking and finance sector. He is a CPA, CFE and experienced former bank executive across business banking, risk management and franchise industry specialisation. FranData has been supplying independent information to support key franchise decisions for more than 25 years and runs the Australian Franchise Registry.

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FRANCHISE BASICS

FRANCHISE BASICS

Some recent adverse media reports have made lenders more conservative as they take their time to objectively establish the facts and confirm the health of the brands and small businesses they are supporting.

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FRANCHISE BASICS

FIGURING OUT

THE FIGURES Financial statements summarise the historical performance and position of a business, yet many business owners do not know how to analyse figures, let alone identify potential issues.

By Ian Diepenhorst, PPB Advisory

N

ot all financials are equal, so it is important for business owners to read the entire document when reviewing financial statements.

These documents may include sections such as management commentary, notes on accounting policies, and financial itemisations such as revenue by product or a breakdown of plant and equipment by class.

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The first thing to understand is profitability and how that of the business compares to industry players or competitors.

Also, the rigor with which the documents are prepared can vary significantly, for example:

To understand financial statements, they first need to be defined. Financials generally include:

•

• a statement of profit or loss and other comprehensive income, which summarises historical financial performance over a period of time (the reporting period, generally a financial year, but possibly shorter or longer in certain circumstances).

• •

Management accounts – generally subject to limited scrutiny, these are prepared for internal reporting purposes and have significantly less disclosure requirements Special-purpose financials – generally prepared for small and private companies, these are not audited Published financials – for listed companies, these are independently audited and must comply with relevant accounting standards.

There are also many different types of users of financials, such as business owners (to assess performance and to inform strategic decisions), prospective investors/owners (to assess performance, calculate how much to invest/ pay, and to gauge potential), lenders (assessing debt servicing and security) and the ATO and other tax authorities (to assess stamp duty and ensure the appropriate amount of tax is levied).

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Typical line items include revenue or sales, cost of goods sold (known as COGS and being costs directly attributable to sales), gross profit (revenue less COGS), operating expenditure (overheads such as advertising, rent, utilities, salaries and wages), net profit (gross profit less overheads), taxation and net profit after tax (also known as the bottom line).

• a statement of financial position (balance sheet), detailing assets and liabilities at the reporting date (generally 30 June).

Typical categories of assets and

FRANCHISE BASICS

liabilities are current assets (assets readily convertible into cash within a 12-month period, and typically trade and other debtors, inventory and cash at the bank), non-current assets (those intended to be kept for longer than 12 months such as buildings, plant and equipment), current liabilities (amounts payable within 12 months such as trade or other creditors and an overdraft account), non-current liabilities (those payable after 12 months, such as long-term financing and loans), and equity (should equal the sum of all assets less all liabilities, and generally comprises retained earnings, which are the sum of all profits/losses since the start of the business, and the shares in the business, such as capital invested.

• a statement of cash flows, summarising physical receipts and payments over the reporting period.

This differs to profit and loss, which may include revenue not actually received, such as a sale with 30-day credit terms, or expenditure not

like bank loans or finance lease liabilities, and equity.

yet paid, such as an increase to employee provisions).

There are three key categories of cash flow – operating activities (transactions associated with the primary activities of the business, such as receipts from sales, payments to suppliers and employees), investing activities (the purchase or sale of assets used to generate income, such as plant and equipment) and financing activities movements in borrowings

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Review the detail but remember the big picture.

The profit and loss and cash-flow statements show the profitability of a business, but to compare different sized businesses, margin or ratio analysis is required. These revenue multiples are often used: • earnings (net profit) before interest and tax (EBIT) as a percentage of revenue. Note, a positive number does not necessarily mean the business is making money at its

bottom line, as EBIT excludes certain expenses like financing (interest and principle repayments), tax and capital expenditure.

• gross margin (gross profit divided by revenue). For example, if the gross margin is 20 per cent and overheads are $100, the break-even sales point is $500.

Other revenue ratios to consider include employee costs, rent and

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depreciation. These ratios can be benchmarked against industry data to identify areas of concern.

Liquidity ratios are used to assess the health of the business, in other words, the ability to pay its bills. These ratios are often used: current ratio (current assets divided by current liabilities), working capital ratio (debtors plus inventory divided by creditors) and quick ratio (current assets less inventory divided by current liabilities).

The liquidity ratios of a “healthy” business should be greater than 1:1 and in line with or above industry norms.

Generally, a ratio of 2:1 is accepted as the benchmark for a healthy business, but this varies by industry and the specific needs of a business. A ratio of 1:1 indicates no surplus funds are available after paying liabilities.

BE OBJECTIVE It is important to maintain objectivity when doing a financial analysis of a business. Review the detail but

FRANCHISE BASICS

If you are proposing to invest, sell, improve performance or identify problem areas, obtaining good-quality advice is essential.

remember the big picture. Some common mistakes include: • failing to consider recurring and non-recurring revenue/expenditure, such as the current year’s profit being the result of one-off revenue such as a gain from an insurance settlement (increasing profit) or litigation costs relating to an employee

dispute (reducing profit) • ignoring potentially unrecorded or misstated costs or liabilities such as related party arrangements that are lower than market rates (like rent when the property is owned by the business owner or related party and offered for use at nil cost or at a discount) or the use of equipment not owned by the business but

needed for production (maybe at little or no cost when owned by a related party). There can also be legal actions or an understatement of liabilities such as employee leave provisions • not identifying profit manipulation, such as early recognition of revenue (the early receipt of funds from a sale when the service has

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not been offered or the product has not been provided), rundown of stock to improve margins, absence of provisions for commitments such as employee leave balances, income tax payable or warranties (estimated cost of having to repair or replace products provided) and deferral of purchases such as restocking raw materials, inventory purchases, or the servicing or repairs of assets.

• not considering the basis of preparation, such as the supporting data for management’s estimates • ignoring supporting commentary (perhaps the auditor has drawn attention to something important) • not considering risk that may impact on performance, which can be internal (such as overreliance on a key customer or key management), industry related (emerging technologies making products obsolete) or

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economic (like the Reserve Bank increasing interest rates).

Obtaining expert advice can be invaluable when looking to make important decisions. If you are proposing to invest, sell, improve performance or identify problem areas, obtaining good-quality advice is essential. Experts often do reviews so know where to look, which questions to ask and what factors to consider outside the financials. n

Ian Diepenhorst is a senior manager at PPB Advisory, with 14 years’ experience in business advisory and audit roles in Australia and the UK. He is a member of the Institute of Chartered Accounts in Australia.

FRANCHISE BASICS

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FRANCHISE BASICS

TAKING

FLIGHT

Instead of a bumpy ride, your franchise journey can be improved by using data and benchmarking.

By Neil Soares, DC Strategy

S

o you have decided to buy a franchise. You are in Sydney, the franchisor is in Melbourne and the big meeting day has arrived. You have booked your flight, and off you go ready for a safe arrival.

With nearly 150 flights between Sydney and Melbourne every day, it is the second-busiest route in the world.

When you consider all the flights to other destinations, you realise how busy these airports and flight paths are. Kudos to the guys in the tower for keeping everyone safe.

What does flying have to do with

franchising and preventing catastrophic failures? Well, let’s imagine the flight path your franchise might take. With today’s advances in technology, flying relies less on the “skill” of the pilot to actually fly and more on other things, such as the instrumentation and ability of the pilot to absorb and interpret large amounts of data, their attention to detail, communication with their team, and their ability to take decisive action.

Are you ready to pilot your franchise?

Do you have the discipline to follow a system, work with your team, provide information, as well as committing to and relying on your countless hours of training to keep you, your crew and your

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franchise flying? Can you use KPIs to chart your course?

AVOIDING TURBULENCE KPIs (key performance indicators) are effectively critical points of data to keep you focused on taking the right and corrective action to avoid turbulence, have a smooth flight and minimise the risk of catastrophic failure. Alternatively, they should be reframed as “key success indicators”.

Great franchise systems are built on continuous measurement and learning, so individuals and systems can adjust

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FRANCHISE BASICS

Every system and flight path is different. You can’t just wing it. You must understand the KPIs and focus on achieving them to have a successful outcome.

accordingly. Naturally, you need a great culture, promoting the sharing of information and open communication that focuses on and drives support. This communication is not only with the “control tower” or head office, but there should also be healthy discussions among the pilots or franchisees for opportunities to learn from each other.

Dashboards and tools provided should have the relevant information necessary for the franchisee to run their business in the most efficient manner so as not to burn fuel, wasting cash and profits. Of course, if the information provided to the franchisor or input into the dashboard is rubbish, you cannot possibly expect to receive the direction you need to minimise the risk of a crash-and-burn outcome, regardless of how good your plane or franchise system may be.

