BRISBANE & MELBOURNE EXPO PREVIEWS
Jul/Aug 2012 VOL.25/No.4
Your essential guide to buying a franchise
10 STEPS TO PROFIT
STEPS 10 TO PROFIT
GO GREEN Eco-friendly franchises
Buying into the
SOCIAL MEDIA GUIDE
burrito buzz What you need to know
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Contents july–august 2012 |YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE
16 Brewing success New franchise Adore Tea 20 Windows to the future A Luxaflex licensee 23 Building the brand Hire A Hubby franchisee 26 Strategy for success Getting good at retail 30 An indulgent investment The Endota story 32 Action man Living the dream 36 Sweet dreams come true Great taste of business
101 10 steps… to a profitable business 107 So you want to be… A master franchisee 110 Lessons from court Legal case reviewed
Regulars 5 Editorial 6
155 Legal 156 Sketch 158 People 161 Opinion 162 Glossary 163 Checklist 182 Company listings
40 Mexican wave The new look cuisine 52 Unleash your passion Love pets, make money 62 Give green a go Eco-friendly franchises 70 Rise and shine Bakeries and patisseries 78 Accommodating ambition Skills for the travel world 86 Join the ride! Check out the Brisbane expo 94 Walk this way Melbourne expo preview www.franchise.net.au
119 Get the data Site selection explained 122 Blueprint for a brand Branding: book extract 126 Making connections Get a social media profile 134 Staying afloat How to manage debt 142 5 steps to quick cash Invoice discounting 144 How to buy a resale franchise What to watch for
144 JUL/AUG 2012 FRANCHISING | 3
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Franchising Publisher Martin Sinclair email@example.com Editor Sarah Stowe firstname.lastname@example.org Direct: 02 9422 8900 Journalist Danielle Bowling email@example.com Direct: 02 9422 2667 Sub Editor Richie Kenzie firstname.lastname@example.org Direct: 02 9422 8851
Bumper issue, packed with goodies
National Sales and Marketing Manager David Strong email@example.com Direct: 02 9422 2905 Contributing Journalists Domini Stuart Donna Bennett Columnists Greg Nathan Andrew Terry Esther Gutnick Production Co-ordinator Eryk Koziol firstname.lastname@example.org Direct: 02 9422 2379 Creative Art Director Julie Coughlan email@example.com Designer Louis Santos firstname.lastname@example.org Managing Director Jeremy Knibbs email@example.com Editorial Inquiries Tel: 02 9422 8900 Advertising Inquiries Tel: 02 9422 2905 Fax: 02 9422 2722 Subscription Inquiries Tel: 1300 360 126 Fax: 02 9422 2633 Franchising is a publication of Reed Business Information ABN 132 719 861
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SARAH STOWE Editor
re you feeling inspired to shrug off winter and try something new and exciting? Are you ready to take charge of your career? Well, there is plenty of inspiration in this, our biggest issue for five years, starting with the kikki.K franchise opportunity. There are tales of dreams come true from franchisees, from business coaching to handyman work to retail; and stories of success from new and established franchisors. Whether the appeal of running your own business is all about facing the challenge or carving a financial future to meet your goals there will be something in our Opportunities section to inspire: will you get a taste for the hot new Mexican wave, make money out of a passion for pets, dip into the environmentally-friendly trend, be tempted by an old favourite – bakeries and patisseries, or reserve a place in the hotel and accommodation field? To ensure you get a good look at what’s in the marketplace it really is worth paying a visit to an expo dedicated to the franchising and business opportunities market. Coming up are the two day Brisbane show in July and the three day expo in Melbourne – we preview both events in this magazine. When you’re at the expos take time to pick up some expert advice, either through the seminar program or at the free advice centre. Because getting guidance and tips on the ins and outs of franchising will stand you in good stead – that’s why you are reading Franchising magazine! In this issue we take a look at a recent court case in which the judgement favoured the franchisees with a million dollar award. It’s a pivotal case, and we’ve reviewed what the outcome means to anyone looking to purchase a franchise; this is a must-read. Check out our financial features in this issue too: Kate Groom has pinpointed 10 ways to make your business profitable, we look at how to manage debt, what to look for when considering a resale franchise and how to get your hands on cash – quickly. Add to this features on social media, branding and the role of a master franchisee and you’ll have plenty to keep you reading. And with this bumper edition comes a bonus magazine for free, our popular supplement The Profiler, which gives you a taster of business opportunities and services that could be just right for you.
Are you ready to take charge of your career? Well, there is plenty of inspiration in this, our biggest issues for five years
Sarah Stowe Editor
This year we are thrilled to be celebrating the 25th anniversary of Franchising magazine.
Next month: our special anniversary edition WWW.FRANCHISE.NET.AU
JUL/AUG 2012 FRANCHISING | 5
News ONLINE NEWS | WWW.FRANCHISE.NET.AU
Subway franchisee faces court The Fair Work Ombudsman has launched a prosecution against the operator of four Subway outlets in Newcastle, in regional NSW, over more than $50,000 in alleged underpayments of 11 young employees. Facing court is Nicole Patrice Dawe, of Medowie, who part-owns and operates four Subway franchise outlets. It is alleged Dawe was centrally involved in underpaying 11 employees at the four Subway outlets a total of $56,585 between 2006 and 2011 and that the majority of the underpayments affected employees aged between 15 and their early 20s. Employees were allegedly being underpaid the minimum hourly rate and some were also underpaid annual and personal/carer’s leave entitlements as well as payment in lieu of notice of termination. The biggest individual underpayment alleged is $18,512. A D _ F R F U R MA Y _ 1 2 . p d f P Dawe was allegedly also involved in failing to comply with Notices to Produce
employment records, keeping proper employment records and issuing pay slips in line with workplace laws, as well as committing multiple breaches of workplace laws. She faces maximum penalties of up to $6600 per breach. Fair Work Ombudsman Nicholas Wilson said a decision to prosecute was made because of the significant amount involved for vulnerable, young workers and the E employer’s failure to rectify the matter. The Fair Work Ombudsman is also seeking a Court Order that any penalty imposed on Nicole Dawe go towards rectifying the alleged underpayments of the employees.
