STEP INTO THE $6.6 BILLION
TO LEASE OR
FITNESS BOOM
NOT TO LEASE
Franchising www.franchise.net.au
Your essential
Jan/Feb 2014 VOL.27/No.1
guide to buying a franchise
Spot the
LONG TERM TREND
REPORT:
Weighing up the
The Aussie taste for chocolate
frozen yoghurt craze A PASSION FOR THE
AUS $6.95 NZ $7.95
25 YEAR
QUEST
Where next for the brand?
PLUS: BEDSHED, DOMINOS, THE CHEESECAKE SHOP, STEPZ
Enjoy the best of
both worlds
A PACK & SEND franchisee earns income operating a Retail Service Centre at business trading hours, providing freight and packaging services to businesses and consumers Plus earns income from online freight solutions 24 hours a day, 7 days a week. It’s a business system that provides you with the best of both worlds – giving you access to sophisticated systems and technology to exploit the high market growth in the movement of packed and unpacked goods as a result of growing trade via the internet. There is no other franchise system like it in the world and best of all, PACK & SEND Franchisees receive assistance and support along the way.
For more information, please call Kate Bird on 0423 052 456
High growth market, with No Limits to sales growth Innovative, progressive company, established 20 years Award winning business systems and support Retail Service Centre at business trading hours – plus earn online income 24 hours, 7 days a week Low investment entry price
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Contents JAN/FEB 2014 | YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE 50
Success in sport and fitness Which gym business suits you?
62
In the fast lane Training for a pool business
68
42
Issues 74
Inspire
80
Cover story
16
86
Threading a successful business From cake decorator to franchisee Karen Bawden’s journey
22
90 Editorial
6
News
28 30
114 People
36
119 Checklist 120 A-Z listings 130 Advertisers index
A quick snapshot before you buy
How to...
Two gyms and counting
90
Documenting the drive-thru The franchisee perfecting pizza The ups and downs of opening a franchise Bedshed franchisee diary
Opportunities 42
Eight things you need to know
Five franchises share their concepts for success
A former delivery driver’s tale
116 Viewpoint 118 Glossary
88
Weighing up the frozen yoghurt craze
The new coffee and cafe market
34
Someone show me the way out? Why every business owner needs an exit strategy
Stepz franchisees ready to grow
109 Legal 112 Sketch
86
Beauty chain’s newest recruit
18
Why your business plan is your bible Your new franchise will be dependent on a good business plan
25 years of Quest
5
Picking a winner concept Novelty or longterm trend?
8
REGULARS
Taste for chocolate Check out the latest survey on the specialty market
Ripe for the picking Fast food is more than burgers and chips WWW.FRANCHISE.NET.AU
Stay on top of your business Learning good management habits makes sense
94
Mirror, mirror on the wall Negotiationg the best deal with your franchisor
99
Purchasing an existing franchise? Five factors to consider
100 Asset protection: ignore at your peril Don’t invest without protecting your assets
104 Don’t fail before you start! The role of working capital in a franchisee business JAN/FEB 2014 FRANCHISING | 3
OVER 500 FRANCHISE CONVENIENCE STORES AND GROWING! You may not be aware that Caltex Australia operates one of the largest convenience retail networks across the country, with both company and franchised stores operating predominantly under the ‘Caltex Star Mart’ brand. Caltex is a well-recognised and reputable brand with outstanding systems and tools to enable operational success. New franchisees entering the business will be provided structured training and support on all key operational elements to set them up for success in their venture. The franchise community is strong and supportive with organised franchise councils and regular communication meetings, to ensure franchisees contribute to the brand success. Caltex has also held international conferences every 2 years with significant franchisee attendance, in locations such as China, Mauritius, Vegas and the most recent event was held in Dubai. This conference rewards high performers and is a highly anticipated event on any franchisees calendar. To find out more about our Franchise Opportunities, visit www.caltex.com.au and click on ‘Franchising at Caltex’.
Welcome
Franchising Publisher Raffael Fernandes P: 02 8484 0754 raffael.fernandes@cirrusmedia.com.au Editor Sarah Stowe P: 02 8484 0900 sarah.stowe@cirrusmedia.com.au Journalist Brea Carter P: 02 8484 0661 brea.carter@cirrusmedia.com.au
Will 2014 be your year?
Graphic Designer Rizwan Nawaz P: 02 8484 0622 rizwan.nawaz@cirrusmedia.com.au
I
National Sales and Marketing Manager David Strong P: 02 8484 0905 david.strong@cirrusmedia.com.au Account Manager Ben Smith P: 02 8484 0740 ben.smith@cirrusmedia.com.au Account Manager Mitchell Greenway P: 02 8484 0696 mitchell.greenway@cirrusmedia.com.au Client Success Manager My Do P: 02 8484 0927 my.do@cirrusmedia.com.au Production Co-ordinator Jackie McCarthy P: 02 8484 0945 jackie.mccarthy@cirrusmedia.com.au For subscription enquiries call customer service: 1300 360 126 ISSN: 1321-408X
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SARAH STOWE Editor
t’s here. The new calendar year has crept up on some of us, and we’re all wondering what the future will hold. Perhaps this will be the year that you step out into business ownership? Maybe the next 12 months will hold unexpected opportunities for business development and one franchise unit will become two? If signing up to a franchise agreement was top of the list of your New Year’s resolutions, this is a great place to start. There’s an imperative for every new franchisee to be knowledgeable about the franchise relationship, to be as educated as possible about the challenges, commitments and demands a franchise entails. For starters we’ve provided a quick snapshot highlighting a few of the points to consider about franchising. Picking a franchise brand that has the potential for longevity is important for anyone wanting to do more than buy a business for three or five years, and in this issue Domini Stuart looks at trendspotting and the red flags that will highlight a short-term novelty. There are three essentials any franchisee needs when starting in business: working capital, a business plan, and an idea of how to exit the business. In this edition of Franchising magazine we consider all these elements, as well as the pertinent issues of
Picking a franchise brand that has the potential for longevity is important staying on top in business and asset protection. Opportunities abound in the franchising sector, as we show in this issue, from fast food to the poolcare business and the booming $6.6 billion fitness and sports arena. Food and beverage trends that have taken off recently are the frozen yoghurt craze and the diversification into drive-thru models among coffee and cafe brands. It’s worth checking out The Profiler, a free supplement with this edition of Franchising magazine: this showcase publication is an ideal way to delve deeper into franchised concepts across a wide spectrum of sectors.
Printed by: Bluestar Print 83 Derby Street, Silverwater NSW 2128 P: 02 9748 3411 All Franchising material is copyright. Reproduction in whole or in part is not allowed without written permission from the Editor. © 2014. Opinions expressed in Franchising are not necessarily those of Franchising or Cirrus Media.
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JAN/FEB 2014 FRANCHISING | 5
News ONLINE NEWS | WWW.FRANCHISE.NET.AU
Franchisee Jack Cowin sells KFC stores
A
AD_ F RVI PJ AN_ 1 3 . p d f
ustralia’s most well-known The managing director of Collins franchisee, Jack Cowin, is sell- Foods, Kevin Perkins, told Franchising ing his KFC stores to Collins magazine the company will invest in Foods for $55.6 million. upgrading existing restaurants and The sale of Competitive Foods’ KFC expanding the network. outlets has been the subject of specula“The State can take another 25 to 30 tion, with Cowin in a long-running stores, we aim to open eight within two dispute with franchisor Yum!. years. We will probably spend $25 million A spokesperson from Yum! said, on upgrades over four years and $8 “Yum! hopes that the finalisation will end million to $10 million on new stores.” the long-running dispute.” The company strategy is to open four to The transition of the business will take five outlets a year, as it does in Queensland. place at the end of January. “We like the business and we think Collins Foods’ purchase of the 40 wer’e good at it. We can add some synerWestern Australian stores and four in the gies to it,” said Perkins. Northern Territory gives the Queensland “It’s a good market, there are a lot of based business the majority of KFC opportunities in good stores, because of the Pa ge 1 1 0 / 1 2 / 1 2 , 6 : 1 3 PM outlets in Western Australia. disputes they haven’t invested in them.”
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Love your work
V8130
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News WWW.FRANCHISE.NET.AU | ONLINE NEWS
Eagle Boys’ roll out rebrand
A
brand new look has been released for the 26 yearold food business Eagle Boys Pizza. In fact it’s more than one new look: the multimillion dollar investment in the mainly regional and rural network sees franchisees taking ownership of their store design in a move that rejects the identikit approach. The Australian network’s brand refresh includes a new logo symbolising the brand’s core values of delivering exceptional customer service and great quality food as part of the local community, as well as revitalised stores with uniforms and pizza boxes to match, a new menu, website and community assistance program, the Eagle Boys Happiness Fund. Spearheading the Eagle Boys Pizza brand refresh is CEO Bruce Scott, who believes the brand is primed for the future. He told Franchising magazine “It’s something we thought long and hard about. How the menu would look, what
The franchisee owned and operated Snap Hub in Queensland is closing. The centre provides print services for the 22 Snap outlets in the region. The Australian arm of UK-based Japanese restaurant and noodle bar chain, Wagamama has gone into voluntary administration at the helm of its Australian franchisee, Edible Concepts Holdings.
customers feel about the brand and how they would appreciate it. “The investment is quite considerable. We’ve put about $8 to $10 million into the refresh. We don’t want to stop the continual improvement, innovation is an important part of our development.” The Eagle Boys rebrand is being rolled out in stages beginning with far north Queensland, a decision based on the company’s history.