Before takeoff, have you actually prepared your business plan or your flight path? It may be a good idea to ask your franchisor what the best franchisees or best-performing stores achieve or deliver on a daily and weekly basis. This will form the basis for your initial reference points for measuring your own performance. In other words, how well do you think you are going

to do, and when you’re flying, what actions will you take to be either as good or better than the best?

FLY HIGH Be careful of using average performance indicators. Unfortunately averages take into account the bottom performers, as well as the best. Generally, the planes flying highest face less turbulence, so fly high.

What you measure will depend on your business. For example, in a food-based franchise you may want to understand what the daily and weekly sales are, how many customers there are, the average spend, the food costs and, in today’s age of delivery, what percentage of customers transact in-store as opposed to through a delivery partner. How will this impact your food cost? What is the waste or deviation from the theoretical food cost versus the actual food cost? What is the ideal labour cost based on sales? How does your franchisor measure productivity, and how do the best franchisees achieve this? Do they hire better staff or do they have better

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DIFFERENT DATA Other systems such as servicebased franchisees may measure a different set of data points. For example, physiotherapy, medical or hospitality service franchise systems may track initial bookings and return bookings, giving them an indication of their service uptake and ability to service a client or patient. Much like frequent-flyer programs, do you know your customer, how to build a relationship driving loyalty, and can you project how often they fly and how they communicate with you?

Financial service franchise systems may measure loan size, loans settled, the response times from inquiry to customer contact, and the success quotient of contacts to settlements. Fitness franchises may measure more than just memberships and renewals, tracking the total weight lost by their members, to assess if they are driving results for their clients so they can build

FRANCHISE BASICS

brand advocates.

Every system and flight path is different. You can’t just wing it. You must understand the KPIs and focus on achieving them to have a successful outcome.

Now you know what to measure, who should you tell and how often should you review your performance?

Should you maintain cruising altitude or climb further to avoid the storm cell ahead?

CLEAR CHANNELS The best systems have established clear channels and regular reporting, with the ability to provide clear dashboards using data provided by you and your network of franchisees.

Traffic-light coding systems are often used as a way to highlight the areas that are red and need immediate attention. Amber may alert you to an impending action that is needed, while green could enable you to celebrate your wins and relax in those areas while you divert attention to other areas of improvement.

Regular business reviews with the franchisor to objectively look at your performance against mutually agreed targets, along with a comparison to the network’s performance, should give you a balanced view as to the improvements needed and also enable all parties to learn from shared experiences.

There is sometimes a perception that franchisors chase sales and focus on these to drive royalties. While that may be partially true, remember that the franchisor receives only a

small percentage of your sales (usually 5 to 8 per cent) in order to run the control tower to support you. You are in control of the bulk of your turnover and profitability.

Good franchise systems focus not just on sales, but critically on profitability, and work to improve a range of KPIs. Franchisors and franchisees must work together to understand the success factors in order to achieve them. Having a great takeoff is pointless if the flight is bumpy, there is no communication or direction from the tower, and the landing is rough or, in some instances, disastrous.

Enjoy your franchise journey and fly well. n

Neil Soares has more than 20 years’ experience in managing and running franchise businesses across Australia, both as franchisee and franchisor, with industry knowledge and experience in supply-chain management, leasing and the construction of food retail stores, implementing brand transformation strategies and leading cultural change in organisations.

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FRANCHISE BASICS

training systems?

I recently became aware of a multisite franchisee in a coffeebased business who outperformed the network performance in terms of food cost and labour cost by a combined total of 8 percentage points. On a $1 million turnover, this saving equates to $80,000. Can you afford to burn this amount of cash or fuel? To the franchise system’s credit, it asked this franchisee to present at its conference, and opened up the floor to questions so the rest of the franchise cohort could learn.

FRANCHISE BASICS

BUYER BEWARE

Before committing yourself to buying a franchise, be sure to do your due diligence and remember that seeking professional advice is an investment.

By Kerry Miles, FranchiseED

B

uying a franchise is a major decision. It is right up there with buying a house and even deciding to marry. It is a long-term commitment that will greatly impact you, your lifestyle and your family.

It is a little like leasing a rental property.

You will be given the right to run the business for a certain term, but once the agreement ends you lose the right to run the business any more. Think of it like leasing or renting the business for five or 10 years, or whatever the term of the franchise agreement.

This has implications for the returns you need in the time frame of the franchise agreement. Determining if the franchise will give you the returns you need is not easy, and you will need solid advice as well as doing your own homework.

Research by the Franchise Centre at Griffith University (now FranchiseED) on due diligence found that more than a third of current and former franchisees had regrets about the amount and depth of their due diligence. The areas they believe they should have researched more thoroughly included financing, the price paid for the business, cashflow forecasting, checking inventories and understanding leases.

There is a saying that when it comes to property, you make your money when you buy rather than when you sell. This means that if you buy at a good rate (low price), you have more to gain when you decide to sell, and this increases your wealth.

buying a franchise that will not give you the returns you need. To break this down, your franchise needs to provide enough revenue to pay its daily running expenses, pay you as the owner of the business a reasonable return, plus pay off the loans you have taken to buy the business.

Because most franchise agreements are for five years, usually with the option to extend for another five years, it is wise to pay off your loans in the first five years. Then from years six to 10 you have more opportunity to build your nest egg as you do not have the loan to pay off and you can save or invest this money.

We have all seen the impacts of paying too much for a business and not being able to make a reasonable living.

You do not want to be in this position.

These are important considerations, and you are not alone in wondering how to work around this. This is where business and accounting advice is important, as you will need guidance.

Here are three steps to help you find the right person to help you: 1. Search for a company Do an internet search to find franchise business advisors and accounting professionals. You do not need to find a local adviser as information can be provided via email, phone or Skype.

The most important thing is to find someone with extensive experience in franchise business advice, as franchising is a specialised area.

AVOID PAYING TOO MUCH This can be the same in franchising. The first thing you need to do is avoid paying too much, or in other words,

2. Qualify the experience Ask what experience the team has in franchising. How many clients seeking to buy a franchise has it had over the past 12 months, and what

percentage of its clients are involved in franchising?

Also, ask for a reference from a franchisee.

3. Check the fees Ask the business about the cost of its services. Is it fixed for the advice or charged at an hourly rate? What are the payment terms? Who will be appointed to do the work. Will it be delegated to someone else in the office or to an overseas virtual team?

MAJOR IMPACT Franchise buyers can regard the costs of professional advice not as an investment but an avoidable expense. However, research by Griffith University and UNSW in 2015 showed that reluctance to invest in due diligence, and particularly in consulting with professional advisers, had a major impact on long-term business success.

The average cost of due diligence (including legal and financial advice) was slightly more than $3200 – a small price to pay considering your investment in a franchise usually amounts to hundreds of thousands of dollars. Improve the chances of success by obtaining experienced accounting and financial advice.

FInally, when your advisor gives her/ his advice, you need to listen carefully.

I hear of too many people who obtain advice then ignore it. Listen and think about it. The future of you and your family is too important not to do so. n

Kerry Miles is the founder/director of FranchiseED, a not-for-profit with the quest to grow franchise businesses and communities ethically. Free resources are available at www.franchise-ed.org.au.

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FRANCHISE BASICS

KEEPING

THE FAITH

Franchise parties need to act honestly, exercise their powers reasonably and have regard to each other’s legitimate interests – in other words, act in good faith.

DR MICHAEL SCHAPER Australian Competition and Consumer Commision.

A

rticles in the media have been asking if franchisors are acting in good faith. This raises the question of how the critics exactly define “acting in good faith”, and to whom specifically their comments apply.

How can franchises be certain their members are acting appropriately?

“Good faith” can mean different things to different people. However, it is

important to remember that it is a legal concept; what “good faith” means under the law might not be same as what it means in daily use.

The concept of good faith has been a central part of the mandatory national Franchising Code of Conduct since the beginning of 2015. It shapes how franchisors and franchisees (including potential franchisees) deal with each other. At its core, good faith requires parties to act honestly, exercise their

powers reasonably and have regard to each other’s legitimate interests. It is important to note that the obligation applies at all stages of the franchise relationship, including:

• • • •

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negotiating the terms of the franchise agreement performance of the contract dealing with disputes deciding whether to consent to transfer a franchise agreement, and

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FRANCHISE BASICS

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ending a franchise agreement (including termination).

Franchisors are in a powerful position in the franchising relationship, and the obligation for them to act in good faith is an important constraint on their power.

However, it is important for franchisees to remember that the good faith obligation works both ways. You have a right to expect your franchisor to act in good faith, but you must also exercise good faith in return.

BE HONEST Imagine a franchisee who runs a commercial cleaning business where the franchisor allocates clients but starts to service some clients “off the books” while telling the franchisor they no longer want the service. In that case, it would be reasonable to say the franchisee was not acting in good faith as they have been dishonest with the franchisor in order to gain more direct business for themselves.