Brian Tap, regional director for Subway Systems Australia, commented on the allegations. “We take any breaches of the Fair Work Act very seriously and we are looking into this disturbing matter,” he said. “Each Subway Restaurant in Australia x ispindividually E r t owned F randaoperated n c by h i independent franchisees; franchisees being responsible for hiring, training, remunerating and managing their staff according to law. “We expect franchisees, as small business owners, to follow all laws and regulations pertaining to operating – the number of Pizza their businesses. We encourage all our Hut pizzas sold over a seven day period franchisees to treat employees fairly as it on the LivingSocial website, making it is in everyone’s best interest to do so and a g 4 fast 1 9 food / 0 4transactional / 1 2 , 3group : 3 0 PM thee largest it recognises the contributions that indibuying deal in Australia vidual staff members make,” said Tap.
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News ONLINE NEWS | WWW.FRANCHISE.NET.AU
The Athlete’s Foot steps online Franchise retailer The Athlete’s Foot has launched an online shopping facility on its website after working on the e-commerce project for a year. Part of the RCG Corporation, The Athlete’s Foot offers a footwear fitting service in its 140 Australian outlets and has been at pains to include fitting aspects to the online store. Ivan Hammerschlag, RCG chairman, told Franchising that web customers can answer questions around weight and running style online to get recommendations on appropriate footwear. They can take advantage of a 100-day free return service, and visit their local store for a fitting service too. “We encourage customers to go in store
A Queensland-based air conditioner cleaning franchise, HydroKleen, has signed up 13 new franchisees in as many months and plans to double in size by next year Crust Gourmet Pizza has launched a mobile app, available now on iPhone and Android at the App Store and be fitted, but people want to shop online. We need to offer consumers the ability to shop on the web. “We expect to leverage off the growth in the digital channel, with the aim of delivering both additional sales and conveying our fit and service message in more relevant ways to a new audience.” The move to web sales is also aimed at recouping some of the spend on
overseas online sites, Hammerschlag added. “There has been some leakage to offshore websites and we want to gather some of that business back. Our Shoe Superstore business, which is only small, takes 15 percent of sales on the web. “The launch of the e-store is a pivotal step in the execution of The Athlete’s Foot multichannel retail strategy,” he said.
FRANCHISING MAGAZINE LAUNCHES NEW LOOK WEBSITE To celebrate our 25th anniversary we’ve relaunched our website with a fabulous fresh design and easy functionality.
Scan to go direct to the website
Cake franchise, The Cheesecake Shop, has launched a new 30 second television commercial – its first in more than a decade – highlighting the journey of the cake from oven to customer
Our twice-weekly e-newsletter is also boasting a new look and is packed full of the latest industry news and views, delivered straight to your inbox every Monday and Thursday. Features at www. franchise.net.au include: - A lively home page which showcases the latest and best from the franchise sector - Great new sections which allow you to source the stories, news and advice
that interests you - You can view and add comments on features and start a discussion - It’s one simple step to join our Facebook and Twitter communities - Click on the Magazines tab and read our digital editions - Source franchise brands using our Directory, updated with Google maps - Look for business support in our new Suppliers listing
BSR Group has awarded its high flying retailers and suppliers at its annual conference in Santa Monica, Los Angeles, with Betta Home Living Wilsonton from QLD taking out the Large Branded Retailer of the Year award for stores larger than 650 square metres Muffin Break has scooped its third consecutive win in the Roy Morgan Customer Satisfaction Awards, putting it in the lead to claim the title of Coffee Shop of the Year A new president, David Allen, will head up the Australian arm of Danish jewellery brand Pandora from July 1. Just Cuts is offering a new retail concept in the form of hair cuts at a kiosk, with the first instalment being unveiled at the Westfield Doncaster shopping centre in Victoria The chairman, and long standing board member of Zarraffa’s Coffee, Tony Williams, has resigned
“It is important
for persons looking at buying into a franchise to put [in] careful thought and investigation as well as getting proper legal and financial advice.” - Tony Garrison, partner at law firm HWL Ebsworth, www.franchise.net.au
JUL/AUG 2012 FRANCHISING | 7
Sharpen your pencils, the distinctive kikki.K brand is looking for franchisee partners to help grow the business
he retailer kikki.K is a
multi-award winning design brand with a Swedish heritage. Its price points range from as low as $1.50 for a felt tip pen up to $500 for items in the premium leather range, Stockholm. At the helm are creative director Kristina Karlsson, and her partner, CEO Paul Lacy, who began the business in Melbourne 12 years ago. Paul Lacy answers our questions. Why is the brand successful? “Beautifully designed stationery is a small everyday-use luxury, a
8 | FRANCHISING JUL/AUG 2012
little indulgence often under $50 that just makes people feel good. It’s a more affordable option than say a new clothing outfit, but can make people feel just as good as an expression of their style. Our business has grown based on customers’ love of our unique products and passion for stationery and Swedish design.” How committed are you to franchising as a model, rather than just a means to finance overseas expansion? “There are about 10 Australianbased stores we’re looking to sell as franchises at the moment – Belconnen, Kotara, Macarthur,
Geelong, Brighton, Bowral, Erina Fair, Tuggerah, Glenelg and Hyde Park. Franchising these boutiques will provide us with additional capital to support the funding of further international expansion
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throughout Asia and beyond. We clearly understand what is required to be a world class franchisor and we’re completely committed to franchising as a model and to supporting the success of the people who join our team as franchisees. “We’ve been assessing the potential of franchising for years because of the unsolicited requests we’ve received. But it’s really been since Janine Allis (Boost Juice founder) joined our board over a year ago that we’ve carefully considered and planned the strategy. Over eight months ago we hired Janine’s former CEO International, Jacinta Caithness, to head-up our franchise strategy.