The Athlete’s Foot acquires new brands
T
he parent company of franchise retailer The Athlete’s Foot added niche sports footwear label Saucony to its portfolio in December and has also acquired Podium Sports, a nine-store chain selling athletic footwear and apparel clearance stores in outlets malls and DFOs RCG Corporation has secured a five year exclusive distribution agreement for the Saucony brand in Australia and New Zealand. The shoe line is already sold through The Athlete’s Foot outlets. Hilton Brett, RCG CEO, said “Saucony is a highly credible, award winning, international athletic brand with huge
IN BRIEF
growth potential. Its profile, both in terms of market position and growth opportunity, is a perfect fit for RCG. “Together with the recently announced Sperry Top-Sider licence, the acquisition of Saucony will fuel additional growth in RCG and move us closer to our goal of becoming the lead player in premium branded footwear in Australia,” Brett said. Franchisees are expected to be able to match the level of growth with the Saucony brand that was achieved with the Merrell label. The addition of Podium Sports to the group will help protect the business, said Brett. WWW.FRANCHISE.NET.AU
Italian restaurant franchise La Porchetta has introduced a new restaurant design for the chain and it’s been unveiled at the relocated Melton restaurant. The future of travel agencies in the Jetset Travelworld Group will look a little different with the launch of the helloworld concept store. Family business Beaumont Tiles is targeting Sydney as the next area for expansion as part of its national growth strategy. Online fruit and vegetable delivery franchise Aussie Farmers Direct has teamed up with The General Store, a new online retailer that delivers household essentials to people’s doors. Pacific Retail’s Wasabi Warrior brand will be expanding internationally this year with an outlet opening in Dubai. Accor Hotels took home a total of eight tourism awards across two separate awards evenings. Cafe2U plans to open 15 new franchises in New Zealand over the next 12 months
JAN/FEB 2014 FRANCHISING | 7
Inspire | Cover story
THE
QUEST CONTINUES
Where has all the time gone? That’s the question Quest founder and chairman Paul Constantinou asks himself when he looks back at the 25 years of business. “
T
he most important thing that I’ve enjoyed the most has been working with the franchisees and working with people who want to aspire to business ownership and they couldn’t get it through, they couldn’t get the finance, they didn’t have the skill set. Working with those people who had a passion to become owners of businesses, and to watch the young people come through and to look back at some of our franchisees, now, to say well done guys, that makes you feel you’ve achieved something.” »
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Inspire | Cover story
Paul Constantinou – chairman of Quest Serviced Apartments Image: Jesse Marlow 10| FRANCHISING JAN/FEB 2014
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The Quest brand has been built on a simple model: catering to the needs of the business traveller. The demands of an extended business stay translate to efficiencies for the guest, he says. What’s important is how they pay their bill, and how internet access is provided. “Good fast broadband provides enormous efficiency for a guest,” says Constantinou. “Younger travellers carry their news and videos and music on their own devices and want to know how to put their content on our TV. We need to be facilitating this. “We’ve put the customer in control – they can eat out, eat in, cook for themselves. If they are a nondiscretionary traveler they just want to get the job done and get home.” It’s important to understand what accommodation demands will be in five to 10 years, and where customers will be moving for business in 10 to 15 years. It takes up to five years for a new property to be built and opened for business. “We go to the top 500 corporations and try and build relationships where they are developing and growing,” he says. “We follow government infrastructure spend,” explains Constantinou. Population growth and business are good indices for accommodation, he says. A steady growth of regional and suburban demand is good news for the accommodation sector, and supply now needs to catch up, says Constantinou. There are 150 properties across Australia, New Zealand and Fiji, and further international expansion is guaranteed. “It has to happen now. Quest is a transportable brand, we learned a lot from when we went to New Zealand as to how to do business and it took us a while to get it right, dealing with different cultures. But we will definitely expand overseas. “The how is that the new people on board have that hunger, that desire. Expanding overseas is a different level of work, a different level of skill set because you’re going into communities that may never have heard of you, and you’re building different relationships to capital partners and investment. “Customers may know you because they have travelled globally and we deal with global brands. But at the end of the day it’s getting the business up, and that’s when you’re dealing with local communities so how do we invest in the local community to get them to understand what Quest is and how Quest can be part of their community?” New community development has been managed on a micro scale as Quest has expanded into regional areas. It isn’t as easy as just stepping into the local community and assuming the business will be accepted; at the heart of the network growth is building relationships, says Constantinou. “It’s like building any relationship, I can take you out to lunch but that doesn’t mean we have a »
Inspire | Cover story
relationship. The community has to accept you but once it does, the community becomes part of you.” Constantinou says adoption by the community has occurred in New Zealand with customers who now see the Quest brand as their own. And he predicts that will be the pattern with other international markets.
FRANCHISEE EXPERIENCE It’s certainly been the experience of our cover franchisees Lee and Sheree Bennett. Lee says “It’s such a strong brand, whenever you go into the market and talk about it people know about it and the strength is we feel part of a really strong group. It’s not a hard Quest Docklands sell, people know it and respect it.” Image: Deb McFadzean- Marvelle Photography Sheree took a role as a receptionist at Quest, which LEE BENNETT at the time was relatively new in New South Wales. Quest franchisee So what does Quest do right? “Paul identified we were interested in the group and “The system is simple and it works. You don’t have to they guided us to becoming franchisees,” she says. be a rocket scientist to operate one of these franThe power of the brand has been a boon to the chises. You just have to be keen, loyal and passionate couple, who moved from their Maitland property to about what you’re about to do. The franchisor helps take on a new venue in Dubbo. Community involveyou get this passion across.” ment is key, says Lee. “It comes back to that brand. Former chef Mark O’Shea worked for Quest for Quest is investing in those areas, they can see they’re two years as a property manager. Just three months in in for the longhaul, it’s good for the community.” and he was committed to joining the franchisee ranks. Michael Hibberd is the longest serving franchisee Quest was supportive and helped work out a silent in the network with 17 years clocked up at Quest. SHEREE partner in a joint venture, for two years, and then “I was approached by Paul to have a look at a Quest BENNETT franchise; it was in its infancy, the system was still in O’Shea and his wife bought out the silent partner. Quest franchisee After four years they opened a Greenfield site. “This its infancy. It just felt right, this system, how it was is a real opportunity, you can build from scratch and being put together really suited me and my personality and how I wanted to go about doing business in build real wealth in the business,” says O’Shea. the future. MAKING MONEY “Paul was very people based, he came across as The total investment for a franchisee is at least very approachable, he was someone I could really a Quest franchisee will F R 0 9 1 3 _ 0 0 0relate _ M OtoNand- that’s 1 the 2 0sort 1 3of- franchise 0 8 - 1 6system T 1 0 I: 4 4 : 2$750,000 6 + 1 0and : 0typically 0 achieve an operating profit margin of between » wanted to get into.”
Connecting People, Creating Careers
FRANCHISORS Are you looking for top talent for your management team? Please connect with Steve Bianchini at Mondo Direct – The Number 1 Specialists in Franchise Executive Search and Recruitment Tel: 0403 840 996 | Email: steve@mondodirect.com.au 12| FRANCHISING JAN/FEB 2014
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Seeking New rs rtners Fra ranchise Part
Pizza Hut is the world’s largest pizza restaurant company with more than 12,000 restaurants in over 90 countries. A subsidiary of global QSR giant Yum! Restaurants International, Pizza Hut boasts a strong history in Australia since opening its first Australian store in 1970. As a franchisee, Pizza Hut offers you the advantages of investment in a proven brand; flexible hours for individuals and families; and fun, exciting revenue potential within a great system.
To find out more please visit
Pizza Hut has exciting new store opportunities available throughout: • Melbourne & Regional Victoria • Perth & Western Australia • Regional New South Wales • South East & Regional Queensland We are looking for owner operators who have a hands on approach and a head for business. Sites have been selected, you just need to start training. Minimum equity required is $100,000.
www.pizzahut.com.au/franchise
Inspire | Cover story
A Quest studio apartment
ZED SANJANA CEO of Quest Serviced Apartments
12.5 percent and 20 percent of turnover. About 40 percent of franchisees come from within the corporate group and the franchise businesses, a figure that Constantinou believes reflects well on the business model. “To have home grown franchisees who have belief in the brand as employees, to then have that extra belief to take ownership of a business, well that’s a great achievement as well.” And the success of the brand can be summed up simply: discipline. The processes of the business model are a major attraction of the franchise model , he says. “There are very few that aspire to be entrepreneurs and take 100 percent risk themselves, they prefer to follow proven businesses that have a very streamlined process that works.” The ultimate reason for franchisees to be in the business, he says is to grow wealth. “In a brand that they are comfortable with and with brand values are aligned with theirs.” Owning a business is ultimately about the passion you have for your business he says and that will take franchisees through hard times. “I think we have some franchisees who probably get caught up with the bottom line, with profitablity,” says Constantinou. “You can’t be in a franchise business for the rest of your life. Exit on the high, build your business, extract its value, make some good profits. Sometimes people hang around a bit too long in business and that’s when they see their equity start to dwindle,” he suggests.
do something better than I did last year.” However in mid 2013 Constantinou stepped back from his role and took on the position of executive chairman. Zed Sanjana, former general manager, has taken on the reins of chief executive. At the time Constantinou said “This appointment will enable me to focus on the strategic direction and growth of the Quest franchise network, whilst Zed and his team oversee the day-to-day operational aspects of the business.” But he admits in reality it has been hard to relinquish control. “It has affected me, because when you’ve been in business so long, a business you started yourself, it’s hard to let go. “It’s getting easier, the fi rst year was hard. But we all have to realise there is a certain point of time when succession planning becomes really important, and important for the brand and the people that the brand service. “I realised I need to bring in that extra level of people to provide the disciplines and understand the market and what it’s going to be in the future. That’s probably been the biggest driver for me, bringing on the new set of business people as employees to the business so they can take the brand from this 25 years to its next level. “Sometimes when you sell a business you walk away; when you are still involved it’s good to sit back and let others lift themselves up within the brand. Zed Sanjana will now be recognised for his role in the brand,” he says. The benefit is that the business is not personality driven. “It doesn’t rely on one person. The brand after 25 years is itself. We are now servicing the brand. And when we look at the growth of the group, it’s where the brand is going, where Quest has to go. “The people involved, all the stakeholders, are now saying what’s next for the brand.” F
THE NEW GUARD Also celebrating 40 years in the hospitality sector overall, Constantinou admits he was ambitious for the Quest brand from the beginning. “I never had a vision of how big the business would be but I knew I wanted it be a large group. Where we are today is probably from my passion to 14| FRANCHISING JAN/FEB 2014
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Check out this video to hear Paul Constantinou reflect on his 25 years: SCAN the QR Code or visit http://bit.ly/1e6BLtN to watch
• • • • • •
franchise@palmoasisventures.com www.baskinrobbins.com.au
Inspire | Franchisee
THREADING A SUCCESSFUL
BUSINESS
Parminder Bharma is alternative hair removal franchise Get Threaded’s newest recruit.