There are some simple things franchisees can bear in mind and should also look out for in their relationship with their franchisor. These include being honest and taking the time to consider their interests as well as your own.

If disputes arise, good faith can fly out the window as emotions run high.

Where possible, try to resolve disputes as they arise in a calm, reasonable and fair manner. Try to understand the other person’s point of view.

It may also be useful to suggest mediation in a situation where you cannot quickly resolve disputes, but remember, a mediator can only help the parties reach an agreement – it is not a mediator’s job to formulate an agreement.

If you or your franchisor are proposing to make any changes to your franchise or franchise agreement, it is important to consult to discuss these changes fully before moving ahead.

Both sides should be given a chance to understand what changes will mean for them.

While good faith requires parties to have regard to each other’s rights and interests, this does not mean they have to put the other person’s interests above their own.

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THIRD PARTY While good faith requires parties to have regard to each other’s rights and interests, this does not mean they have to put the other person’s interests above their own. For example, if you are trying to negotiate a change to your franchise agreement, good faith suggests the franchisor should act honestly and co-operatively during the process, but it would not mean they have to make the change for you.

In difficult situations where there are competing interests, it may be useful to involve a neutral third party.

It is also important to keep in mind that neither the franchisee nor franchisor should use their rights, powers or discretion for an ulterior purpose.

For example, imagine a franchisee buying into a physiotherapy franchise in which they have to use the franchisor’s software system to book appointments for clients. However, the system has glitches known to the franchisor but not to the franchisee before their agreement

was signed. When the franchisee raises concerns about the software system, the franchisor is not helpful. With such a situation continuing, it leads to a breakdown in the relationship.

While waiting for the software problems to be resolved, the franchisee starts recording bookings in a spreadsheet. The franchisor becomes aware of this and issues default notices, alleging the franchisee has not complied with the booking requirements under the agreement.

In this scenario, the franchisor has likely not acted in good faith as they had an ulterior purpose – they wanted to be rid of the franchisee and knew the franchisee could not fix the issue by themself.

TALK FIRST If you suspect your franchisor is not acting in good faith, initially the best course is to first discuss the problem to find a way forward. If the problem is not

resolved, mediation becomes a good option. Mediation services are provided by state and federal Small Business Commissioners, among others.

Failing mediation, you can also contact the ACCC to report alleged breaches of the Franchise Code of Conduct, including a breach of the good-faith provisions.

A failure to comply with the good faith requirement in the code could result in the ACCC taking court action to seek a financial penalty, or issuing an infringement notice. The ACCC determines the appropriate enforcement tools on a case-by-case basis, taking into consideration the alleged contravention, the business involved and the impact of the conduct. n

Dr Michael Schaper is the ACCC deputy chair. His special focus is on small business, franchising, industry associations and business liaison with the national competition and consumer protection regulator.

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FRANCHISE BASICS

5

WAYS YOU CAN BE

NUMBER

SAVVY Making money is at the heart of a successful franchise.

E

veryone goes into business to make money, and investing in a franchise means there’ll be systems and processes in place to help you get the business up to speed and run a profitable operation.

Even so there will be economic challenges from outside and inside the business.

Check these five behaviours that will help you get the money matters right from the start.

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1. BE REALISTIC

3. BE PRACTICAL

Whatever the scope of your business dream it needs to be matched to a realistic goal with a plan and a deadline. And that means setting out a strong budget that takes account of your current and future commitments, savings, and potential earnings.

It’s not uncommon for fledgling franchisees to overestimate the value of a house to be mortgaged, for instance, or to underestimate the real costs of living.

Many franchisees sacrifice their standard of living for the initial period of business-building but whether or not you will adopt a more frugal lifestyle your choices need to be based on true numbers not fantasy.

Work your way to success in a franchise with a cost effective purchase. Consider whether or not you have the budget to not just buy the franchise but trade for a few months until the income picks up. Consider the lease, particularly if you are investing in the food and retail sector. Will you be paying too high a price to get yourself set up in a prime spot? Use your franchisor’s negotiating skills and experience to secure the most favourable deal, and one that will be sustainable as rents increase.

Speak to the franchisor and other franchisees about unexpected costs that might crop up. Estimate the costs of setting up in business - and add a bit more! There can be all kinds of obstacles thrown in the path of a brand new franchisee opening a new business, and any delay can eat into your initial savings.

2. BE HONEST If you’re lucky enough to have funds to support your franchise purchase, great.

But for most franchisees a bank loan is essential.

Whether you are turning to one of the big four banking institutions, a community bank, an alternative funding firm, or even your family, do yourself a favour and don’t fudge the figures.

A viable business is not one built on false financials so ensure the lenders have the right numbers to crunch.

Banks like to lend money but they don’t like to lose it and will base their offer on their understanding of the brand potential, and the figures you provide.

Stay on the right side of the financiers and share honestly. After all, do you really want to find your business cut short because the numbers don’t add up - and never did?

4. BE ADVISED Costs are tight when you are investing in a franchise. However there are distinct advantages to seeking expert support in the process.

Yes there will be more expenses to add to your budget but the value-add of a franchise-experienced professional can be significant. Lawyers and accountants who understand the nuances of the franchise world can spot danger signs in franchise agreements, leases, profit and loss statements…and that may save you substantial funds in the long term, particularly if you decide to walk away from an opportunity that has no hope of profitability.

Many franchisees are new to business ownership and to the financial terms and

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concepts used, so it is a good move to leverage the expertise of industry professionals who can explain and advise on crucial matters.

Once you are in business, it might be a good investment to use a bookkeeper if the accounts become a struggle for you, freeing up your time to build the business.

5. BE VIGILANT Buying a franchise is just the start of your exciting journey. So much energy, commitment and paperwork goes into the start-up that once franchisees have found a solid rhythm and understand their business processes they tend to relax a little.

It pays to be constantly critical of the business though and ensure the adherence to proper processes and financial analysis continues through the life of the franchise.

Many franchisors look for financial transparency from their franchisees and use franchisee data to benchmark the network’s performance. Learn from other, more successful franchisees what steps they employ to stay on track to achieve their high performance goals.

Revisit your business plan regularly and above all keep sight of what’s happening with the income and outgoings of your business.

Todd Agius, a Ferguson Plarre franchisee for 15 years, says “I have full control of my business, of the payroll. I stay on top of it all, assess the numbers - I can summarise it fairly quickly.”

Paying attention to your finances gives you a good chance of success. n

FRANCHISE BASICS

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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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.

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.

brand new site.

MASTER FRANCHISEE: a 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.

GOODWILL: this is a

MULTI-UNIT FRANCHISEE:

GREENFIELD SITE: 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

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:

similar to master franchisees, regional franchisees operate a large territory and appoints franchisees within the area.

intellectual property in business, such as sales rights in a territory, manufacturing technology or access to a trademark. A license is not the same as a franchise.

RENEWAL: once a franchise

term nears its end, franchisees may or may not be given a right to renew their agreement for a further term. This process is bound by the Franchising Code of Conduct. There is no

automatic right of renewal.

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.

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.

TERRITORY: is the area 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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FRANCHISE BASICS

BUYING A FRANCHISE:

THE PROCESS It can take three months or 18 months to find and open up a franchise. This is the typical path that will take you to franchise ownership.

MAKE AN INQUIRY

CONDUCT DUE DILIGENCE

Fill out an inquiry form or phone the recruiter for further details of the franchise opportunity that appeals.

This is a crucial stage, so take your time and be thorough in your research. You will need to sign a document confirming that you have received independent advice, or that you have decided not to do so.

Obtaining expert opinion from franchiseexperienced professionals can save you money in the long term, so it is a worthwhile investment.

FRANCHISOR RESPONDS 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.

FIND OUT MORE Fill out an inquiry form or phone the recruiter for further details of the franchise opportunity that appeals.

CONFIDENTIALITY The franchisor will ask you to sign a confidentiality agreement before sharing sensitive information with you.

Expect a copy of the disclosure document, draft franchise agreement and the Franchising Code of Conduct, plus an information statement.

Your franchisor might also send more commercially sensitive information to help you consider the viability of the franchise opportunity and build your business plan.

FIRST MEETING This is the time you will get a much clearer idea of the business, and the franchise team you will be working with.

PROVE YOURSELF You will need to create a business plan and show to the franchisor you have the capacity to take ownership of and drive this particular franchise unit.

A follow-up meeting will enable you to ask further questions following on from your due diligence, and for the franchisor to further quiz you.

OTHER STEPS Some brands can include a number of interviews, try-before-you-buy work experience or a panel review.

The franchisor might ask you to complete a profiling assessment.

DON’T RUSH IT The process to get from inquiry to sign-up could be a matter of weeks, or it could be months.