could scale up and roll-out stores quickly and productively across the country and eventually the globe. “Having opened 82 stores in 10 years across Australia, New Zealand and Singapore, with compound double digit revenue growth year on year, there’s strong evidence our systems and processes are good. These systems now provide a brilliant base for our franchising model. Enabling us to redeploy capital for our ongoing international growth is just one element among several key reasons for franchising. “We believe it’s possible that franchise stores could be more productive than company-
We’ve always focused on developing turnkey systems and processes that support our store teams and enable stores to thrive “We’ve always focused on developing turnkey systems and processes that support our store teams and enable stores to thrive. We’re Melbourne-based and our third store was opened in Sydney, precisely to force ourselves to create brilliant systems and processes that would ensure we 10 | FRANCHISING JUL/AUG 2012
owned stores – and we really want to test that theory; we believe franchising could be a relevant strategy as we roll-out across the globe and we want to build our experience with the franchise model domestically. And we’re excited at the thought of welcoming external parties into
our business, bringing with them different experiences and fresh ideas for the benefit of the entire network. “We’re a very open and learning focused business plus we love and encourage the exchange of ideas and experience within our business. “It’s a very clearly thought through strategy. We’re totally committed to very quickly becoming a world class franchisor and valuable partner and we feel confident in our ability to execute a domestic franchise strategy that supports the success of franchisees.” What are the Asian expansion plans? “We’ve currently got three kikki.K stores in Singapore and see strong opportunities there. We’ve also had numerous strong inquiries from quality landlords across Asia and from potential partners wanting to purchase the rights for various countries. We’re being very careful to work through the opportunities and choose the right locations and partners which will provide the perfect alignment for our brand.” What will the franchise offer be? “We’ll be offering prospective partners the opportunity to buy existing kikki.K stores that have strong trading histories and very well established customer relationships. “In terms of training and marketing support – as well as operational, visual merchandise and product support for that matter – the program we have in place to support franchisees in the operation of their own kikki.K store is very robust; it’s been improved on a day to day basis across 82 stores in three countries by our store managers.” How much control will franchisees have in terms of merchandise? “A key to the success of kikki.K is our merchandising approach and
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the combination of strong design and innovation (we drop new product into stores around every three weeks). It’s vital for the brand and the success of all stores and partners that we maintain consistency of product ranging and merchandising so we’ll have strong controls in place to support the success of franchisees. “We’ve invested heavily in merchandise forecasting tools to deliver automatic replenishment, all on an individual store basis. “This works so successfully for our company owned stores, we would envisage that each of our franchise partners would also opt
Having opened 82 stores in 10 years across Australia, New Zealand and Singapore, with compound double digit revenue growth year on year, there’s strong evidence our systems and A D _ F R MA D MA Y _ 1 2 . p d f Pa ge 1 1 4 / 3 / 1 2 , 9 : 2 0 AM processes are good
into using this system, enabling ease of ordering and stocktake etc. “There are differences between stores in terms of sell-through on individual product lines and our system is sophisticated enough to determine the variances which may be required between stores. Our franchise partners would also
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have input into this as our store managers in company-owned stores do now.” Retail is a tough market right now, why should a franchisee invest in the brand? “That’ll be up to each individual, of course. The strong interest we’ve had from people in buying a kikki.K franchise over the years,
Award for Innovation and we really feel the kikki.K journey is just getting started and there are some very exciting times ahead for all of our stakeholders. Now is as good a time as any to join us on the journey. “We’re only looking to sell six to 10 of our existing companyowned stores initially. The purchase prices we have placed
We’ve invested heavily in merchandise forecasting tools to deliver automatic replenishment, all on an individual store basis and recently, indicates many people already have their own reasons. “Personally, Kristina and I have grown the business for 12 years through a few cycles and we’ve always seen opportunity in both good times and challenging times. We’ve recently been nominated for a World Retail
on each of them we feel are competitive – and we’ve been really encouraged by the number of unsolicited inquiries we have received as well as the interest that our franchising initiative has generated from within our existing network and kikki.K community. “We’re very proud to be a new
generation retailer – really open and innovative – and we have a very strong, motivated and engaged retail team, providing on-the-ground operational expertise, and linking back to in-house departments of design, merchandise, human resources, marketing, finance and IT. In operating our 82 company-owned stores we’ve developed a very strong retail and head office infrastructure for all our kikki.K franchise partners to tap into and benefit from.” What are you looking for in a franchisee, other than passion for the brand? “Since day one, it’s been our passion that has played a huge part in driving the success of the business. Not just us personally, but each and every member of our wider team. We’re looking for like-minded people who will strive to work towards our brand vision.” F
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SUCCESS With ambitious growth plans and a commitment to educating consumers that there’s more to tea than English Breakfast, Adore Tea is serving up an exciting new opportunity for motivated self-starters
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espite being the second most consumed beverage in the world next to water, tea seems to play second fiddle to coffee in today’s food service world. But not for long, if Adore Tea’s Marc Nieuwenhuys has anything to do with it. He launched the Adore Tea concept about four years ago and is now ready for fast, fruitful growth through franchising. “We were waiting until we were able to support multiple stores. When we decided to franchise about 18 months ago we only had one store so we really felt that to be able to offer a good solution we needed to have multiple stores so that we could try our procedures, so we opened two more company stores,” Nieuwenhuys tells Franchising. “Once we had them up and running and successfully trading we felt like we were ready to handle more.” WWW.FRANCHISE.NET.AU