S
he opened a brow and beauty bar at Sydney’s Westpoint Blacktown last November, and couldn’t be happier. While Parminder may have only been with Get Threaded a short time, she plans to grow with the brand and eventually open additional salons. Parminder documents her journey from beauty therapist to potential franchisee, right through to franchise owner.
I met Get Threaded’s master franchisee... and was inspired
CHOOSING THE RIGHT BRAND Meeting Eva was the deciding factor for me. Hearing her speak so passionately about the brand assured me I was the right fit for Get Threaded – and vice versa. I also have eight years threading experience under my belt, earned in my home country of India, and a diploma in aromatherapy and hairdressing.
CHALLENGES + FRANCHISOR SUPPORT
THE EARLY DAYS Before becoming a Get Threaded franchisee I was working as an eyebrow technician and facial expert at another beauty salon. I’d always dreamed about having my own business but was concerned about branching out alone. I met Get Threaded’s master franchisee, Eva Kayrouz, earlier this year and was inspired by her success. Eva explained that the support and guidance 16| FRANCHISING JAN/FEB 2014
offered by the franchisor, Liz See, was second to none and it confirmed that franchising was the right option for me.
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The whole franchise system is new to me so each step is a challenge. Liz and Eva have been there every step of the way to guide me, and will continue to as the business develops. I am so lucky to be a part of Get Threaded, where the franchise support team ensures everything runs smoothly. Eva’s ongoing support has given me added confidence in handling all sorts of situations and my team and I have been given comprehensive training surrounding Get Threaded’s unique approach. F
Now franchising North-West Sydney, ACT and Port Hedland Existing restaurant available with potential for new store opportunities. We are looking for: • Owner-operators • Previous business ownership experience • Self-motivated individuals • Minimum $1 million equity For more information go to KFC.com.au and register your interest via ‘franchise opportunities’. KFC4746
Inspire | Franchisee
FROM CAKE DECORATOR TO
FRANCHISEE
Karen Bawden has enjoyed a 15-year long journey with The Cheesecake Shop
Karen Bawden with her 2013 Franchisee of the Year award. Images: Karen Watson 18| FRANCHISING JAN/FEB 2014
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Franchisee | Inspire
I
nitially employed as a cake decorator, Karen later moved up the ranks to become a store manager and purchased her own franchise in 2007. During her time as a Cheesecake Shop employee, Karen, who was named the brand’s Franchisee of the Year in 2013, developed a fondness for many aspects of the business. “I saw how effective the branding for The Cheesecake Shop was, and I loved the product and the fact that it is baked on premises, which is a real point of difference to other systems I have seen,” she says. “I’ve worked in the food industry for a long time and this is the first time I’ve had people come in and sing the jingle to me.” While Karen and her husband jointly own the business, she devotes the majority of her time to the store. “He only helps out in a handy man sort of role when needed. It’s really my baby and I enjoy all aspects of the business.”
QUALITY STAFF Staff turnover is often high in the food and hospitality industries, however Karen says her employees are incredibly loyal and have stuck by her over the years. “They are all awesome and do a fantastic job. After working in a few food retail areas I noticed one of the main issues you face day-to-day is staff turnover, particularly in front of house.
“I’m lucky to have a crew that treat the store like their own!”
THE DAY-TO-DAY Karen’s average day is spent in the store, both serving customers and assisting in the kitchen, and she dedicates a portion of her time to paperwork. “I spend a few hours a day on paperwork, which is necessary but I prefer to be hands on in store. I float between the shop front, cook and decorator,” she says. “The hard work can eat you alive if you’re not careful, but I am now enjoying a slightly more relaxed role where I can just float around the daily roles. I still do all my own paperwork as I feel I need to in order to keep the business on track.”
HEAD OFFICE SUPPORT Karen notes The Cheesecake Shop’s Queensland based field team is particularly helpful in providing franchisees with the relevant advice and support they require to run their stores. “[They] work with us to help better our business… through store visits, Q&A’s and our quarterly Brisbane based meetings. “Our marketing and IT departments work wonderfully with us to help provide us with those areas of expertise we need to keep the business moving forward,” she adds. »
Our marketing and IT departments work... to provide us with those areas of expertise we need to keep the business moving forward
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JAN/FEB 2014 FRANCHISING | 19
Inspire | Franchisee
Korie Leitch by fundraising for cancer awareness, which raises our profile especially when we can sponsor the cause with some of our own yummy products.” The store supports local sporting teams and school events, and Karen has a refrigerated van which is emblazoned with The Cheesecake Shop logo. Not only is it used for deliveries, the van can be loaned to schools and other organisations. “We do a fair amount of advertising in our community and online - we even have our own Facebook page,” she adds. Karen’s Willows store in Queensland.
THE FUTURE
Karen is of the belief that slow and steady wins the race when it comes to expansion, and she has considLOCAL AREA MARKETING ered the prospect of additional sites. Karen has established mutually beneficial relation“Ideally I’d like the business to continue to steadships with a number of local organisations to raise ily grow, [and] perhaps down the track become a awareness of her business in the community. multi store owner,” she says. “I am a Delta Therapy Dog volunteer - we try to All in all, the franchising model has enabled her help raise awareness of the Delta Society and in turn to enjoy the best of both worlds. they raise awareness of my store and our sponsor“[It] has given me a platform on which to have my ship of them,” she says. own F R0 9 1 3 _ 0 8 5 _ RED 1 2 0 1 3 - 0 8 - 1 3 T 1 0 : 2 7 : 0 7 +business, 1 0 : 0 0without the inherent risk associated “We also work closely with a Hope ambassador with a new start up business,” Karen explains. F
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Inspire | Franchise story
WEIGHING UP THE
FROZEN
YOGHURT
CRAZE
22| FRANCHISING JAN/FEB 2014
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Frozen yoghurt franchises are on the rise as the tasty treat gains popularity across the nation.
Franchise story | Inspire
G
lobal business or Australian owned? Self-serve or staff assisted? Products that contain fresh yoghurt or dairy free options? There are countless frozen yoghurt franchises out there, and no two are the same. Five key players – Moochi, Yo-Get-It, Menchie’s, Crave Australia and Mix & Go FroYo explain what it is that sets their concept apart from the rest.
MOOCHI Vision/philosophy According to general manager Euna Kim, Moochi’s founder David Bae developed the brand after he realised there was a gap in the market for healthy dessert options. “Moochi was established with the vision to provide customers with a guilt-free treat that can be consumed all year round. The brand is about providing more than just another dessert alternative but giving customers a fun and engaging experience,” she explains. Bae invested much time and thought into the Moochi logo, and its colour represents his goals for the brand. “Magenta pink aligned with David’s vision that Moochi as a brand could stand out and become a trendsetter in the Australian frozen yoghurt market,” says Kim. Product Kim explains Moochi’s product offering is markedly different from those of its competitors, and she stresses it is genuinely healthy. “People seem to think that all frozen yoghurt products are homogenous but our product has a distinct creamer and tangier profile, simply because we add fresh milk and real yoghurt to our product. “There seems to be a perception that frozen yoghurt is like a soft serve or just another dessert but we didn’t want to compromise the nutritional benefits of eating real yoghurt,” she explains. Future Kim says Moochi is looking to open another 20 stores by the end of 2014, and the team is working on a number of other projects. “We are continuously working to reduce the calorie and sugar levels while maintaining the same rich and creamy flavour. “We are also looking into commercially viable ways to provide catering without compromising the quality of the end product and we would like to convert to environmentally friendly packaging.” » WWW.FRANCHISE.NET.AU
JAN/FEB 2014 FRANCHISING | 23
Inspire | Franchise story
A Yo-Get-It store Image: Andrew Hardy
YO-GET-IT Vision/philosophy Yo-Get-It was developed in 2009 after founder Scott Bradley saw a “massive hole” in the healthy dessert market. “We wanted to start a trend and be the first to bring self-serve frozen yoghurt to Australia,” he explains. Product Bradley says he loves when people ask him what makes Yo-Get-It’s product offering different from its many competitors. “As it stands now we are the only frozen yoghurt business (that we are aware of) making our yoghurt from scratch from our own recipe from our own factory. “This gives us huge control of the product, ensuring it is made from the best natural low-fat Greek yoghurt and Australian skim milk and free from artificial flavourings or colourings,” he explains. “Most importantly this means that the franchisees can purchase the yoghurt at a much cheaper rate, and in turn pass those savings on to the customers.” He adds Yo-Get-It offers smoothies that are made using the same frozen yoghurt, which customers love. The future Yo-Get-It recently opened its eighth store in South Australia, and there are plans to open 100 stores over the next three years. Healthier offerings are also on the brand’s radar. “Our next big thing is to bring out 100 percent sugar free yoghurt, dairy free yoghurt and a high protein yoghurt for all the gym junkies,” he says.