Buying a franchise is a significant, long-term commitment. It is important not to rush the process.

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THE

INFLUENCERS Who will be driving the business that you invest your hard-earned dollars into?

W

hat influence will the franchise team have over your future?

Here we look at key roles in a larger franchise business that will be shaping the direction and operation of the network. Not every business will include each role and in a small franchise set-up the franchisor will be wearing several, or all, of these hats.

CHIEF EXECUTIVE OFFICER/ MANAGING DIRECTOR: : The top ranking executive in a company, the CEO is focused on directing high level company strategy and growth.

In a smaller company, the CEO’s role includes operational business decisions and they may be much more hands-on on a daily basis.

In a larger business the CEO may have a position on the company’s board, and act as the link between corporate operations and the board of directors.

The founder of a franchise typically takes a CEO role.

CHIEF OPERATING OFFICER/ OPERATIONS MANAGER: A COO/ operations manager essentially works with the CEO to implement the strategy, making the decisions on how to achieve the goals set out. The role is typically responsible for daily operations, production, research and development, creating operational policies, and HR. The operations manager can influence the franchise business performance through resource allocation, cost reduction, improved efficiencies, the introduction of high quality products and services.

In a franchise where the founder is the CEO, the COO may be the more experienced executive.

manages its finances, investments, and capital structure and is influential in the company’s long term success.

Any funding for marketing or development initiatives will be approved by the CFO. The CFO manages the finance and accounting divisions and takes responsibility for the accuracy and timeliness of the company’s financial reports.

CHIEF INFORMATION OFFICER : A CIO has responsibility for the implementation, management and efficacy of information and computer technologies, vital in today’s digital world.

It’s the CIO who will investigate the benefits of any proposed technological change, and then implement the system - a website or inventory software, for instance.

The role is increasingly strategic and directed to gaining and maintaining the competitive advantage of a business.

CHIEF MARKETING OFFICER: The CMO is essentially charged with increasing revenue through increased sales using market research, product marketing, pricing, marketing communications, advertising and public relations.

Responsible for directing the planning, development and implementation of the franchisor’s marketing and advertising campaigns, ensuring a common message across multiple channels and platforms, the CMO reports directly to the CEO. GENERAL MANAGER: A general manager has overall profit and loss responsibility for the company, and usually oversees sales, marketing and daily business operations.

The responsibilities of the role may be incorporated into a CEO role.

CHIEF FINANCIAL OFFICER: This senior executive reports to the CEO but plays a strategic role in the way the company

FRANCHISE RECRUITMENT MANAGER: The franchise recruitment manager is responsible for attracting franchise buyer enquiries and for the recruitment

selection process, increasingly working with managers from other divisions and the CEO or MD in the final selection.

The franchise recruitment manager needs to meet internal recruitment targets and ensure franchisees are a match for the franchise brand.

BUSINESS DEVELOPMENT MANAGER/ FIELD MANAGER: Variously called a BDM, regional manager, field or area manager, this role is the interface between the franchisee and franchisor.

Responsibilities include helping franchisees achieve their business goals, ensuring brand compliance across the network, communicating brand direction and strategy to franchisees.

TRAINER: The person or team who will set up a franchisee to run the business. Responsibility for training may fall under operations or general management.

Training may involve technical skills, customer service, business basics, and operational procedures. The trainer may train franchisee staff.

PR AND COMMUNICATIONS: How the brand is presented in the media, how the brand engages with social media, how brand damage is mitigated... all these are influenced by the team that handles PR and corporate communications. This may be an internal team or an external agency.

SUPPORT TEAM: The individual employees at head office who manage, monitor and deal with queries, requests and complaints from franchisees.

FRANCHISE ADVISORY COUNCILLOR: A franchisee member of the Franchise Advisory Council which is typically involved in providing frontline feedback from franchisees to the franchisor, and in assessing and trialling new initiatives.

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FRANCHISE BASICS

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?

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RESOURCES AUSTRALIAN COMPETITION AND CONSUMER COMMISSION (ACCC)

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.

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.

Visit: WWW.FRANCHISEBUSINESS.COM.AU

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

FRANDATA 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.

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.

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

Visit: WWW.FRANDATA.COM.AU

FRANCHISE.ED Franchise.ED (previously Asia-Pacific Centre for Franchising Excellence) was created to help people find independent information and research on franchise best practice.

FranchiseED is a Not for Profit which provides education to encourage best practice; provides consultancy services; and provides access and dissemination of quality franchise research. The revenue generated by these programs will help support the social enterprise programs of FranchiseED. It extends upon the work undertaken previously by the Franchise Centre at Griffith University with the transformation into FranchiseED.

FRANCHISE COUNCIL OF AUSTRALIA

Visit: WWW.FRANCHISE-ED.ORG.AU

The FCA is the main body for representing franchisees, franchisors and service providers in the $146bn franchising sector in Australia.

THE FAIR WORK COMMISSION

Becoming a member of the FCA is a voluntary and is available for any organisation or anyone involved in the franchise industry including franchisees.

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.

Visit: WWW.FRANCHISE.ORG.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.

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

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Everything you need to find a franchise

• 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 Franchise Business is your essential guide to buying franchise – join us online now at www.franchisebusiness.com.au

INSIDE

ACCESS FREE ONLINE EDUCATION PROGRAM

FRANCHISE BUS I N E S S official online directory

1300 LOCATE

TM

1300 562 283

pipe & cable locators asset protection

Phone: Shayne Boogaard (NSW): 0418 136 156 Brett Reading (Qld): 0407 877 674 Peter O’Hara (Vic/WA): 0408 175 534 Contact: Shayne Boogaard (NSW): szh@7eleven.com.au Brett Reading (Qld): bzr@7eleven.com.au Peter O’Hara (VIC/WA): pwo@7eleven.com.au www.franchise.7eleven.com.au

Phone: 1300 562 283 Contact: Jason Kelly Franchising @1300locate.com.au www.1300locate.com.au Start up costs: Enquire

PROFILE: Over the 11 years in business, our success and longevity within the asset protection industry comes from our experience, and ability to work with an outstanding array of clients who continue to put their trust in us. Through ongoing improvement, upskilling and technology investment we remain current in an evolving market and by working closely with your clients you are able to tailor and adapt our solutions to best meet their changing needs.

We therefore offer you an opportunity to join this leading Organisation as a franchise owner covering one or all discipline of Cable Location, Vacuum Excavation (NDD) or Pipe CCTV Survey.

Franchise areas cover metropolitan and/or rural locations and have the ability for you to grow your business creating future stability.

Start up costs: $400,000 to $1,000,000 PROFILE: 7-Eleven is the largest convenience and independent petrol retailer in Australia with more than 670 stores across VIC, ACT, NSW, QLD and WA. We opened our first store in 1977 and have almost 40 years’ experience in franchising.

When you buy a 7-Eleven franchise, you buy two things. Firstly a globally recognised brand name, and secondly a business system that works, one that provides more support than most other franchises. As our stores are open 24/7, support is just a call away 24 hours a day, 7 days a week.

We are looking for Franchisees who have the potential to lead their team to deliver an outstanding experience to customers. Learn more about what it takes to be part of a partnership in success with 7-Eleven, at www.franchise.7eleven.com.au

Contact: Jason Stubbings jason.stubbings@anytimefitness.com.au www.anytimefitness.com.au/own-a-gym/

Phone: 0412511630 Contact: Kevin Bugeja kevin@franchise4u.com.au www.aquariumgallery.com.au

Start up costs: $350,000 - $450,000 PROFILE: Anytime Fitness is Australia’s biggest gym community, with over 500,000 members and 480+ clubs nationwide. With a 24/7 concept, alongside PT’s, Roar 30 and the Anytime Workouts app, we’re getting Australians moving for a fitter and healthier future.

When you join the Anytime Fitness family, you’re investing in much more than a gym, you’re joining a fitness movement full of like-minded entrepreneurs. We topped our category in Entrepreneur Magazine’s Franchise 500 list, based on our financial strength and stability, growth rate and size of our system. We have over 3,300 clubs in 26 countries. That means an unrivalled support network to draw on, from dedicated franchise coaches and national marketing teams, to a wealth of online tools and training.

As an Anytime Fitness franchisee, you’ll have the support of Australia’s largest health and wellness franchise group, Collective Wellness Group (CWG), to guide and support you every step of the way.

Start up costs: 300K-400K PROFILE: Aquarium Gallery is not your traditional pet fish shop. Think of a high standard specialty aquarium. Yes, an “Aquarium Gallery” which includes fish, aquatic plants, corals, natural aqua-scaping materials along with, of course, the best equipment and accessories to enable anyone to enjoy the wondrous beauty of aquatic life in their own home or office. We offer the customer a truly comfortable retail experience, from the moment walk in they begin their journey into the amazing and inspiring aquarium world because we pay specific attention to every detail resulting in healthy, beautiful and sustainable aquarium life. If you love the beauty of aquatic life we will show you how you can turn your passion into a business and be proud of yourself, what you do every day you are at work and make money doing it.