Adore Tea is now offering franchising opportunities in two different formats: the retail store, which will also includes a Tea Espresso bar where consumers can get a top quality, loose leaf takeaway tea, and the tea house. The former sells a wide range of tea and tea products while the latter also operates as a café of sorts, serving tea with a range of sweets and snacks. There is currently one tea house operating in Canberra, and while Nieuwenhuys is keen to grow this area of the business and is considering potential sites in Sydney, he’s focusing more on the retail stores which he says will be able to see the business grow at a quicker pace. The tea house also requires much more of an investment from the franchisee, both in terms of funds and effort. “It’s a little bit harder to operate. It takes more staff and it takes a very skilled
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operator to manage. It’s the hospitality industry. So in a retail store you can train someone, put them in [store] and they can open. You only need a couple of staff and you’re good to go. To open a full size tea house like one of ours – our tea house has 68 staff on a roster, five managers and it seats 260 people – it’s a really big venture and you need a really committed, experienced person to do that,” he says. Despite not having any
franchisees signed up just yet, there is strong interest in both areas of the business and Nieuwenhuys has some serious growth plans. “We’re looking at opening about five new retail locations this year in Sydney, and we’re looking at one possible tea house location in Sydney as well. We’ve got huge amounts of interest in Melbourne as well, so we definitely want to see three to five stores in Melbourne this year. We’d really like to see a total of at least 10 to 12 by the end of the year, and then next year I’d like to open 20 more.” On the lookout for new franchisees, Nieuwenhuys says people considering the tea house format will need to have some hospitality experience, but if they’re considering a retail store, all they need is to be a very motivated people person. “In a word, we’re looking for people that are prepared to be passionate about the product
Adore Tea has tea houses and retail stores
18 | FRANCHISING JUL/AUG 2012
We’re very customer experience oriented and we want to educate people correctly about tea and passionate about providing an extremely high level of customer experience, which is what we believe very strongly in. We’re very customer experience oriented and we want to educate people correctly about tea.” Nieuwenhuys has made the Adore Tea concept as low maintenance as possible for franchisees, who he’d prefer be
on the floor, interacting with Adore Tea’s Chocolate and Truffle Rooibos tea customers than working the books behind closed doors. For example, the company runs an automated purchase order program, which means that every Monday the warehouse receives an automated purchase order from the stores, ensuring that they are replenished and fully stocked each week without the franchisee having to manually place an order. But that doesn’t mean Adore Tea franchisees can rest on their laurels. Before setting up shop they must learn the ins and outs of tea – all 200 of them – and must be prepared to not only take advantage of the consumers’ increased interest our slogan at the moment. blends, but understanding a little in all things tea, but to also We’re operating successfully, bit more about where it comes teach them about how best to and premium quality tea is, from, why it tastes different, how enjoy a brew. especially with the financial it tastes different and how to get “We have a really good different flavours out of different training program in place to get AD_ F ROUT NOV _ 1 1 . p d f P a g e 1 1 3 / 1 0 / 1 crisis 1 , in3 the : 1world, 5 P aMlittle luxury that everyone can still afford, so teas,” he says. people to understand tea, so we’re in a good niche market”. F “Tea is the new coffee, that’s not just understanding all 200
Scan here to see our video interview with Nieuwenhuys at the recent Sydney expo
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Brand innovation and support - what a difference a license makes
WINDOWS TO THE
shley Robinson can speak to the power of a brand; his family has been selling Luxaflex blinds for more than 30 years. The Robinsons have been in the window blinds business since 1976 – first selling Venetian blinds from home, then moving into a showroom in 1988, and running a heating business alongside. When they snapped up the Luxaflex Window Fashion Gallery license for the Castlemaine area they were only the third Victorian business to embrace a licensee opportunity. Once the licensee program was set up, the business grew very quickly, says Ashley, who has
We don’t look at what others are doing, we just do the best we can and let them catch up 20| FRANCHISING JUL/AUG 2012
worked in the family business for 12 years. “We knew if we wanted to stay the market leader in the area we needed marketing innovation and we knew it would set us apart. It’s an opportunity to showcase the entire range, to get marketing support, displays and support fro m the company.” Taking on the license meant increasing the showroom size by 50 percent and a boost to the family of three managing the business with two staff members. The business had previously had access to the full ranges but needed a better showcase to take advantage of the 70-odd products to show customers. “This gave us greater exposure to a bigger market, and it paid for itself in the first 12 months. We had products customers had never seen. We experienced high growth for four or five years.” Ashley admits the inevitable plateauing of business has meant growth has dropped down but it’s still at a more than respectable 10 percent, given the climate and a more cautious clientele. The $5,000 spend on blinds is still taking place, but less regularly; quality conscious
customers are avoiding hurried purchases and waiting until they can afford to buy their pick of the range. The clientele has changed in the last five years too, he adds, as the town of 8,000 people becomes more of a Melbourne commuting spot, just 90 minutes from the city. But while there’s another Gallery at Ballarat, one hour away, and other Luxaflex suppliers even closer to Castlemaine, Ashley is unconcerned about competition. “We don’t look at what others are doing, we just do the best we can and let them catch up.” As licensees in the system, the Robinsons can offer customers a 20/20 guarantee – if the customer isn’t happy with the blinds they’ve chosen, they wait 20 days after installation and can then change them
A Luxaflex window fashion gallery
The Robinson family
for a fraction of the cost – and get the new blinds within 20 days. “It offers peace of mind,” says Ashley. When it comes to business support, he says the Luxaflex parent company, Hunter Douglas,
This gave us greater exposure to a bigger market, and it paid for itself in A D _ F R MR R J U L _ 1 2 . p d f Pa ge 1 2 9 / 0 5 / 1 2 , the first 12 months
does its part. “Our sales manager gives us good support and we see him quite often. I’m in constant contact with marketing, and we get good back up from the call centre.” Ashley has noticed a spike in customer inquiries when he mentions the website in his radio ads – there is a store page 1within 0 : 5the 1 Luxafl A M ex website that takes customers directly to the Robinsons’ business. F