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MENCHIE’S Vision/philosophy Menchie’s aims to deliver an exceptional customer experience by providing great customer service and a superior product, and its mission statement ‘we make you smile,’ is put into motion quite literally at its stores. “From day one we designed our stores to be unique, warm, and the friendliest places on earth,” says CEO Amit Kleinberger. “The Menchie’s experience is different from other frozen yoghurt chains as we focus on the why before we focus on the what. We create a positive environment that stems from placing community before commerce. We are in business for smiles,” he explains. Product Kleinberger explains the brand’s frozen yoghurt recipe, which is made using milk from cows in California, also sets it apart. “[They] are not injected with any artificial growth hormones such as rBST. All of our frozen yoghurt is certified by the National Yoghurt Association and has received the Live and Active Culture seal, indicating it is real yogurt.” Future There are big plans for the brand, too. Kleinberger says there are currently 250 new stores under development. “We have more than 350 locations open in the US, Canada, Japan, Australia, Puerto Rico, Israel, Jordan, South Africa, and Guam [and] we’re planning to »
Frozen yoghurt from Menchie’s
We have more than 350 locations open
Energy Passion Innovation
Digital Domination
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open stores in China, France, India, Trinidad & Tobago, the United Arab Emirates, Mexico, China, Costa Rica, Kuwait, Qatar, Pakistan, New Zealand, and Saudi Arabia, among others.”
CRAVE AUSTRALIA Vision/philosophy Aleksandar Svetski brought US frozen yoghurt chain Crave to Australia after he stumbled across the brand in San Francisco. He says Crave operates in line with two key philosophies: 1. Brand i. Fun (atmosphere) ii. Quality (product) iii. Class & Style (environment/setting) iv. Choice (self service) 2. Internal/franchisees i. Drive ii. Hunger iii. Passion iv. Service “This means that we provide everything the customer wants in an atmosphere they will enjoy, in a modality where they get to choose and in an environment they can hang out in,” says Svetski. While Crave is an American brand, he stresses Crave Australia has been developed specifically for the local market. Product “We make it [the product] fresh onsite from properly dehydrated Italian yoghurt – not old, frozen liquid delivered from the US that’s been sitting in plastic bottle for months on end,” says Svetski. He adds Crave products are health conscious and cater to customers with special dietary requirements. “We have a naturally sweetened (with Stevia) sugar free range, a lactose free range and to top it all off, our product is certified both Halal and Kosher.”
Future Crave opened its first store in August, and has aggressive expansion plans. “We wanted a different direction and the response has been phenomenal with another 12 stores opening between August and November 2013 – I think that’s a record growth curve,” Svetski says.
MIX & GO FROYO Vision/philosophy Mix & Go FroYo was founded in 2011 under what managing director Matt Day describes as an easy business model. “Now [we have] an easy franchise model which we can share with franchisees and also share our brand across Australia,” he says. The brand is Australian owned, and as such strives to meet the needs of the local rather than US market. “We have low setup costs and have developed a franchise model which is very simple and easy to manage. We allow input from franchisees which allows them flexibility in their stores,” Day adds. The brand aims to offer customers a combination of excellent customer service and quality product, and its team work with franchisees to educate them about the Mis & Go FroYo philosophy. Product Day prides himself on developing an Australian owned brand which delivers products that are made using local ingredients. “We are committed to providing the best products made fresh using premium Australian ingredients and the safest, most efficient equipment sourced from around the globe.” Future “We are looking for the best franchisees to help expand our brand across Australia and New Zealand,” Day says. Brand relevance remains a key focus for Day and his team. “We are always adapting our brand to suit the Australian market, keeping up with the latest internet trends and social media to maintain a marketing edge over our competitors,” he adds. F
Image: Crave
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Image: Mix & Go FroYo
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Simon Draper, franchise owner in Geelong, says, “I was looking for a business that satisfied my interest in real estate and enabled me to work locally. The fact that the Top Snap business model is primarily B2B and in my opinion almost ‘recession-proof’ made the opportunity even more attractive. Whilst having my own company, I do feel a great deal of support from the Sydney office and indeed other franchise owners. Being part of a team allows me to focus on growing my business and learning from those who have experienced the same process in the past. Whilst new to the industry, I do feel that I have an advantage over much of my competition with the diverse product range Top Snap can offer its customers.”
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2
AND
GYMS COUNTING Stepz franchisees Nariman and Homeira Karimi are on the lookout for their third gym and have plans to open several more.
B
efore they invested in a Stepz Fitness franchise, Nariman and Homeira Karimi’s day to day could not be more different. Nariman worked the boardrooms of countless corporate companies; meanwhile his wife Homeira was a creative. “I held roles as a chief information officer at a number of multinational corporations in Australia, South East Asia, South Africa and a number of other countries for 30 years,” says Nariman. “Immediately before this franchise, I was an independent consultant and my wife was a painter/artist and ran our home office.”
LOCAL BRAND, SIMPLE CONCEPT The pair chose Stepz Fitness because the rapidly emerging health and wellness services market interested them. “We preferred the services rather than products
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market as it involved less logistical and stock management complications. “The franchise concept offered simplicity. The critical components - modes of operations and suppliers - were already identified and proven,” Nariman says. They saw Stepz Fitness as a suitable investment option for three key reasons: • Low establishment costs • Partnership • Being local The fact that Stepz is a local brand was particularly appealing, says Nariman. “It meant that we got to know the master franchisors personally and found that we got on. “Being local also meant that the concept was always appropriate to the markets that they operate in, and in fact, could be adapted.”
A CLOSE WORKING RELATIONSHIP Dealing with the franchisors directly has made Nariman and Homeira’s experience with the brand more personal, where they don’t feel as though they are simply another number. “The ideas and objectives behind the operations were transparent and open to review, and we built a great deal of trust and mutual respect.” He says Stepz Fitness genuinely cares about its franchisees, whether that be via the provision of extensive support or making every effort to keep costs down. “We found that they are committed to the longterm success of the business and very sympathetic to keeping the start-up and fit-out costs low,” he says. F“They R 0 1proved 1 4 _ that 0 0 regardless 0 _ N O O of -the size 1 of 2 0the 1 3 - 1 problem, we can count on their time and contribution.
They helped with all supplier negotiations with tangible results. We have open and frequent discussions and there are always options on the table.”
THE BIGGER PICTURE While they still have much to learn about franchising and the fitness industry, the pair are aware the franchise model sees individual businesses operate under the one cohesive brand. “The biggest contribution is the ability to understand the brand and concept as the big picture and being able to effectively evaluate and contribute to operating options within the overall framework,” Nariman says. “We understand brands and customer service and the importance of a consistent and sustained style in delivering our offering.” Nairman adds he has experience in hiring staff and has developed strong management teams to oversee his two gyms, which are located in Benowa and Arundel on the Gold Coast.
TRUST THE MODEL The pair initially struggled to trust the Stepz Fitness franchise model, yet the stronger their relationship with the franchisors became, the easier it was to trust them, Nariman says. “[You need] to trust the model and follow it one step at a time, rather than spend months and years testing and understanding the whole picture before committing to action. “It all comes back to the personal trust in the ability and objectives of the master franchisors at a personal level. It worked for us.” 1 - Today, 2 7 T 1the 6 :pair 4 3is:so3confi 7 + dent 1 1 :in0the 0 model they they have plans to open several more. F
Do you fit the box? New Franchise Partners wanted now Australia wide.
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JAN/FEB 2014 FRANCHISING | 29
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DOCUMENTING THE
DRIVE-
THRU A
number of franchises are jumping on the drive-thru bandwagon in a bid to provide the time-poor customer with a convenient alternative to traditional cafes or coffee outlets. Rather than park their car, head into a food or beverage outlet and place their order, customers are able to order their morning coffee and raisin toast, for example, from the comfort of their car.
[It] reflects the brand’s desire to keep up with customer demand THE COFFEE CLUB
Coffee shop and cafe style franchises, rather than solely fast food chains are embracing the drive-thru concept. Image: Nadine Shaw Photography 30| FRANCHISING JAN/FEB 2014
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Queensland seems to be the drive-thru king, with cafe and coffee franchise, The Coffee Club opening its first outlet in the Brisbane suburb of Tingalpa last October. According to group PR and communications manager Sarah Broad, the site’s position in a hightraffic area within an emerging suburb influenced the brand’s decision to open the drive-thru. “The suburb of Tingalpa was chosen to launch the drive-thru store as it is a developing suburb of Brisbane. “A lot of commuter traffic passes through Tingalpa on their way to and from work each day which is why it is a perfect location for a drive-thru store,” she says. The drive-thru is designed to make customers lives easier, particularly during their morning commute when there is not enough time to make a much needed coffee pit-stop. “The new drive-thru model reflects the brand’s desire to keep up with customer demand and an ongoing effort to modernise its offering,” Broad explains. The drive-thru is open from 6am, and despite »
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The best way to provide convenience for people wanting their morning coffee is to offer a drive-thru service being more convenient, Broad stresses its product offering, which includes freshly made coffee and food items that can be enjoyed on-the-go, such as pastries and raisin toast, doesn’t compromise on quality. “[It] has its own unique menu to cater for the speedy service that drive-thru customers expect while still delivering the high quality coffee and food we are known for.” Additional drive-thru outlets could be in the works, depending on the success of the Tingalpa drive-thru. “We are waiting to see how the drive-thru store at Tingalpa works in that market before planning any further drive-thru openings,” Broad says.