Phone: 1800 219 512 Fax: 1800 460 819 Contact: Peter Warwick peter@artofaquaria.com.au www.artofaquaria.com.au

Phone: 1300 287 669 Fax: 1300 795 287 Contact: Steve Wren steve@ats.com.au www.appliancetaggingservices.com.au

Start up costs: $45,000 to $200,000

Start up costs from: $52,000 + GST

PROFILE: How About A Business Opportunity Which Generates Serious Profits And An Attractive Lifestyle Art of Aquaria are in the process of releasing a number of territories with established client bases so that you can choose to either walk straight into a cash generating business or build up your own greenfield territory.

Are you looking for a business that you can operate by yourself with the support of a fun and dedicated team?

Are you seeking a growth industry where you can follow your passions and shape your own destiny?

If you share our passion for acquaria and think you have what it takes to be part if our team, we want to hear from you!

Phone: 07 5509 0000 Contact: Mark Crapper franchise@ozskin.com australianskinclinics.com.au/franchise

PROFILE: Australian Skin Clinics was founded in 1996 and is one of Australia’s leading cosmetic clinics focused on Skin Rejuvenation, Cosmetic Injectables, Laser Hair Removal and Fat Reduction.

With up to 50 clinics nationally Australian Skin Clinics has empowered over 2 million people to look and feel proud of their reflection.

Franchisee’s gain access to a turnkey operation supported by a nationally recognised brand. All training is provided via The Advanced Skills Academy, owned and operated

by Australian Skin Clinics; covering all areas of running a successful clinic. This is your opportunity to join the fastest growing sector in retail!

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 56 franchisees grow profitable and successful businesses.

A-Z 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.

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

Phone: 0409 720 063 Contact: Dean Lightfoot franchise@palmoasisventures.com www.baskinrobbins.com.au

A-Z LISTINGS

Phone: 0419 494 480 Fax: 03 9439 5594 Contact: Rod Parker rparker@bedshed.com.au www.bedshed.com.au/franchising

Start up costs: from $150,000 - $250,000

PROFILE: Baskin-Robbins® has been creating irresistible treats to make you smile and feel good inside and out for over 70 years. We’ve perfected the combination of delicious treats and a fun atmosphere.

Now, we’re offering rewarding franchise opportunities that help aspiring business owners thrive and to continue to be the world’s leading chain of ice cream specialty restaurants If you love to have fun and put a smile on people’s faces; if you are hard-working, dedicated and community oriented; and in touch with your ‘ice cream side’; Baskin-Robbins® may be a perfect fit for you.

Contact: franchise@palmoasisventures.com to scoop up your own Baskin-Robbins®. New sites available in QLD, NSW & VIC.

PROFILE: Bedshed, one of Australia’s largest and most trusted bedding retailers, is continuing its expansion across the East Coast with further opportunities now available in Queensland, Victoria and New South Wales.

We are looking for people who are passionate about customer service, managing a sales team, and want to work in their own business. You will have access to our accredited franchise model which has been perfected during our 30+ year history, along with the support of an established specialist team.

Take the first step towards being rewarded with the financial and lifestyle benefits of owning a Bedshed Franchise by calling Rod Parker for a confidential chat.

Read more at http://www.franchisebusiness.com.au/brands/ bedshed#tbO0B8QGRO75FLzq.99

Phone: +61 474 278 485 Contact: In Australia: Carsten Brink (Business Development Director for Asia-Pacific) franchise@boconcept.com Boconcept.com/franchise

Phone: 03 9508 4409 Fax: 03 9508 4409 Contact: Stacey Mercaldi stacey.mercaldi@retailzoo.com www.boostjuice.com.au

Start up costs: Around $600.000 AUD

Start up costs: $280,000 - $450,000

PROFILE: BECOME OUR NEW FRANCHISE PARTNER JOIN A GLOBAL FURNITURE DESIGN BRAND, OFFERING A STRONG RETAIL FRANCHISE CONCEPT From Denmark to the world since 1952, BoConcept is the brand name of Denmark’s most global retail furniture chain, specializing in premium quality interior design for the urban-minded customer and creating outstanding modern and sophisticated living spaces at affordable prices.

BoConcept has grown its global presence through a unique strategic market positioning.

With over 25 years of franchise experience, and 265 stores in 65 countries, our franchise model is a proven, strong and award-winning concept.

Our business model and core competencies are applied throughout the value chain from design, branding and marketing to production, logistics, sales and customer service, to optimize the overall sales performance in the stores.

The strong toolbox and support within all areas of business and retailing makes the setup and management of a BoConcept store straightforward. Therefore, most of our partners own multiple stores.

PROFILE: Boost Juice is an Australian franchise success story. Founded by adventurer and entrepreneur, Janine Allis, the brand has taken its winning combination of healthy fresh fruit, blended and squeezed into delicious smoothies and juices to open over 500 stores across the globe.

Boost Juice has come a long way from its humble beginnings but one thing hasn’t changed – our commitment to health, fun and loving life. Our partners are provided with an abundance of support and we strive to innovate and develop in all facets of the business. Take the steps to join one of Australia’s most loved brands today!

Phone: 1300 131 888 Contact: Hannah Giang Email: franchise.recruitment@dominos.com.au Web: www.dominosfranchise.com.au

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.

Start up costs: $480,000 - $600,000 + GST PROFILE: Domino’s is not just Australia and New Zealand’s leading pizza brand – it’s also one of the world’s most advanced digital retailers and an undisputed leader in online ordering with Australia and New Zealand’s most advanced mobile ordering apps, pizza creation app and only real-time pizza tracker.

Being a part of the Domino’s family is a rewarding way to take control of your own personal wealth and be your own boss. You’re not only joining Australia’s largest food chain but a community of passionate, excited entrepreneurs.

There has never been a better time to join the Domino’s family. Enquire now to receive your copy of our Domino’s franchise information booklet.

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: Franchise $49,500 or Investor $15,000

Start up costs: $250,000 - $350,000 PROFILE: 2017’s #1 Food Franchise (TopFranchise Awards 2017) Ferguson Plarre Bakehouse recently celebrated 116 years of baking award winning pies, cakes and tiddly oggies.

Ferguson Plarre Bakehouses are still a family owned and operated business with the 5th generation of the Plarre family still actively involved in managing 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.

With no Royalties or Marketing fees, freshly baked products delivered daily to your store and no baking required, the business is perfect for anyone with passion and a small business dream.

PROFILE: Fifo Capital provides cash flow assistance to Australian businesses large and small whilst giving a great lifestyle, excellent returns and an enviable work/life balance to its franchisees.

With over 10 years experience servicing the market and the recent release of our new Supply Chain Finance product you could not look at Fifo Capital at a better time. No experience necessary as full training and ongoing support is provided.

Below are some of the benefits our partners enjoy as members of the Fifo Capital Network • • • •

ROI of 50+% annualised* Backed by insurance Work your own hours, very low overheads Highly scalable operation

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• • •

Backed by the biggest and most successful business finance franchisors in the country.

Multiple income streams Investor options available

Phone: 03 9653 7440 Contact: Dana Vinen franchise-au@firstindex.com Partners.firstindex.com

Phone: +61 8 8267 2144 Contact: Andrew aphillips@focalpointintl.com www.focalpointintl.com Start up costs: $79,950

Start up costs: $100,000* PROFILE:

PROFILE: First Index is a fully regulated global financial services company now offering franchise opportunities, in select locales throughout Australia. The mission is to transform the trading industry by providing all Australians a new and better way of investing in a range of financial products and services, including shares, commodities, CFD’s and indexes. First Index are going beyond the offering of the typical unreliable and sometimes unregulated online trading companies, to provide your clients with a branch based model that provides the very best trading technology with unrivalled levels of service, education and expertise.

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: 08 6169 2700 Contact: Robbie Damjanovic franchise@freshii.com.au www.freshii.com.au/franchising

PROFILE:

Phone: 02 8845 0100 Contact: Franchise Development Manager franchise@gelatissimo.com.au www.gelatissimo.com.au

Start up costs: Investment levels: $160,000 - $300,000 dependant on size and location Capital investment: Financing options available from 0% deposit (subject to approval)

Join the world’s fastest growing franchise!

If you’re passionate about food that’s fresh, healthy, delicious and affordable, and you’d like to be part of a unique and fun global brand, then join the Freshii revolution!

Freshii is one of the most exciting and fast growing new franchises in Australia, with opportunities available now in prime CBD and urban locations across the country.