For more information contact the National Support Office
07 3622 2888 WWW.FRANCHISE.NET.AU
JUL/AUG 2012 FRANCHISING | 21
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Franchisee|Inspire Paul Minords
It’s all for one and one for all at Hire a Hubby, where Sydney franchisee Paul Minords and his fellow Hubbies share a common goal
or Paul Minords, Hire a Hubby franchisee in Sydney’s Neutral Bay, no two days are the same. “I do a lot of hanging doors and a lot of carpentry work but today, for instance, I’m doing some painting, and I’m doing a little bit of fencing this afternoon. It varies so much. Yesterday I was up on the roof doing some gutter work. You couldn’t put a typical day down, and that’s what I like,” he says. After working for himself in the UK as a carpenter then moving to Australia and being employed by a door company in Brookvale, Paul was keen to get back to working for himself,
and Hire a Hubby, the mobile handyman franchise, was a perfect fit. And while he has experience in a trade, other Hubbies don’t, and it’s certainly not a requirement by the franchisor, Paul adds. “A lot of the Hubbies are from the corporate world. You need to have hands-on skills. You need to know how to use tools and be confident using tools, and know what you’re doing. But for the guys that need a little bit of tuition on certain things, there is in-house training.” Support doesn’t just come from the top end either. Paul says there’s
a strong camaraderie between the Hubbies, who without hesitation will lend a helping hand on other franchisees’ jobs. “Around my territory I’ve probably got five or six Hubbies that would come to site with me at the drop of a hat, if need be. We all do it for each other,” he says. “I’ve heard that a lot of franchisees [in other systems] are fighting one another for business, but we’re all Hire a Hubbies, so if the Hubby next door to me does well, he’ll make my business do well. We’re trying to build up the brand as a company, not as individual owners. “I come from the building JUL/AUG 2012 FRANCHISING | 23
Word of mouth recommendations are the best form of marketing, says Minords
game back in England so I’ve got all the skills I need but some of the other guys will call another Hubby and say ‘can you help me out on this job?’ and then they’re learning as they’re earning. We’ll go through what needs to be done
and we’ll spend all day with them if need be, teaching them how to do that job. They’ve always got us to back them up, to call on us if they need any advice,” Paul says. Another advantage of the Hire a Hubby system is that franchisees
have the flexibility to define the parameters of their work. “I don’t get involved with creepy crawlies... I don’t want to be crawling under houses. There’s some stuff as an individual that I don’t want to do. So I’ll go and have a look at the job and point the customer in the right direction for someone who will do that.” And while he might not make any money from these referrals, Paul says it’s going that extra mile for a customer that will keep Hire a Hubby front of mind for the franchise’s clients, which at the end of the day can only be of benefit to his own business. “The franchisor does most of the advertising for all of the Hire a Hubby team and I did leaflet drops when I first started, but generally it’s recommendations. Mrs Jones down the road tells Mrs Smith that Paul from Hire a Hubby is capable and does a good job, then she employs me and it all snowballs from there.” F
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One of the things I looked at when buying a franchise was;
I didn’t want to buy a job, I wanted to buy a business.” Andrew Edsor, Quest Franchisee at Quest North Ryde and Quest Bondi Junction
For over 20 years our trusted franchise model has proven itself as an outstanding performer in the corporate travel industry. With more than 140 locations across Australasia, Quest provides the perfect opportunity to run your own business within a well-established and successful organisation. We’re searching for franchisees with demonstrated business acumen in any industry to leverage their capabilities in one of our new or existing Quest locations.
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Your perfect travel companion
Bedshed is forging ahead in a tough retail climate. Franchising spoke to Gavin Culmsee, chief operating officer, to find out how
he company started out selling water beds then evolved into tubular steel framed beds, and now stocks contemporary bedroom furniture, mattresses and manchester. Culmsee says “We’re happy with our performance on growth this year. “This is a pretty experienced franchisor, we’ve been franchising for 30 years, so of course that helps. We’ve been through tough times and the people in the head office have been in retail for some time. “We also have a very committed group of franchisees who add value to Bedshed.”
So what’s the key to getting ahead in retail?
An inclusive approach to franchising means that franchisees are involved at a strategic level of the business, explains Culmsee; for instance, joining the overseas buying trips. “In retail it’s always an uphill battle to get product compliance, but we do the hard work upfront. It means franchisees are behind the choices.” Up to 15 out of the 30 franchisees in the network might travel and get involved in the buying process, selecting and fine tuning product choices and keeping an eye on costs. The chain has no central storage facility. “We import directly so that cuts freight costs,” says Culmsee. Franchisees must maintain their own inventory, typically stored in a 500 square metre off-site warehouse. “We can deliver to the customer very quickly, that’s our major competitive advantage.” Some franchisees will land containers every week, he adds. “The trend is for buying quality product, there’s been a real resurgence at the upper end in the last nine or 10 months. People are buying to last but there will always be a constant demand for lower priced products such as kids’
Gavin Culmsee 26 | FRANCHISING jul/aug 2012
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mattresses. People come to us for advice, that’s part of being a bed specialist.” Culmsee believes the biggest retail cost is occupancy and the franchisor will offer to negotiate or renegotiate leases on behalf of franchisees. Landlords now are a bit more open to discussion, he says. The retail footprint is between 800 and 1000 square metres, and a franchise will cost about $500,000.
There are some common traits spotted in Bedshed’s successful franchisees: 1. Franchisees are team players One of the advantages of joining a franchise is the support from other franchisees and the franchisor; you don’t have to go it alone. There’s a network of franchisee partners who draw on each other to address their individual business challenges and share tips and tricks. At Bedshed this is backed up with three decades of franchise experience.
2. A passion for customer service As online shopping continues to grow, it’s important for bricks and mortar retailers to value-add for customers in store. Customer service is the key to competing with the popularity of online shopping. Successful franchisees have a can-do attitude and their customers are always their first priority.