Inside the Gloria Jean’s Coffees drive-thru in Brisbane. Image: Gloria Jean’s
GLORIA JEAN’S COFFEES Gloria Jean’s Coffees entered the drive-thru market last September with an outlet at North Lakes in Brisbane’s outer suburbs. According to head of operations, Matthew Wotton, the move was prompted by the brand’s desire to provide its time poor customers with a more convenient service. “With many guests commuting to work, Gloria Jean’s Coffees can now offer people a convenient quality cup of coffee on the go, also with a sit-in coffee house option,” he says. In keeping in line with this approach, the 32| FRANCHISING JAN/FEB 2014
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drive-thru is open from 5am through to 9pm on weekdays (from 5.30am on Saturdays and 6.30 on Sundays) and its indoor seating area caters to those on the run as well as customers with time to spare. “[The] drive-thru offers the full beverage menu of quality coffee and beverages, along with a range of delicious food options. This ensure guests receive their usual quality coffee with a tasty treat to complement, within the convenience of the drivethru model,” he explains. While Wotton won’t name any potential new drive-thru sites, they are in the works. “Gloria Jean’s Coffees are enjoying the success of their first ever drive-thru and have plans for further openings in the future,” he says.
PIE FACE Bakery-cafe chain Pie Face opened its first drive-thru in Nerang, Queensland last September. The business is in operation 24 hours a day, and offers everything from pies and pastries through to cakes, muffins and of course coffee. Commercial manager Andrew Lyme says the drive-thru forms part of the brand’s strategy to move away from capital cities and focus more on metropolitan and regional areas. “It was determined, alongside other store formats that the drive-thru could provide consumers with a much higher level of convenience and accessibility to purchase our product. “In many cases the format provides opportunity for late night or overnight trade, which would not be possible if the store was situated in a shopping centre environment, for example,” he adds. The drive-thru is designed to provide customers with a quick and convenient service, which suits its brand’s product offering, he says. “Pie Face is a grab-and-go offer by nature… and as such, we have the opportunity to achieve extremely fast transaction times comparative to some of our peers in this format. “Speed of service and convenience are essential to a great customer experience, alongside engaging and friendly service. Pie Face is focused on successfully combining these components in the drive-thru.” Lyme says Pie Face plans to open additional drive-thru outlets in metropolitan and regional areas across Australia, including one in Greenacre, New South Wales and another in North Lakes, which is situated in Brisbane’s outer suburbs. “We are assessing several other drive-thru sites along the east coast of Australia. While its early days for Pie Face and this store format, it is highly likely that drive-thrus could eventually make up the vast majority of our metropolitan and regional store network in the coming years.”
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WHAT’S THE BEST THING YOU CAN REMEMBER ABOUT YOUR FRANCHISE’S LAST EVENT? The Esquires drive-thru at Upper Coomera on the Gold Coast. Image: Nadine Shaw Photography
If it takes more than a few seconds to think of something you need to speak to us.
DONUT KING & ESQUIRES COFFEE Retail Food Group (RFG) brands Esquires Coffee Houses and Donut King are embracing the drive-thru model with open arms, and director of franchise Gary Alford says convenience is driving the trend. “The best way to provide convenience for people wanting their morning coffee is to offer a drive-thru service. “Since opening our first drive-thru coffee concept store, Esquires Upper Coomera, we have received positive feedback from customers as well as sales evidence that proves the drive thru model works,” Alford adds. The first Esquires Coffee House drive-thru opened at Upper Coomera on the Gold Coast in December 2012, and last July it began serving up slices of fresh pizza from another of RFG’s brands, Pizza Capers. Six different pizzas with toppings including Mozambique piri piri, Hawaiian and BBQ bonanza are available for purchase from the drive-thru. In addition, customers can order gourmet breads, wraps, melts, Turkish sandwiches and muffins from the outlet. He assures the rise of the drive-thru definitely does not signal the end of the eat-in coffee shop or cafe, rather the two will co-exist. “All of our drive-thru outlets also operate with the option for in store dining, so the drive-thru is an added bonus that provides an extra revenue stream for our franchisees,” says Alford. Donut King is expected to open its first drive-thru in Deagon, Queensland in February, and Alford says its offering will be completely different from all other franchises playing in the drive-thru market by virtue of its unique product offering. “It will offer coffee through the drive thru, its famous fresh cinnamon donuts, cake donuts and other sweets and treats as well as a range of cold drinks and savoury items,” he explains. Alford says RFG has identified a number of potential sites across Australia for additional Esquires drive-thru outlets. F WWW.FRANCHISE.NET.AU
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Inspire | Franchisee
THE FRANCHISEE
PERFECTING
PIZZA Aron Morris started his career with Domino’s as a delivery driver 11 years ago and is now a successful multi-unit franchisee.
H
e recently received a Gold Franny, an award based on a strict set of criteria that covers sales performance, product quality and store growth, among others, and it is presented to only one percent of franchisees. “Starting as a delivery driver, and working my way up to managing multiple stores, buying a franchise was the next obvious step. “I had been quite successful as a manager and was confident I had the ability to be successful as a Domino’s franchisee,” he says.
A SUCCESSFUL PARTNERSHIP Aron is in business with Nils Gornall, the franchisee he was employed by when he first started with the brand. He says he and Nils focus on those parts of the business that best reflect their skill sets, which works well. “Nils takes care of a lot of the tax and accounting side of things and I stick to operations. We both stick to what we do best.”
THE TRIED AND TESTED BRAND Aron stresses it is incredibly important to believe in the brand you are investing in, which is why he opted for Domino’s. “I am a huge advocate for a brand that’s been tested and that is known and trusted. Working as a Domino’s employee and being part of the corporate business for many years, I had seen a lot of the ins and outs of the business and I had also seen how rewarding the business can be,” he says. “This took the hesitation of the unknown out of the decision. Domino’s was a brand I was confident in and passionate about – that’s extremely important when deciding on a franchise.” Despite Domino’s being a global business and opening its 500th Australian store last year, Aron says it is very team-orientated. “I was surprised at how united everyone is – they all work together to achieve one common goal. From the CEO right down to individual team members, there is plenty of passion in our system.”
AN AVERAGE DAY? Aron is constantly in communication with his businesses, and no two days are ever the same. “I’m always on the laptop or smartphone either at home or in the office. There is always something to do. “I take care of a lot of the running around so the managers can do what they do best – running the store.” Despite this, Aron visits his stores each day to lend a hand, particularly during the busy periods, which he loves. “I am always there for our rush periods or busy event days serving customers and working hard like the rest of the team,” he says.
Image: Nadine Shaw Photography
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“This rush period is the most exciting and rewarding part of the day.”
ESTABLISHED BUSINESS: GREAT TRAINING While he may have been with the brand for 11 years, Aron says he is constantly learning. “When I first became a franchisee, I was all ears open to every bit of training and advice that I could get my hands on,” he says. “I am always learning new and better ways to do things. There isn’t a day that goes by where I haven’t learnt something new.” He says Domino’s delivers great training by virtue of its longevity. “Being part of a franchise system that is over 50 years old and extremely well established, there is a wealth of training material, systems and support that are proven over time.”
a fantastic group of franchisees from all across the world that challenged me to think differently. Some of these franchisees had 40 or 50 stores and one franchisee even had over 100,” he says.
THE FRANCHISEE EXPERIENCE: “CHALLENGING AND REWARDING” Aron relocated from far north Queensland to Perth to pursue his dream, a decision he is glad he made. “My partner came along as well and we are
There isn’t a day that goes by where I haven’t learnt something new
loving life here in Perth - she works closely with me in the business so it works well. Leaving the Aron has his sights firmly set on the future success family behind was tough, but at the end of the day of his businesses, and plans to open additional we’re only a four hour flight away which isn’t so stores in Perth. bad,” he says. “I once thought that two stores would be enough “I can’t imagine not taking the plunge to become butFthen I started planning the third. a franchisee and R0 1 1 4 _ 0 0 0 _ EXT 1 2 0 1 3 - 1 1 - 2 7 T 1 7–:it’s 0 some 7 : 5 of 9 the + 1 most 1 : 0challenging 0 “I was lucky enough to head to London and meet rewarding work you’ll ever do.” F
THE FUTURE
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JAN/FEB 2014 FRANCHISING | 35
THE
Inspire | Franchisee
UPS AND DOWNS OF
OPENING A FRANCHISE How did one man turn $7 into a franchise business? Patrick Weiner shares his journey.
I
n 1994 I stepped off a plane from the UK with $7 in my pocket and a dream of owning my own business. Almost 19 years later, my wife Gill and I have turned that dream into a reality. We are now the proud owners of a Bedshed franchise in suburban Melbourne. Before we delve into just how an Englishman turned $7 into his own business, let me tell you a little about myself. I’m an optimist. After backpacking around Australia, I was offered a managerial position with a retail company in Melbourne. Following this I spent 10 years with Esanda as a national training consultant. My wife and I were content with that life, but we weren’t happy. The life-changing moment came when I arrived home from one of my many business trips and our daughter didn’t recognise me. In that moment, I knew I had to be around my family more.
OWNING MY OWN BUSINESS I decided to become my own boss and began trading the markets. After several years, my passion for retail resurfaced. As my wife says, when something’s a part of you, you’re bound to go back to it eventually! After having been my own boss since 1996 there was absolutely no appeal in working for someone else and we began to investigate business opportunities. After considering various options, we decided a franchise venture would be the best for us. We spent almost a year researching – we were looking for a national company with a recognised brand, proven systems and an experienced management team. Within 24 hours of contacting Bedshed, the national business development manager, Rod Parker, had responded to my query and organised a coffee catch up with the chief operating officer, Gavin Culmsee and himself. From that initial meeting I knew Bedshed was the right choice. There was an immediate sense of synergy. Gavin and Rod talked me through the business model and answered every question I threw at them.