• Low fees and royalties • Fixed marketing fees • Flexible supplier agreements

• Uncapped earning potential • No experience necessary – we provide training, marketing and site development support

Start up costs from: $280,000

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.

Ready to be your own boss and join an international and socially conscious brand? Visit Freshii Australia today at www.freshii.com.au/franchising * T&C’s apply. All applicants will be reviewed on an individual basis.

Phone: 07 3357 62 70 Contact: Warren Ballantyne warren@guttervac.com.au www.guttervac.com.au

Contact: Keith Knapp info@ibeconnect.com ibeconnect.com

Start up costs: $79,000 + GST + freight PROFILE: Gutter-Vac is an innovative cleaning franchise using revolutionary vacuum equipment to quickly and effectively clean corporate and domestic gutters, roofs, ceiling spaces, rainwater tanks, storm water sumps and much more.

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

The Gutter-Vac network includes 80+ franchises across 7 states and territories including Queensland, Victoria, New South Wales, ACT, South Australia, Western Australia and Tasmania. Gutter-Vac now has an international brand “Outback GutterVac” based in Atlanta Georgia, USA. Gutter-Vac is a proven model that provides a lifestyle or entrepreneurial business. A Gutter-Vac franchise is an exciting and promising small business opportunity that is constructed upon a reliable foundation of simple, innovative and effective equipment, systems and procedures.

Phone: 1800 220 643 Contact: David Wilkinson sales.au@inxpress.com inxpress.com.au inxpress.com.au/franchising Start up costs: $64,950 + GST 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, Startrack and TNT to offer a complete suite of courier and freight solutions, providing increased value and service, saving valuable time and money.

Operating in 14 countries with over 350 franchisees globally, InXpress is now accepting applications to grow the Australian business. Benefits to franchisees include: • Low entry costs • Low Overheads • No inventory/warehousing

• Work from home • High income potential • Ongoing training and support

For more information about becoming an InXpress franchisee contact us now. *conditions apply

Start up costs: $10,000 PROFILE: IBE Connect is your first choice in expanding your business to the United States.

Our successful model has helped franchises of multiple industries expand by helping get their products and services compatible with the US Market.

By partnering with IBE Connect we connect you with the best tools, resources and connections that specialize in working with businesses coming into the US. Connections such as national distribution networks, legal representation, accounting, media networks, and much more. Visit us online at IBEConnect.com to find out more.

A-Z 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

Phone: (02) 8962 8556 Contact: Benoit Davi franchise@kwikkopy.com.au www.kwikkopy.com.au/franchise

A-Z LISTINGS

Phone: 03 9460 6700 Contact: Brendan Flanagan franchising@laporchetta.com www.laporchetta.com

Start-up costs: $280,000 (for a Greenfield)

Start up costs: $300,000 + PROFILE: Start your franchising journey with Kwik Kopy, the leading provider of design, print and online solutions throughout Australia.

Kwik Kopy offers a flexible franchise model, where each Centre is fully equipped to create high quality services on-site. Owning your B2B franchise means operating business hours Monday to Friday so you’ll also enjoy work-life balance.

As a Kwik Kopy franchisee you get to become your own boss and be part of a supportive community committed to your success. You’ll also receive all the training you require, so no prior print or design experience necessary.

A Kwik Kopy franchisee is young at heart with business experience, entrepreneurial flair and most of all – an absolute passion for customer service.

PROFILE: La Porchetta are the market leaders in cooking quality, Italian food with fresh ingredients. The first La Porchetta restaurant opened in 1985 in Melbourne’s inner city Italian hub. It soon became renowned as a special place to experience delicious food, warm hospitality and a passion for life. With the availability of high profile territories in Australia and New Zealand, La Porchetta is now seeking passionate individuals looking for the opportunity to become a restaurateur.

Purchasing a La Porchetta restaurant provides a fantastic opportunity to own your own hospitality business with a support network that is synonymous with outstanding Italian cuisine.

We have both existing and new locations for sale throughout Australia.

Phone: 07 55 327071 Contact: Michelle Christensen franchising@lonestarribhouse.com.au lonestarribhouse.com.au

Phone: 02 9651 3444 Contact: Dom Galluccio franchise@lockandroll.com.au www.lockandroll.com.au Start up costs: Circa ($100k) PROFILE: Lock & Roll is a specialist window and door repair, maintenance & upgrade service for domestic and commercial property owners and managers.

Our services include: • Repairs to hinged doors, sliding doors & bi-fold doors • Aluminium and timber door and window repairs • Window security • Door security • Installation of Door & Window accessories • We also have Australia’s largest range of window and door parts

PROFILE: With smiles as wide as the sky, the Lone Star Rib House offer a stimulating and energetic dining atmosphere, and a taste as big as Texas! With franchise opportunities across Australia, the Lone Star Rib House offers a proven business model with robust operations, training systems and support.

Our experienced technicians operate in the Sydney area and aim to complete most door repairs and window repairs in one visit.

Phone: 02 8115 9550 Contact: Phillip Blanco franchising@madmex.com.au www.madmex.com.au

Phone: 03 9604 9400 Fax: 03 9600 3313 robert@mmrb.com.au www.marshmaher.com.au

Start up costs: $375,000 to $550,000 PROFILE:

PROFILE: As a thriving fast casual food brand with a strong growth strategy, we are actively seeking new franchise partners. Our menu is influenced by fresh, Baja-style Mexican food made with authentic ingredients true to our roots.

We’re focused on leading the way in tasty, fresh and healthy with the freshest produce available, food made fresh every day and allowing our customers to tailor their meals to personal tastes and dietary requirements or health trends.

If you have the drive to lead the way with fresh authentic Mexican flavour, a passion to utilise your past business knowledge & skills to deliver an outstanding customer experience, all with a cheeky grin, then this journey is for you! Become your own Head Honcho at Mad Mex, enquire today!

A-Z L I S T I N GS

FOR A-Z LISTINGS ENQUIRIES CONTACT:

Well recognised and published franchise specialist with over 30 years industry knowledge and experience.

Providing advice to: 1. International Franchisors and Franchising.

2. Master Franchising.

3. Dispute Resolution – Solutions and Strategies

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Franchisee Advice and fixed fee reports.

Sale/ Purchase of franchise systems.

IP/ Trademark advice.

Company structures and tax advice.

CCC and Consumer Law advice.

We provide clients fixed fees based on the scope of work.

Contact Robert Toth on (03) 9604 9400 or by email at robert@mmrb.com.au

Phone: 0403 228 405 Contact: Andy Barratt www.minutemanpressfranchise.com.au Start up costs: $30,000—$50,000 PROFILE: Minuteman Press is the world’s largest & #1 rated print & marketing franchise.

For over 40 years, we have led the way as a top b2b service franchise. At Minuteman Press, We Are The Modern Printing Industry™ providing high quality products & services that meet the growing needs of today’s business professionals. We have developed a unique business model that offers products and services that every business needs and uses for their operational, advertising and marketing efforts. Minuteman Press has multiple revenue streams, normal Monday through Friday business hours and does not require any prior experience in the industry.

CONTACT SENIOR ACCOUNT MANAGER CHARLOTTE REDFERN ON 02 8224 8373 CHARLOTTE.REDFERN@OCTOMEDIA.COM.AU

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Phone: 02 9472 8555 Contact: Peter Elligett info@mrsfields.com.au www.mrsfields.com.au

Phone: 0413 546 565 Fax: 8 5095 456 Contact: Marc franchise@nirvanabeauty.com.au www.nirvanabeauty.com.au

Start up costs: From $199,000 Start up costs: $250,000 - $550,000

PROFILE: Mrs. Fields Bakery Café is more than a Café… Mrs. Fields is all about making people feel good through simple, special moments. Whether it be nibbling on a softbaked cookie, enjoying an award-winning coffee, roasted exclusively by Mrs. Fields or sitting down to grab a bite for lunch – whether it be a toastie, a pie or any of our other savoury offerings… we want to serve up moments made better, every time.

We have a number of delicious franchise opportunities available around Australia, so if you’re ready to call the shots and run your own Mrs. Fields Bakery Café, contact us today.

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, a personalised support network, and ongoing training through our Head Office What are you waiting for? Contact us today and join in our success.

Phone: 03 8851 4200 Fax: 03 8851 4277 Contact: Michael McNamara franchise@noodlebox.com.au www.noodlebox.com.au/franchise

Phone: (07) 3625 400 Contact: Ralph Marks franchising@novusautoglass.com.au www.novusautoglass.com.au

Start up costs: $175,000 - $200,000

Start up costs: $40,000

PROFILE: At Noodle Box we believe in the power of the mighty wok. To transform a humble kitchen into a fiery theatre. And transform the simplest ingredients into a feast that’s out of this world.