3. On the frontline
store set-up process for There are 40 stores, of which At Bedshed, we have seen time and time again that franchisees is key, he says, 10 are company-owned, and franchises are most successful when the franchisee is directly so it’s preferable to match expansion across the chain involved in the day to day running of the business. A retail a franchisee to the right has been through multiple franchise is not a set and forget investment so the more you store rather than establish a store ownership, but there’s put in, the more rewarding it will be. Franchisees who are company outlet first. still plenty of room for passionate about what they do can gain valuable knowledge “We’re looking to open growth, Culmsee insists. about their business by working alongside their sales staff on in the right places, so five or “In our network there’s a a daily basis. They also enjoy the advantages of being their six stores a year. We want to massive opportunity in NSW, own boss and setting their own hours. make sure our franchisees some in Queensland and a are happy with their great opportunity in Tasmania 4. Learning new skills returns.” for a franchisee in Hobart and While it is useful for potential franchisees to have some Retail experience is not one in Launceston. There are background in retail, and the market they are working required of franchisees, only two stores in NSW (in in, or experience of franchising, it is far from essential. At Culmsee adds. “We’ve got Mittagong and Warners Bay Bedshed franchisees have come from fields as diverse as ex-auditors, fitters and near Newcastle). We can open the metal working trade and corporate accounting. Many turners; we want people who 30 stores without impacting people find the skills they have from vastly different roles are AD_ F RJ ANJ UL _ 1 2 . p d f Pa ge 1 1 2 / 0 6 / 1 2 , 1 1 : 0 7 AM have the right outlook and on our existing stores.” transferable to their new career as a franchisee. want to be a part of this.” F Involvement in the
Clean UP a Jani-King
www.janiking.com.au 28 | FRANCHISING jul/aug 2012
Mel Gleeson and Belinda Fraser created the endota spa brand at the ripe old age of 26. Now, more than 10 years later, they have their sights set on nationwide growth
lucky business is one that is able to both weather a financial crisis and be somewhat immune to the effects of online retailing. That’s exactly the position that beauty spa franchise endota spa is in today. Co-founder Mel Gleeson says, “You’re still going to get your eyebrows waxed. I think people might not splurge on big holidays [during tough times] but they still want the girls day out or a couple of hours to feel relaxed. Also, I think
30 | FRANCHISING Jul/aug 2012
our retailing hasn’t gone down because we’re an experience. So you come in-store for the experience. You can’t get a massage online.” Endota spa launched in 2000 and today there are 66 spas across the country, which, when Franchising spoke to Gleeson, was expected to jump to 70 by the end of the financial year. The franchise offers beauty treatments including waxing, tanning, massages and facials as well as spa treatments, and it also has a retail element, selling its own certified organic
beauty range, a glycolic skincare range and a nail lacquer range which it sells in-store, online and in David Jones. Expansion and product innovation are two key goals for the two friends and business partners. “Even though there’s a lot of doom and gloom around, our spas have increased in turnover on the last year when we compared like for like, so it’s about refining the system that we have, and finding motivated franchisees to grow our brand in
our new states. Queensland and WA in particular are our focus,” explains Gleeson. “Some of the exciting things that we’re doing are around strategic planning and research, so we’ve talked to industry experts – retailers, CEOs from different spa companies, cosmetic surgeons, Victoria University – about endota and where we should be heading in the future, and one of the things that stands out for us is developing an anti-ageing range with measurable results. “So that’s a focus for the product company at the moment, and for the franchise company it’s to get to our goal of 130 spas in Australia. We’d like to reach that by 2014,” says Gleeson. Franchising is the best way for her and Fraser to achieve this goal, she says, not only because she believes franchisees are often more diligent and motivated than managers, but because it allows them to grow quicker than they ever could independently. Not surprisingly, the majority of endota’s franchisees are women, particularly ones who’ve
previously led a corporate life, and while this isn’t a prerequisite at the franchise, a passion for the brand is essential. “We’ve been really lucky because even now when we talk to our business owners
and our therapists, they love the endota brand, and they actually want to perpetuate that. We haven’t had people, and I know this happens in franchising networks, trying to manipulate the brand at all. It’s fantastic,” says Gleeson.
Making sure all franchisees are on the same page and that the endota vision is maintained despite its steady growth is a priority for the two founders, and is ensured by staying in close contact with the whole endota team. “I think it’s about making sure we communicate effectively with all the stakeholders – our head office team, our business owners, our therapists – and we do that a lot. We have days where we get together, and Belinda and I have recently been on a roadshow visiting a lot of our spas, talking to the therapists. “The main thing is that I think everyone in our network, from therapists to business owners, got into this industry because they want to make people feel better. So everything we do, we’re striving to reach that goal and that’s really the driving force that unites us.” F
endota spa’s retail range
Jul/aug 2012 FRANCHISING | 31
man A franchise lets Andrew Laurie live a dream lifestyle
ndrew Laurie has run his own Action Coach franchise since 2009. And it allows him to live the lifestyle he and his wife have planned for themselves and their two young sons. What Andrew describes as “bad fortune” gave him the chance to review his life a few years ago. “When I was skiing in Canada I fell off a 100ft rock cliff, and had to be resuscitated. During convalescence I came up with a goal of what I wanted to achieve in 20 years; I came up with clarity about how to live. “I was still single, going through the evolutionary career trajectory. I went to uni and did the course I was expected to do, that led to the logical job, I did reasonably well, took the logical next step, without having thought what was my real direction. “I decided that to achieve what I wanted in 20 years I’m going to have to be running a one billion dollar company; and in five years I’d better be running a company. So I need to learn about business, so in two years I need to do an MBA, and get it from the best school in the world.” 32| FRANCHISING JUL/AUG 2012
Armed with experience at Ansett, and in corporate travel in Hong Kong, Andrew embarked on the MBA before becoming managing director of large travel chains in the UK. His work gave him the opportunity to travel, and to indulge his taste for adventure sports – climbing, skiing, sailing – around the world. But after a few years it wasn’t all a joyride. “Being able to say to people, ‘I’m 35 and CEO of a multi-million dollar company’ was the only thing I really liked about my job.” What he didn’t like was the stress, waking up at 3am anxious about the business. Andrew had met his Belgian investment banker wife in France, and they were living in London with their son when it came to the career crunch. “We took 18 months to travel around and decide what we wanted to do.” Settling in Sydney, the couple still intended to lead some of their life in Europe – “all four of us ski, climb and www.franchise.net.au
sail.” He knew he couldn’t be an employee working full time. “I knew I wanted to build businesses and coaching on business was a reasonably obvious move.” But an Action Coach franchise was an accident. Andrew had plans to start his own business and went to a seminar for competitor analysis. “I didn’t know much about it, or that it was a franchise. I saw [founder] Brad Sugars presenting, thought it was good stuff, and got chatting to other coaches.” At the time the business was launching a territory-based franchise model. “My goal was always to build a business that could live and breathe without me. The territory model appealed.” He spent two months on due diligence. “I did everything you should
Weekly Media have discovered a new and improved way to feed your appetite using a full range of top selling Australian magazine titles along with International publications, and all it takes is the single push of a button. The new magazine media station is packed with Australia’s most popular lifestyle titles and is attracting a generous dollar through combining convenience with on-the-move retail solutions. The concept is simple, the start-up is supported, the potential is endless and the opportunity is yours. Beyond its contemporary exterior, this advanced magazine display represents direct marketing with strategic edge in premium locations 24 hours a day, 7 days a week. That’s right, even on public holidays. The street savvy media kiosk appeals to a collective audience of children, teenagers, adults and seniors to forego the hassle of unplugging earphones, ceasing to talk on mobiles and cueing up in crowded shops in order to consume their literary fix. From the moment you jump onboard this rare and exciting investment opportunity, you are assured that you are not alone, with Weekly Media offering installation, training and support to help you achieve your business goals. Gone are the days when you need to wait at busy retail outlets to purchase your top-selling magazine titles, such as GQ, Cleo, Good Health, Woman’s Weekly, Rolling Stones, FHM and many more. If you’re running late to a flight, bored at the train station, or perhaps you’re just enjoying the attractions of your local city; consumers will be drawn to the ease and benefits of our self-automated newsstand showcasing the latest headlines. European engineered with quality materials in a streamlined design and modified for the Australian market, the advanced media stations now offer not only magazines but newspapers. Weekly Media’s new business opportunity represents a blue chip investment for those seeking a new and flawless market concept. This superior stream of newsstand allows you to take your share of the multi-billion dollar print and media industry without the need to become an expert in sales. The beauty is in the packaging when it comes to modern marketing tools and Weekly Media are offering you a chance to be a part of a real head-turner; an innovative product that will establish a profitable business that manages and markets itself. The Weekly Media advanced magazine media stations will be popping up at a corner near you, the question is whether you’ll be the one who’s reaping the rewards.