Gill and Patrick Weiner
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That’s one of the great things about Bedshed; they offer support every step of the way. We were able to meet with other franchisees and started getting a taste of what was in store for us. The level of support Bedshed provides on a national, regional and local level helped make the transition as smooth as possible.
PROBLEM SOLVING My wife and I knew we had made the right decision just as we exchanged the formal agreement. Rod Parker commented on how ‘remarkably relaxed’ I was for someone who had just invested a fair amount of money. However, there was no reason to be nervous. Gavin, Rod and the whole Bedshed team had assisted me with everything from developing a business plan to identifying the location of the store and negotiating a great deal. The only fear we faced was the potential of changing market forces as we opened up. However,
even though we have been told that it has been a ‘tough market’ recently, we’ve got over that hurdle, so our fear has already diminished. Whilst it was Bedshed’s business model that initially attracted us, it was the people that made the transition to franchisee enjoyable and successful – not only the professional staff at Bedshed, but also the franchisees who make up the company’s national network,” says Patrick. One of the benefits of franchising over an independent business is you have access to a whole network of people with extensive experience and knowledge and you can tap into this to help make your own business decisions. When you come up against a problem, 99 percent of the time someone in the network will have experienced it before and can offer advice and assistance. In the lead-up to opening day, a few pieces of furniture we had ordered had been delayed. My
One of the benefits of franchising over an independent business is you have access to a whole network of people with extensive experience
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A FLEXIBLE SYSTEM
Gill & Patrick in store
wife and I turned to the Bedshed network to seek advice and find a solution to this problem. Within a few short hours, we had managed to buy stock from neighbouring Bedshed stores and have this delivered to Nunawading in time for our soft launch.
SETTING TARGETS Instead of planning a formal launch, we channelled our budget into marketing and advertising to attract new customers. We wanted to let the community know the store was reopening under new management and a soft launch supported by local marketing was effective in that regard. My wife and I were definitely nervous in the lead up to opening day. Would we meet our sales targets? We had high expectations for the store and had poured significant time and energy into making sure it worked. Looking back, I actually think the nerves helped, because the adrenaline spurred us on and kept us going through a very busy period. As it turned out, we had nothing to be concerned about. During the first few weeks of being open, the store attracted many customers, all of whom were supportive of Gill and I and the store. Bedshed had encouraged us to set weekly sales targets which we did with their guidance. We found this to be extremely beneficial, as it helped put our monthly target into perspective and gave us a frequent check-in point to see how things were tracking and make changes if we weren’t satisfied.
Before deciding to buy a franchise, we wondered whether the structure would be too rigid to allow us to experiment with our business, and it’s great that has not been the case with Bedshed. For example, we decided to use a customer-based selling model, which involves truly connecting with customers and sharing the benefits of various products with them, rather than simply listing the features. The Victorian retail manager, Marwan Zeitoune was aware of my background and encouraged us to pursue this method of selling. So far the technique has worked well for us. We wanted to offer our customers something different. From day one, we decided to show our appreciation to our customers by gifting them with a jar of Yarra Valley Strawberry Jam regardless of the value of their purchase. In addition to this, we rented our own Bedshed van to extend our customer service experience and have control of our delivery process. This allows the last point of contact with our customers to be a Bedshed Nunawading employee who espouses the same core customer service values as us. We are very proud of the feedback we regularly receive from customers about our delivery team and the friendly but efficient service they provide. We want every customer to have a unique and fulfilling experience when they shop with us. We’ve been thrilled with the volume and value of sales in the initial months and genuinely believe we can continue to replicate this success and generate a significant return on investment. Bedshed has been a committed partner in the success of our store from the start. The support of the other franchisees and the professional staff at head office has been phenomenal. A few months ago, my wife and I would have never expected to be able to have even a little time for ourselves, but here we are. It’s a wonderful feeling knowing we can go in to work; make decisions on how the store should be run and still have the time and flexibility to achieve the lifestyle we were looking for. As the business matures, I have no doubt we’ll have more and more time for ourselves but our unfaltering commitment to ensure continued growth means that we are very much handson franchisees. F
We decided to use a customer-based selling model, which involves truly connecting with customers and sharing the benefits of various products with them rather than simply listing the features 38| FRANCHISING JAN/FEB 2014
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Opportunities | Fast food
RIPE FOR THE
PICKING The fast food franchise sector is broadening its offering and for the ďŹ rst time ever Australians are opting for fast food chains over their independent counterparts. By Brea Carter.
Image: Pretzel World 42| FRANCHISING JAN/FEB 2014
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Fast food | Opportunities
W
hile still incredibly popular, the industry no longer constitutes solely burger and fries franchises, but sushi, pretzel, gourmet potato and Mexican brands to name a few, and the recently released Fast Food 2013 Report Series from BIS Foodservice is evidence that fast food chains are more popular than ever. “It has been a bonanza in the fast food market since the GFC,” said the head of BIS Foodservice, Sissel Rosengren. “Not to denigrate the quality of fast food in Australia – which includes everything from a drivethru hamburger to a chicken wrap and prepared meals such as soup – but there is a noticeable ‘tradedown’ effect that occurs in any economic downturn.” According to the report series, Australians spent a total of $15 billion on fast food in the 12 months to October 2013, and burgers and hot chips are the most popular form of fast food - 141 million hamburger servings and 193 million serving of chips were sold over the period. One in two, or 47 percent, of servings in the fast food market fell under the beverages or meals and snacks categories – which constitutes fast food items such as pizza, meat pies and sushi. In addition, the report found fast food chains are overtaking independent food businesses such as fish and chip shops and Chinese takeaways. “Fast food chains are on the increase and are now the dominant force in the fast food market for the first time in Australia’s history, which goes against the notion that we are a country that loves its independents,” Rosengren said.
We are really conscious of selling franchises to ‘hands-on’ investors The number of independent stores fell from 8,969 stores in 2005 to 8,498 in 2009; meanwhile fast food chains have increased their outlet numbers by 5.3 percent each year over the same period, and snack food chains have enjoyed an average annual growth of 10.8 percent. » WWW.FRANCHISE.NET.AU
JAN/FEB 2014 FRANCHISING | 43
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Fast food | Opportunities
BUCKING BULL
Image: Bucking Bull
Opportunities in the fast food sector abound, and with such a diverse range of franchises on offer, there is no one size fits all model when it comes to choosing the right franchisee. The people behind 10 of the nation’s fast food brands outline the five key qualities they look for in their franchise partners.
PRETZEL WORLD AND NUTSHACK CEO Stan Gordon says franchisees need to understand The Franchised Food Company’s (FFCo) ethos, which is all about encouraging customers to enjoy life’s simple pleasures, to be considered for a Pretzel World or Nutshack franchise. • Enthusiasm and passion - We want people who are keen to put their ‘everything’ into their piece of the franchising pie. We want to ensure that they believe in the brand just as much as we do… and display their enthusiasm through their drive to make their business a success. • Dedication and hard work - You have to put in the hard yards to reap the rewards – and this is something we look for when bringing new franchisees on board. • Owner operated - We are really conscious of selling franchises to ‘hands-on’ investors - people who are keen to be their own boss, work for themselves and personally reap the rewards of owning a business. • ‘Outside the box’ thinking - We really do wish to attract franchisees that are keen to explore additional on-brand activities that might attract more business for their store, and add value to the overall brand name. • Adaptable - All the FFCo brands are about having fun and enjoying a treat experience. It’s imperative that this message is delivered consistently via each individual franchisee.
Dean Vella, the executive director of Aktiv Brands, which encompasses Seven Seas, Skewerz Kebabz and Bucking Bull focuses on primarily personality traits. “You can assist someone in obtaining finance quite simply, however it’s quite difficult to teach someone to be a motivated individual, or to have a positive attitude. You’ve either got it or you haven’t,” he says. • Realistic expectations - Whilst the allure of being their own boss is usually what attracts people to franchising, they need to do the homework to ensure they’re also considering the business’ realistic financial potential. • Positive attitude - What successful franchisees have in common is a motivated, positive attitude. These franchisees are open to change, eager to learn and driven to succeed. • Brand fit - Quality food is only half of what we sell at Bucking Bull. The other intangible products are satisfaction and nostalgic comfort. For this to trickle down to our customer service staff on the front line and subsequently to our customers, it’s crucial that franchisees embody and embrace the brand’s values. • Capital capabilities - The ability to invest capital is obviously a box that needs to be ticked in the recruitment process. • Doesn’t have a huge ego - For ongoing development to take place, the relationship between franchisor and franchisee needs to be completely void of ego.
LORD OF THE FRIES Sam Koronczyk, the co-founder of vegetarian burger chain Lord of The Fries, says the brand has found franchisees and managers who possess the following qualities are the most successful: • Personality traits - It is important that any applicant can show initiative but still be able to follow instruction. They need to be able to think for
A vegetarian burger from Lord of the Fries.
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Opportunities | Fast food
•
•
•
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themselves; handle problems and issues that may arise and be very solutions-driven when looking at systems and procedures. Work ethic - It is important that any new franchisee is prepared to put in the hard graft. Entering into any business requires a lot of time and work, and Lord of the Fries is no different. Prior experience - Business is business and prior experience in a number of areas can be very valuable to ensuring that a franchise runs efficiently and the franchisee understands their obligations. Working capital - This isn’t the most important consideration, but can be a deal breaker. This is simply because most businesses take some time to ramp up and we wouldn’t want to see anybody in a position where they can’t cover their costs. Planning - Has the applicant given thought to how they would like to run their store? Even if their ideas are not in line with what we would like to see, we want to know that this has been given thought.