Noodle Box started life in 1996 on the back of a vision of two adventurous young Aussies who were amazed by the fiery theatre and the incredible wok-charred flavours of Southeast Asia’s hawker markets. They brought their experience back to Australia and worked with the best wok chefs in the business to bring new life to traditional recipes and satisfy Aussie tastes.

Today, Noodle Box restaurant numbers continue to grow, strengthening our position as Australia’s leading Noodle-based franchise system. And while this growth has been fueled by continuous investments in our brand, our products and our systems, our success is due to the ongoing dedication and loyalty of our Franchise Partners.

With franchise opportunities available nationwide, there’s never been a better time to join the Noodle Box family.

PROFILE: Novus Glass invented Windscreen Repair Technology. A Novus Glass franchise enables you to go into business for yourself, but not by yourself. Novus Glass is an international brand with over 55 locally owned and operated franchise territories across Australia. Novus Glass also replace windscreens and all other auto glass components. Novus Glass offers a complete franchise package covering everything from initial Technical Training through to Ongoing Marketing and Operational support.

Novus also offers its franchisees access to its unique patented products, equipment and specialty resins.

Enquire today about owning your own Novus Glass franchise – The Clear Choice for Windscreen Repair and Replacement.

Noodle Box – Wok Inspired, Market Fresh

Contact: May Chang, National Franchise Sales mchang@orangetheoryfitness.com.au marketing.orangetheoryfitness.com/franchisees-int/ Start up costs: Please enquire

PROFILE: Orangetheory Fitness is one of the world’s fastest growing franchises with over 900 studios open in 15 countries and zero studio closures globally. We’re growing rapidly across Australia but there are still some prime territories available.

Orangetheory is a one-of-a-kind, group training experience that uses heart rate based interval training to promote maximum calorie burn. Every single workout is scientifically developed and approved by a Medical Advisory Board to ensure it remains 100% results oriented.

As an Orangetheory Fitness franchisee, you’ll have the support of Australia’s largest health and wellness franchise group, Collective Wellness Group, to guide and support you every step of the way.

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: 1800 245 447 Email: joinourteam@poolwerx.com.au Web: www.poolwerx.com.au

PROFILE: Australia’s Franchise System of the Year - Twice!!

Build your successful business future with us. We have a career path in business that we can tailor to suit you. As a Poolwerx Franchise Partner, you can start small or jump right in. Join us as a man in a van, progress to multi-vans, a retail store and vans and then in multi store. Or purchase an existing fast start mobile territory or retail mobile business. Whatever your journey, we will help you realise your vision.

Our one focus is to create a profitable partnership. We do that by matching over 25 years experience and outstanding support, marketing and business development systems to your energy and enthusiasm.

For more information, visit poolwerx.com.au/franchising.

Phone: 1300 4 REDCAT (1300 473 322) Contact: Lawrence Pelletier 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 POS is an integrated end-to-end Australian-based hospitality solution, including round the clock local support, designed for the rigours of hospitality. Our system gives you the information you need to grow your business, without having to be an IT expert. From head office to store - hassle-free IT, leaving you free to do what you’re good at – offering great food, drink and service to your customers.

For 30 years, Quest has provided convenient locations, reliable standards and flexible living conditions for extended stay business travellers.

Redcat’s end-to-end point of sale, accounting and business management solutions give users total control of their business. Our customers include some of Australia’s best-known franchises, restaurants and cafés.

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.

Redcat Polygon is an integrated software and hardware solution that manages sales, staff, stock, payroll, accounts, inventory, online ordering, smartphone apps, and customer loyalty. Polygon includes web based multi-site reporting, to provide a complete business management system. Our 3rd party integrations round out the solution, covering everything from accounting to rostering.

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A-Z LISTINGS

Phone: 1300 729 900 Contact: Gary Glen franchising@schnitz.com.au www.schnitz.com.au

A-Z LISTINGS

Phone: 07 54 784 014 Fax: 07 54 777 133 Contact: Leigh Wallis leigh@smithandsonshq.com www.smith-sons.com.au

Start up costs: $500k +

Start up costs: $50,000 - $80,000 PROFILE: We all know the smell of home cooking. The recipe might be different for each of us, but the feeling of experiencing something that’s been made with love and care never leaves us, and brings us back to the table time and time again. Our mission is to extract that feeling via the crumbed goodness of a lovingly prepared Schnitzel.

At Schnitz, we’re a franchise family obsessed with schnitzel. To this day each and every schnitzel is obsessively made by hand with fresh, locally sourced, quality ingredients, and crumbed then pan cooked and never (ever) deep fried. It’s food made the right way not the easy way. We’re proud to share the happiness that only a schnitzel cooked with passion can bring.

PROFILE: We aim to make the world a better place – better businesses mean better families and better communities. Our happy, profitable franchisees own and run their own professional renovation businesses utilising the systems, tools and resources we provide. Smith & Sons is committed to seeing each of our franchisees and master franchisees reach their business and personal goals.

Phone: 03 9830 4166 Fax: 03 9888 6327 Contact: Bettina Davis bettina.davis@snooze.com.au www.snooze.com.au/franchising

Phone: 1800 762 766 sota.franchise@snapon.com www.snapontools.com.au Start up costs: from $55,000

PROFILE: Snap-on Tools 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 Australia & NZ is a wholly owned subsidiary of Snap-on Inc., a developer and manufacturer of innovative and technologically advanced tools with over 4,500 franchisees worldwide.

After 30 years in the Australian market, Snap-on Tools continues to grow with an increasing number of franchisees reaching the million dollar club, and new growth opportunities available for existing franchisees such as sales assistants, multi-units and specialised tool storage and diagnostic sales programs.

Initial training occurs in Dallas, USA and ongoing support is provided - no previous mechanical experience required. Snap-on offers an exclusive finance package to assist new franchisees.

PROFILE: Snooze has been giving Australians a better night’s sleep for more than 40 years.

These eight points form the basis of our franchise support system: Marketing and promotional support Benchmarking & KPI measurement Sales and merchandising support and comparison Product training Site selection and property Business management support negotiation IT services Store design & layout What’s needed to be a Snooze Franchise Partner?

Enjoy working with people, have good interpersonal skills, enjoy being retailers and have a strong customer service orientation. Have an ability to organise, supervise and motivate staff. Have a hands-on approach to their business and have a strong work ethic.

Phone: 1300 781 735 Fax: (02) 9150 0837 Contact: Stacy Alogdellis info@soccajoeys.com www.soccajoeys.com.au/franchise

Phone: 1800SPLASH (775274) Contact: Kylee Clasper admin@splashswim.com.au www.splashswim.com.au Start up costs: From $150,000

PROFILE: Soccajoeys has been developed by a team of childhood development experts to provide soccer programs to children aged 2.5 to 8 years.

We deliver our programs to over 35,000 children annually with over 300 classes in operation across the country.

Transform lives, including yours and become a Soccajoeys Franchisee.

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

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

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

PROFILE: Splash Swim School is a boutique custom-made swim school. We have a state of the art turnkey fit out. Our pools are custom made to suit any size warehouse. We follow Royal Life’s Swim and Survive program that is accredited Australia wide.

Full training and support. An easy 1800SPLASH telephone number to remember.

Operation system and full support Splash have their own in house architectural service, project manage and building contractor that are registered in all states of Australia

Phone: 1300 372 300 Contact: David Thomson Franchises@sportstaracademy.com www.sportstaracademy.com Start up costs: Starting From $25,000 PROFILE: Sport Star Academy (SSA) believe “Champions are made, not born” and see the potential in every child. Through sport, SSA empower kids to believe in themselves and nurture a love of sport through focused attention, dedication and simply having fun.

SSA is the number one provider of skill based sport programs, providing weekly sessions to over 5000 children nationally.

Football Star Academy (Soccer division) was awarded “Franchise Business of the Year” in the 2017 Optus My Business Awards.

Choose your franchise from the following options: Rugby, Netball, Footy (AFL), Football, Basketball, Cricket, Golf, Tennis, Sport Star Performance and Soccer Time Kids.

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Phone: 02 4957 4230 Contact: Franchise Development Manager jarrod@goodfeet.com.au www.goodfeet.com.au

Phone: 02 9723 1011 Fax: 02 9727 6771 Contact: Nick Avgerinos nicka@cheesecake.com.au www.cheesecake.com.au

Start up costs from: $150,000 to $250,000

Start up costs: New store - $389,000 + GST PROFILE: The Cheesecake Shop is one of Australia’s favourite retailers and shares in the celebrations and happy occasions of millions of people each year with their signature dessert products. With over 200 stores across Australia and New Zealand and a two time winner of the Franchise Council of Australia’s Franchisor of the Year award, The Cheesecake Shop is one of Australia’s premier franchise systems.

PROFILE: The Good Feet Store Australia and New Zealand franchise is looking for outstanding franchisees.