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Andrew leads an action-packed family life
do. When I first spoke to franchisees the story I got seemed too good to be true, then the more research I did the better it got. I spoke to about 30 past and present franchisees. There was a universally positive response. I have an economics degree and an MBA and on my own I knew I would be literally years behind it if I got there at all. “We finalised the deal in December 2009, and had a skiing holiday booked for January and February so we didn’t start till March.” The growth has been better than planned: in five months Andrew had reached his 12 month goal. That was the trigger to get someone else in and there are now six people in the business. He is reaping the benefits of his business success with a lifestyle many would envy. “In the first year I thought I should only take off one week at a time, in the second year I decided I could take two weeks off in one go, now I’m in the third year and we had three and a half weeks off in April. We went climbing in Spain, skiing in France and saw family in Belgium.” A regular one page report from the admin director kept Andrew on top of the business while away, but he admits there were some days in Europe when he didn’t turn on a computer. Back home, a regular routine means time is scheduled for his young boys: breakfast six days a week and from 5.30 to 6.30 every night. “Coaching is brilliant fun, I absolutely love it,” says Andrew. “Firstly there’s innate satisfaction working with clients; as they get more free time they get more excited. Secondly, we work hard on what sort of a team we’re building. It’s really enjoyable coming to work.” And the business continues to grow with clients seeking change excited about investment in coaching, despite tough economic times, he says. “The territory is 64,500 businesses, small and large. A full time coach can coach 20 to 25 businesses. We’re hardly scratching the surface.” F
Coaching is brilliant fun, I absolutely love it
and enjoy every day
Franchise opportunities now available nationally. For more information on joining Hudsons Coffee, call Carly on 03 8631 7710 or visit hudsonscoffee.com.au/franchising
JUL/AUG 2012 FRANCHISING | 35
1 0 :
For Anna Calcagno a Gelatissimo franchise is a perfect match
COME TRUE W
hen Anna Calcagno first saw the Gelatissimo gelateria, she fell in love with its look and the beautiful gelato, and she knew it was her ideal franchise. Now Anna owns the Lygon Street outlet in Carlton, Melbourne and shares her story. 1. Why did you choose this franchise? I truly believed in the product. I knew the flavours were amazing and the beautiful presentation would make it easy to sell. Going down the franchise route was safer in our minds than starting something from scratch. After our initial enquiries we felt comfortable with Gelatissimo, because it offered the support we needed, not only at the
36| FRANCHISING JUL/AUG 2012
to carry us through the first few months of trading.
beginning but on an ongoing basis. When our location came up in a popular eating district known as little Italy in Melbourne, we didnâ€™t hesitate to grab it and went from there.
4. What training and support did you receive initially and ongoing? We had in-office training in Sydney and on-site training in the Coogee gelateria. Two head office staff came to Melbourne for our opening and the first five days. Support has always been excellent and continues to be so today.
2. What did you do before taking up a franchise? While our children were young I worked in my husbandâ€™s business in a part time administrative capacity. 3. How did you raise the finance? We had recently sold a half share in a business that had been extremely successful, so
we were sufficiently cashed up to have enough money to cover our start up costs, renovation expenses for our gelateria and working capital
5. What is a typical day for you as a franchisee? Because I manage my own store, I work in a full time
A KOALAKRANE FRANCHISE GIVES YOU: UÊ UÊ UÊ UÊ UÊ UÊ
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capacity, so my shop’s presentation, including the gelato display, is always of a high standard. The first thing I do each day is ensure that any surfaces not properly cleaned the night before are wiped down and sparkling. I then set up the till so there is enough change to get through the day. I check which flavours need to be made so all the trays are full and looking fabulous and make what is necessary, re-garnishing or fixing any flavours not being made but which are perhaps looking a bit shabby. There is always some paperwork, be it rosters, paying bills, banking etc, and this fills in the days. We defrost various freezers during the week, including both rotundas and the three upright freezers in which we store our back up stock.
6. What challenges have you faced? The biggest challenge is ensuring my staff maintains my very high standards. Because I know it’s impossible to be there constantly, I concentrate on training staff better on a one-on-one basis. 7. Has becoming a franchisee changed your life, if so how? I would say that becoming a franchisee has changed my life. It has given me a confidence I didn’t know I possessed. I realise how much I love people and dealing with them. I am really happy to go
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to work every day. It’s also been rewarding financially giving us extra ‘play’ money at a time in our lives where we can enjoy it. 8. What advice would you give to someone thinking of buying their first franchise? Do your research and speak to people involved in that particular franchise. Learn as much as possible about the product and if you truly believe in it and are confident other people can also love and want it, then go for it. Do your sums carefully so you don’t put yourself under too much pressure financially and ensure there is a strong team behind you, to guide you along the way. 9. What are your plans for the future? I love my job and the rewards are great, so for now things
It has given me a confidence I didn’t know I possessed. I realise how much I love people and dealing with them And, of course, we spend time with our customers, so their experience in our store is a great one.