KFC Franchise recruitment manager Amanda Glossop says the brand’s most successful franchisees live and breathe its ethos of ‘How We Win Together.’ • Passion for the brand - Our franchisees are owner operators who live and breathe KFC. They sit on all our committees to work through innovations and brand standards. • Leadership qualities - Our people are our pillar of strength. Our franchisees need to be collaborative, influential and have experience in recruiting, training and coaching people. • Emotional resilience/positive outlook - It is important to remain positive and build great partnerships with the brand. • Previous business ownership, preferably in the QSR industry - Individuals who have demonstrated successful ownership with strong business acumen and an ability to manage the profit and loss, and execute local store marketing. • Financial capacity - To grow to a three to five store operator within five years. These qualities are valued incredibly highly by the franchisor, because the success of the KFC brand very much depends on its people. “Our formula for success is people capability first - satisfied customer and profitability follow.
Go Sushi and Wasabi Warriors specialise in fresh sushi. Image: Pacific Retail Management
That’s why we believe our people are our greatest competitive advantage,” Glossop says. “Every day we strive to exceed customer expectations whilst ensuring we have a restaurant support centre culture that lives and breathes operations.”
GO SUSHI AND WASABI WARRIORS Sushi franchises Wasabi Warriors and Go Sushi prove fast food can be fresh and healthy, and Nicola Mills, the CEO of the brands’ umbrella company Pacific Retail Management, says the following five qualities separate the good franchisees from the great ones. • Positive attitude - We look for franchise partners who have a really positive outlook on the success of their business and a ‘can-do’ attitude. • Passion to succeed - A passionate business owner will have the drive to not only make their business succeed but to always strive to make it better. • Support of family and friends - More often than not… having a strong support network will get most people through any tough times. • Ability to see the big picture - Initially it’s important to work in store but gradually you need to take a step outside and work on everything else to help your business succeed, such as analysing and acting on your key performance indicators. • Positive attitude - We’ve put this in twice, as it’s the key differentiating factor from a successful
It is important that any new franchisee is prepared to put in the hard graft. Entering into any business requires a lot of time and work 46| FRANCHISING JAN/FEB 2014
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Opportunities | Fast food
franchisee and one that gives up when the going gets tough. Without a doubt our most positive franchisees are our most profitable.
MCDONALD’S National franchising manager, Lilian Tartaglia says the success of a McDonald’s restaurant depends upon many factors, particularly the franchisee’s commitment to the brand. “One of the key reasons behind our success is that we maintain the highest standards of operational excellence while still creating individual opportunities. It is essential that our franchisees agree to the philosophy of working within the framework of the McDonald’s system,” she adds. Tartaglia says the brand posits the following five qualities as most important: • The aspiration to become an integral part of your community as an employer, service provider, and local business leader. • A successful business or career, demonstrated significant team leadership and the knowledge of how to get the most out of people. • Capacity to make a significant financial investment. • Ability make a 20 year commitment. • Open to the challenge of relocating anywhere within Australia
SPUDBAR At gourmet potato brand Spudbar, co-owner Ant Morell says people must prove they are able to deliver an exceptional customer experience to be considered for a franchise. What skills does the company look for? • Passion to operate your own business - A vital ingredient to succeed in driving everything from customer service through to cost control and profitability. • Flexibility - This is vital in terms of being able to adapt with changes and challenges such as customer preferences, food trends and embracing fresh ideas. • Great with people - Important for being able to manage and motivate young staff to feel pride in the product as well as setting the tone in delivery of exceptional customer experience. • Someone who values the franchising system - Understanding how the system drives predictability of the customer experience and consistency around the product offering [and] how this ultimately relates to elements such as brand loyalty and business profitability.
Spudbar dresses up the humble potato.
• Teamwork - Teamwork is critical at both the store level and across the network. The quality of the communication throughout the network promotes learning [that is] open to sharing experiences inside Spudbar. “We believe that these qualities are critical to ultimate success of a franchise business. We have recognised the right balance of a combination of these qualities correlate directly with our most successful franchisees,” adds Morell.
ZAMBRERO Stuart Cook, the CEO of Mexican food franchise chain Zambrero looks for franchisees who are aligned with the brand’s key values and missions. It is vital potential franchisees possess the following five qualities: • Passion and love of the product • Enthusiasm for customer service • Value for humanitarian and philanthropic missions • Great leadership and team-oriented • Ambition “Zambrero has seen tremendous growth because of our current franchise partners, all of whom embody the above characteristics, which stem from an extreme passion and enthusiasm for the Zambrero values and mission,” Cook says. He adds a Zambrero franchisee will be particularly successful if they are skilled in areas including budget management, leadership and training. F
Teamwork is critical at both the store level and across the network. Communication throughout the network promotes learning 48| FRANCHISING JAN/FEB 2014
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Image: Anytime Fitness
Opportunities | Sports and fitness
SUCCESS IN
SPORT AND
FITNESS Australia’s fitness industry is proving lucrative as people seek to lead healthier lifestyles, and with such a diverse range of gym and health club franchises out there, the choice is yours, writes Brea Carter.
50| FRANCHISING JAN/FEB 2014
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Sports and fitness | Opportunities
T
he number of franchised gym and health club brands in Australia has increased dramatically over the past 10 years as local entrepreneurs establish their own businesses and overseas companies enter the market, and it seems the industry is showing no signs of slowing down. According to IBISWorld’s general manager Karen Dobie, people are becoming more health conscious, which has seen the demand for gyms and health clubs increase. “The number of venues with state-of-the-art equipment, group fitness classes and a wide range of facilities – including pools, saunas and even saltrooms – continues to grow in response to increasing consumer demand,” she says.
We encourage multi-unit growth and support franchisees in that process “Gyms have been excellent at responding to increasing and diverse working hours, opening in more locations with longer operating hours.” IBISWorld’s research* uncovered Australians will spend $6.6 billion on the health and weight-loss industries in 2013-14, $858 million of which will go towards gym memberships alone. This figure is expected to rise by 1.7 percent to 7.1 million in 201819, and the amount spent on gym memberships will increase by 3.1 percent, to more than $1 billion. So whether you would prefer to invest in a gym
that caters exclusively to women, a brand that has embraced the 24/7 concept or one that stocks your preferred equipment manufacturer, there is bound to be a brand out there that suits you.
ANYTIME FITNESS Justin McDonell and Jacinta McDonell-Jiminez brought the US-based Anytime Fitness brand to Australia five years ago, where it has been well received. It has 2300 clubs situated across 15 different countries, and McDonell says members can use them all. “They purchase a key fob, which gives them access to any club when they are travelling. It’s a good advantage for members because a lot of people do travel and get busy, so it works quite well.” Anytime gyms are stocked with Life Fitness and Precor exercise equipment, which McDonell regards as the best in the world. “You will find pricing-wise we are probably a couple of dollars a month more than our competitors but when you go in it’s a much better quality product that we try and focus on. We make sure our clubs are equipped with the latest and greatest equipment,” he says. McDonell explains Anytime is different from its competitors because its gyms are not only convenient in that that are open around the clock, they are also easily accessible. “Our clubs are likely to be located near members’ homes and they are easy to get in and out of – members swipe their key and can begin pretty much working out within one or two minutes of walking in the door.” »
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JUSTIN MCDONELL Anytime Fitness master franchisee
JACINTA MCDONELLJIMINEZ Anytime Fitness master franchisee
JAN/FEB 2014 FRANCHISING | 51
Opportunities | Sports and fitness
ENVIE FITNESS
Image: Envie
He says franchisees enjoy a great work/life balance, and the recent 10 Thousand Feet survey is evidence of this. “When we look at the lifestyle factor of that survey our franchisees are working on average around 30 hours a week compared to the other franchise groups, where franchisees are doing about 50 hours. “[The Anytime model] enables our franchisees to work less hours, and our business still operates even if a staff member is sick – members can still get into the club, you may not sign up any new members but at least the business still operates.” He says the gym’s direct debit membership structure, which 95 percent of members are on, guarantees franchisees a regular income. “Members pay on a month-by-month basis and it kind of just rolls over, so from an income point of view it is quite secure for the franchisee.” Franchisees can expect to receive extensive support from head office, as well as access to an e-learning platform. “There is an online operations manual, we do sales training, which moves through the country about every six weeks, and when the franchisee comes on board we do six weeks of intensive training in our head office,” explains McDonell. Anytime plans to open another 150 clubs in the next 12 to 18 months, and 2014 will see it continue to focus on convenience for members. “In January we are launching a more structured personal training system where members can actually book personal training sessions using an Iphone app.”