The ideal candidate should have solid business or retail experience, with strong management skills and business ethics. Candidates should have a customer service mentality, with the desire to enhance the quality of our customers’ lives.

Benefits of a Good Feet Store Franchise * Serves the needs of a large and broad market: people searching for relief of foot, knee, hip, and back pain * A category leader with few direct competitors * Attractive unit level economics: a proven model, The Good Feet Store is designed to generate some of the highest sales per square foot in the industry * Comprehensive branding and marketing: campaign materials and support – broadcast, in-store, online and collateral *The Good Feet Store provides full training and on-going support

Phone: 04 3909 4068 Contact: Sarah Oram franchising@unique-laser.com.au www.unique-laser.com.au

Phone: 03 9645 4798 Contact: Brad Dekkers franchise@sportingglobe.com.au www.sportingglobe.com.au/franchise

Start up costs: $100,000 to $450,000

Start up costs: $700,000+

PROFILE: The Sporting Globe Bar & Grill is Australia’s most loved sports bar and grill franchise.

Offering high quality casual dining in a social and welcoming atmosphere with a state-of-the-art sports fitout, The Sporting Globe is great place to eat, drink and catch a game.

The Sporting Globe business model has been designed to allow our Franchise Partners to focus on what is most important – customers!

With venues opening across Australia, now is the time to get involved with Australia’s fastest growing sports bar and grill brand – do something you love, enquire today!

PROFILE: Unique Laser is revolutionising the aesthetics industry…

Have you noticed that laser clinics and skin franchises all look the same? Unique Laser is the newest laser clinic and is different. Very different. We have developed a Unique, multi-award winning business model that: • Stands out from the rest in terms of initial investment, return on investment (ROI) and branding • Has exclusive rights to the fastest, newest lasers in the world • Provides complete training, ongoing support and medical supervision We have a range of partnership opportunities available that will allow you to take control of your life within a booming sector. Do not invest in another laser franchise before speaking to us. Contact to us today to see how we can change your life, and the lives of others, for the better.

Phone: 0414 669 101 Contact: Stephen Spitz stephen.spitz@xpressodelight.com.au www.xpressodelight.com.au

Phone: 1300 549 200 Contact: Kevin Bugeja kevin@franchise4u.com.au walkersdoughnuts.com.au

Start up costs from: $49,500 + GST Start up costs: $100,000 - $250,000 PROFILE: We make food that adds a smile to your day. Just one bite and you’ll know you are eating something special; something reminiscent of your childhood.

A simple model with absolutely minimal baking* in store; just filling, decorating and displaying. Our famous varieties include Boston Custard Cream, our signature Vanilla Glazed, Pretzel Choc Caramel, Cherry Bomb, Cookies & Cream and many others. Our *Hot Jam doughnuts are freshly proofed and cooked on site throughout the day. The aroma is impossible to resist!

Together with our specialty-coffee created especially for Walker’s, our Classic hot dog flavours, our soda-fountain diner Milkshakes, and our speciality Heritage Sodas imported exclusively by Walker’s Doughnuts directly from the USA, you’ll find us an unbeatable and irresistible offering.

Contact: info@collectivewellness.com.au www.xtendbarre.com.au Start up costs: From $120,000

PROFILE: Barre is one of the most popular programs in boutique fitness, with a loyal client following that continues to grow. Xtend Barre leads the barre industry with its unique teaching formula, dynamic programs and personalised approach. Founded on pilates, it’s a safe and effective workout that delivers RESULTS. When you invest in Xtend Barre, you’re investing in much more than a barre studio.

You’re joining the world’s biggest barre franchise, and an ambitious and supportive community that spans the globe.

As an Xtend Barre franchisee, you’ll have the support of Australia’s largest health and wellness franchise group, Collective Wellness Group (CWG), to guide and support you every step of the way.

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.

A-Z 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.

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

FINAL WORD

IT'S ALL ABOUT

THE NUMBERS Multi-million-dollar franchisee Leroy Day runs seven Domino’s Pizza outlets and knows a thing or two about balancing a budget. Here he shares his tips for managing the financials.

LEROY DAY Domino’s multi-unit franchisee

A

fter more than 13 years as a franchisee, Leroy Day is close to reaching his $15 million turnover target with his seven Domino’s Pizza outlets. “I go to work to make money, that’s my motivation,” he says.

In this interview, he also tells Inside Franchise Business how he manages to juggle the financial side of his enterprises.

HOW DID YOU LEARN ABOUT FORMULATING A BUSINESS PLAN FOR YOUR FIRST FRANCHISE? Domino’s provides intensive training for new franchisees to help them develop a business plan, as well as dedicated franchise consultants to provide ongoing support. My plan was pretty comprehensive. It was a three-year plan that included cashflows, a bank repayment schedule and a profit-and-loss statement.

WHAT WERE THE KEY FINANCIALS YOU INCLUDED IN YOUR FIRST FRANCHISE? Food, labour and – as pizza delivery experts – mileage were the three biggest costs I needed to factor when buying my first Domino’s store. Other costs like rent and electricity are also important.

Because my business plan was comprehensive, there were no unexpected costs. I did see an accountant for my first store to help me understand the benchmark disclosure figures compared with my own expectations. I also sought legal advice on the sub-franchise agreement so I could understand what I was signing, and what would happen in a worst-case scenario.

HOW DO YOU MAKE THE REALITY OF THE NUMBERS FIT THE GOAL? It is important to access as much information and support available to you to help you achieve your goals.

WHEN YOU BUY A FRANCHISE TODAY, WHAT ARE THE NUMBERS YOU CRUNCH? If I were to buy another store today, I would be looking closely at the population, household count and demographic information of the region to see whether there would be demand, as well as rent costs for the site. These numbers are imperative to your venture’s success.

HOW DO YOU VERIFY THE TRUTH OF THE NUMBERS PRESENTED TO YOU? I trust the numbers provided to me by Domino’s, but there are many ways you can verify figures yourself by looking at historical data and going to multiple sources. For example, you can access a lot of information online like demographic data from the Australian Bureau of Statistics and household counts from Australia Post.

ARE THERE ANY FINANCIAL FIGURES A FRANCHISE BUYER CAN IGNORE? No. If you are looking at buying a business, you need to keep your eyes open and cannot afford to overlook any figures.

HOW MUCH DO YOU RELY ON AN ACCOUNTANT OR BOOKKEEPER?

profit-and-loss statements, so I can closely monitor sales and know exactly what is happening in each of my stores at the end of each day.

HOW CAN YOU AVOID OVERSPENDING WHEN YOU BUY YOUR FIRST FRANCHISE? It can be hard to avoid overspending when you first buy a store as you are excited and want it to look shiny and new. You need to be disciplined, stick to your budget and seek information from your peers and other franchisees about how to keep down costs.

Obviously, less is best when it comes to leasing costs. This is tricky when buying an existing site that has a lease already in place, but I live by the mantra that if you don’t ask, you don’t get.

In most cases, you commit for five to 10 years, so it is important to negotiate and avoid signing a lease agreement that might be super cheap in the first year but really expensive by the 10th year.

WHAT WAS THE BEST FINANCIAL ADVICE YOU HAVE BEEN GIVEN? My best advice is buy the most expensive, best-performing store you can. You have only one shot at buying your first store, so aim for one that has the best positive net cashflow.

Also, if you are a part of a great brand, you will have access to great franchisees who are willing to share their experiences.

Learn as much as you can from those around you. That’s what we encourage at Domino’s. n

I have a bookkeeper who handles the data entry, but I manage most of the day-to-day finances myself. We have daily MAY/JUNE 2018 | 130 | WWW.FRANCHISEBUSINESS.COM.AU

SIX STORES IN FOUR YEARS.

NOW CHAD IS COOKING UP EVEN BIGGER PLANS.

Chad Cable Multi-Unit Franchisee

2016

BUYS THE STORE WHERE HE STARTED AS A TEAM MEMBER

2014

ENTERS PARTNERSHIP ON FIRST DOMINO’S STORE

201 6

SU MO A CC ST ST UST ESS OR RA FU E 3 LIA L IN A R YEA N OW RS

2017 BUYS SIXTH DOMINO’S STORE

Chad Cable’s recipe for success is simple. Have fun, work with a great team, and always be hungry for more. With a burning desire to succeed, he now plans to open ten more stores in the next five years.

Chad’s proof that a little ambition can take you a very long way as a Domino’s franchisee.

To start building your Domino’s business, visit dominosfranchise.com.au.

SEL L MO RE PIZ HAV ZA EM O FUN RE !

OWN YOUR FUTURE

With a network of over 360 restaurants across the country, Red Rooster are spreading their wings and looking for owner/operators to open new restaurants in regional and metro NSW, QLD, VIC and TAS. ENQUIRE TODAY www.redrooster.com.au/franchising JOIN THE

Chicken

Champions