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will remain as they are. I would hope that within the next few years my husband and I can think of semiretiring. We may opt to sell what we have and live off our earnings and hard work or have someone in place to manage our shop and just have a minimal involvement. 10. Would you do it again? Absolutely. I’m sorry I didn’t do it earlier in my life. Being involved in a franchise with a great team and a sense of family is wonderful. All my hard work is paying off. It’s been rewarding both financially and personally and I’m very proud of the person I’ve become building my business and making it a success. F www.franchise.net.au
JUL/AUG 2012 FRANCHISING | 39
9 : 4
There has been an influx of franchise systems entering the Mexican food scene over recent years, all claiming a unique point of difference and a commitment to fresh, made-to-order meals. Danielle Bowling reports
MEXICAN WAVE I
f you’re talking food trends, the rise of Mexican cuisine would have to be at the top of the list. Over the past few years, Mexican has gone from being a niche offering, found in the odd food court or occasionally as a stand-alone restaurant, to a surety in most suburbs. And many of the brands out there, responsible for the rapid rise of burritos, taco and quesadillas are franchised, with strong growth plans and a mission to re-educate the Australian palette, which often associates Mexican food with the cheesy, sour cream heavy, greasy dishes of yesteryear.
Victorian-brand La Solas, established in 2002, has three company-owned stores in Geelong, Torquay and the Surf Coast and is keen to sign up its first recruit after hitting somewhat of a growth speed-bump over the course of the GFC. 40 | FRANCHISING jul/AuG 2012
According to founder Michael Baker, one of the biggest hurdles to expansion, both of his own brand and the Mexican cuisine in general, has been the negative stereotype associated with the food. “The biggest road block we’ve faced in trying to get this model up and running is the education of the general populous. Unfortunately, Mexican food, during the 80s and 90s, really got a bad rap. It was overcheesed, over-sauced, over-priced, and people just felt unwell after eating it,” he says. Baker makes a point of explaining that La Solas doesn’t offer authentic Mexican food, but rather authentic Californian Mexican food. And while it sells classics like nachos, tacos, www.FRANCHISe.Net.Au
the Subway model. It’s all made in front of you and once people have had the experience of making the choice themselves about what goes into their food, then no one wants to go back to ‘oh, I’ll have the chicken burrito like the one in the picture on the wall’,” he says. Young believes Mad Mex, founded in December 2007, kicked off the Mexican wave in Australia,
year it’s been gaining a bit more popularity. And yes, I do believe that because we’ve been here doing this for the past five years that we are well positioned to be the leader in the next phase when it really takes off and goes everywhere. “We make a super authentic product, something they’ve never tasted and the reason is that we bring tonnes of products over
This is the Subway model. It’s all made in front of you and once people have had the experience of making the choice themselves about what goes into their food, then no one wants to go back La Solas offers authentic California-style Mexican
enchiladas and quesadillas, this style is all about the burrito, made fresh to order. “The thing that separates us from them is that, firstly, I’m from California and secondly, I’ve lived and eaten this kind of food for most of my life and I know what is and isn’t authentic California-style Mexican food. “We’re a fresh mex establishment, which in my book means that you make everything on-site yourself. We offer freshly produced food. We make all the salsas and guacamole and enchilada sauce, everything. The only thing we don’t make is the sour cream because we don’t have the cows.” Mad Mex, which had 15 stores at the end of the last calendar year, and plans to have a total of 33 by the end of 2013, was also founded by a Californian, Clovis Young, who says the strength of his brand lies in its Subway-like model, where fresh ingredients are on display and put together in front of the consumer when and how they like it. “What we do, I think, is the best quality, but that’s not the point. The point is that this is
and says that while competition is a good thing, he doesn’t believe there’s enough room in the market for each franchise to take full potential of Mexican food’s popularity. “I don’t think there’s enough room for five chains to have 100 stores. I think there’s enough room for two chains to have 100 stores,” he says. “It [Mexican food] does seem like it’s exploding now, but each
from Mexico. We also have an environment that’s fun and cheerful, so it’s not formal. It’s fantastic quality. It’s very quick – from the time when you order to the time that you’re eating it’s two minutes or less, and it’s very healthy so you can go there three or four times a week. Plus it’s cheaper than cooking. So it’s convenient, it’s fast, it’s healthy and it tastes great. All those four things, that Fast, fresh and fun food at Mad Mex
jul/AuG 2012 FRANCHISING | 41
wants to grow through multiunit franchising, and the brand, which is expected to have 35 to 40 stores across the country by the end of the year, wants the majority of its franchisees to have between three and five Mad Mex isn’t the only brand stores each. leveraging off the Subway Stuart Cook, Zambrero CEO business model. Zambrero, says, “[It’s based on] wisdom founded in 2005 by Sam Prince, gained from some of the big a medical student at the time, players like McDonald’s and has also taken a page out of the Subway. The reason is that popular sandwich franchise’s Nachos from it reduces risk. If something book. Like Subway, Zambrero The Burrito Bar happens to one of their stores it reduces the trading liability of the entire group. It allows greater economies of scale so they can employ the right people and more or less become a business within our business. So as soon as people are starting to go through the [franchising] process, we’re getting them excited about their second and third store, not A U T O N A T M0 5 0 3 4 . p d f P a g e 1 4 / 0just 6 /their 1 2 fi, rst.”8 : 4 4 A M Cook says each Mexican bundle of value propositions, didn’t exist when we came here.”
You’re not coming there to drink, you’re coming there to eat and why not have a beer or a margarita with it? franchise in the market today offers something different, and Zambrero plans to grow by capitalising on its own unique offering. “Some of our competitors push the tacky Mexican or the authentic, but we’re not claiming to be either of the above. We’re a Mexican fusion of flavours, so we used to be called Zambrero Fresh Mex Grill but we’ve switched to just Zambrero. So we use the essence of Mexican food and some of the spices but we push
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