Developed by Dave Hundt, the man responsible for bringing Contours women’s gyms to Australia a decade ago, Envie Fitness is similarly a female only gym franchise. “He has been in the industry for quite some time and has an understanding of what the gap is in today’s market when it comes to female fitness,” explains business development manager Manal Haydar. The model was created around feedback from surveys that asked women questions including ‘what is it that you want from a female fitness centre?’ “We found they wanted one-one-one coaching and nurturing, a timetable with a variety of indoor and outdoor classes and a childminding facility, and this is all included as part of the membership,” she says. While it seems the trend is towards 24/7 gyms, Haydar explains Enive’s surveys found these operating hours are not a priority for women. “Our research found that even women who are quite confident with themselves find it rather intimidating to walk into a 24/7 studio because it’s pretty much do your own thing – you walk in, do what you want and walk out – there’s not much contact. “It comes back to our vision of the brand – we are all about supporting women and providing them with a one-stop facility where they feel comfortable and get what they want - I don’t think women will be getting up and putting on their sports gear at 10pm to go and train,” she adds. Envie’s royalties are determined by the number of members a franchisee’s gym has, a move Haydar says reflects the company’s vested interest in the business. “We don’t take a royalty as such, we have a debit per week per member of $2.50 - that’s the only fee we take and we’ve got no marketing levies or anything like that. “For every member that you sign up we make money, if no one walks into your doors we don’t make anything – it is a true partnership model.” Relationship managers are on hand to support franchisees with their ongoing development, national marketing support is the norm and Envie offers a cost effective equipment set-up solution. “While there are obviously set-up costs, we provide our franchisees with the opportunity to finance their fitness equipment. “We have negotiated lease terms on their behalf – they allow our franchise owners monthly payment options on security and fitness equipment, which reduces those bigger costs of setting up.” »
[The Anytime model] enables our franchisees to work less hours, and our business still operates even if a staff member is sick 52| FRANCHISING JAN/FEB 2014
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Opportunities | Sports and fitness
PLUS FITNESS
NIGEL MILLER Plus Fitness franchisor
JOHN FULLER Plus Fitness franchisor
Founded by Nigel Miller and John Fuller, Plus Fitness is an Australian owned brand that credits the franchising model to its rapid expansion over the past two and a half years. “We decided to start franchising so we could expand our chain of gyms while also maintaining the customer service culture we had, which was incredibly strong and still is,” says Miller. He believes Plus Fitness is markedly different from its competitors in the training, support staff and programs it provides. “Franchisees receive module based training at our head office for three to four days once they come on board, and they spend time working alongside a franchisee at an existing site. “They are then assigned a franchise support manager who walks them through the entire process, from the pre-sale of their memberships prior to opening onwards,” he explains. Plus Fitness nurtures its franchisees so they grow and develop with the brand, and multi-unit ownership is often the norm. “We encourage multi-unit growth and support franchisees through that process; we offer incentives for them to become multi-unit franchisees. All of our first generation franchisees are now multi-units and 30 percent of our franchise network has more than one franchise,” Miller says. Plus Fitness clubs stock either SportsArt of Flex USA equipment, and the brand has a particularly strong relationship with the SportsArt brand. “They deliver a top end product and offer exceptional rates for our franchisees, and that’s one of the reasons why we are able to offer a turn-key solution that comes up around 20 percent less than our competitors,” he says. Plus Fitness’ memberships are free from additional hidden costs – everything is included in the membership fee.
Image: Stepz Fitness
54| FRANCHISING JAN/FEB 2014
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Image: Plus Fitness
“We believe our product offering is most in-tune with the consumer. There is no contract, we don’t have any administration or access card fees and we offer free time-hold, so if for example, a member is going on holiday they can suspend their membership and they don’t pay.” Plus Fitness will continue to expand across Australia, and a member’s app is currently in the works. “It will provide members with a personal trainer in their pocket in the sense that it will offer tips for using the gym and nutrition advice, and it is a locator so they can discover where their closest Plus Fitness is.”
STEPZ FITNESS While Queensland based Stepz Fitness may be one of the smaller players in terms of franchise numbers, it is looking to expand its reach with more clubs in New South Wales at the end of 2013 and in early 2014. “We have a few more to open around Queensland so we are happy with our growth,” says director Quang Tran. Stepz gyms are stocked with TechnoGym equipment, which Tran says is of a high quality. “We’ve seen some gym models that have really poor quality equipment, and yes that franchise might be cheaper to set-up, but it’s going to cause a lot of headaches. “This is not just from a maintenance point of view but from the members’ perspective of not being able to use the equipment. Eventually it will affect the business and people will go elsewhere – and with more gyms opening people have more choice,” he explains. Quang says Stepz provides franchisees with ongoing support and marketing, and franchisees are encouraged to communicate with one another. “We are in touch with our franchisees constantly; we offer them all of the support they need. “We have a franchise coach that visits franchisees on a regular basis and they are pretty much in touch with them every week. We are like one big family so they can talk to any other franchisee as well.” »
Opportunities | Sports and fitness
Stepz plans to open another 15 clubs next year, and Tran sees this as an opportunity for both existing and potential franchisees to grow their business. “One of the advantages of Stepz is that we have more territories available - all of our competitors have granted most of theirs,” he explains. Stepz is set to introduce a number of changes to its offering in early 2014; however Tran is tight lipped as to what exactly they are. “We plan to launch all our points of difference and the new member offerings between the end of February and early March next year. We’ve been working on it for a while,” he says.
JETTS FITNESS Jetts Fitness is an Australian brand that CEO Martin Oliver explains was formed with the ‘work out on your terms’ philosophy in mind. “It was very much about dispensing all of the issues surrounding the big box club,” he adds. As the market becomes more and more competitive and additional gym franchises enter the market, Oliver says the overall member experience is highly important. “We’re very much building on that ‘workout on your terms,’ with a focus on delivering high standards and quality customer service for our members, and we are really starting to make sure that the
Jetts Fitness
experience from a members perspective is of a high level every time they come to the gym. “I think the quality of experience you get in the club depends on a combination of its cleanliness, the quality of the manager that you get and the standard of the equipment – it should all be reliable and working,” he explains. He is of the belief that the franchisor and franchisee are very much in business together, and if they get the member experience right, everyone benefits. »
QUICK VIEW: GYM FRANCHISE SNAPSHOT COMPANY NAME
YEAR OF ESTABLISHMENT
NUMBER OF CLUBS IN AUS.
MEMBERSHIP TYPE
HOURS OF OPERATION
ROYALTIES TO FRANCHISOR
FRANCHISE TERM
JETTS FITNESS
2008
182
No contract
24/7
Five percent
Five years with two five year options
PLUS FITNESS
2008, franchised since 2011
76 open, 128 sold
No contract
24/7
$895 incl GST per month
Five years with five year options
ANYTIME FITNESS
2008
320
12 month contract
24/7
$1016 plus GST per month
Six years
ENVIE FITNESS
2012
7
No contract
5am - 10pm
$2.50 per member per week
Five years with two five year options
STEPZ FITNESS
2009
15
No contract
24/7
$800+ GST per month
Five years with five year options
24/7
$875+ additional fees (including marketing) per month
10 years
SNAP FITNESS
2009
56| FRANCHISING JAN/FEB 2014
129
No contract
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www.sanchurro.com
Opportunities | Sports and fitness
“We need to understand our members and their wants, desires and needs and we need to create a technology platform around the business and the member experience that allows them to engage with us how they want to engage with us, which can very personal,” Oliver explains.
We are all about supporting women and providing a one-stop facility
“My whole principle around it is that if the franSNAP FITNESS Established in the US in 2003, Snap Fitness has chisee is successful then the franchisor is successalmost 2000 clubs in operation across countries ful,” Oliver says. including Australia, New Zealand, Egypt, Russia, Franchisees can expect to receive support from Canada, Mexico and India. regional business performance managers, a general General manager Andy Peat says Snap has manager of franchise, the company’s chief operating taken a different approach to its key competitors, officer (COO) and Oliver himself. Jetts and Anytime. “The three people most extensively involved in “They have got more numbers than we do but we operations at Jetts have around 100 years of combined just sort of worry about doing our own thing, we’ve experience in the health and fitness industry – that gone for a quality over quantity based strategy in counts for a lot in a market that is maturing,” he says. terms of our expansion.” Jetts members are able to hold their membership Snap franchisees enjoy greater flexibility in that when they go away free of charge, and there are no other they can choose between three different equipment hidden costs, Oliver says. suppliers for their gyms. “What you pay for is exactly what you get – there “All Snap clubs look and feel the same and have are no charges for holds, lockers or anything like that.” the same features, yet they might have different Looking to the future, Jetts plans to build around – it is still of the same standard, clubs F R 0 1 1 4 _ 0 0 030 _ new DRE - each 1 year, 2 0 and 1 3 it- will 1 1 focus - 2 8 on T 1investing 6 : 1 9 : 0equipment 8 + 1 1 : in 0 there 0 we just try provide the local community what they in good quality IT.
Kitchens, bathrooms & bedrooms
Dream Doors – Don’t let anyone steal your dream… Territory Master Franchise areas available with initial costs: NSW $350,000 VIC $270,000 QLD $220,000 WA $120,000
SA $90,000 TAS $80,000 NT $50,000
Hi, my name is Derek Lilly and I am the worldwide co-founder of Dream Doors, an internationally proven franchise system with a 14 year history of success. I am now expanding into Australia via Territory Master Franchisees and I am looking for Marketers’, Business Innovators and Entrepreneurs to develop the brand in Australia with me. History of success:
50 Franchises in the UK where I founded the business. 10 Franchise areas sold in NZ 2013 record Franchisee sales returns I have an extremely happy network of Franchisees in NZ (Just ask them!).
Now I want to share my success and winning formula in Australia, with like minded people. The question “does this business work or not” is no longer open for debate!
For more information email: del@dreamdoors.co.nz telephone +64 34435133
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| Opportunities Sports and fitness 1 2 0 1 3 - 1 2 - 1 0 T1 6 :
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want and offer a bit of variety. “We’ve got a really affordable range which is still high quality, and our other two suppliers are considered the cream of the crop when it comes to gym equipment,” Peat explains. Snap takes the process of site selection very seriously, and it would never allocate one of its franchise partners a site it would not operate as a company-owned club. “We stick to our values when it comes to the properties that we go into. It is about providing a convenient location for people to work out in that suits their lifestyle, rather than imposing too much of a dramatic change,” he says. As the market becomes more and more competitive, Peat is well aware of the need to differentiate Snap from its competitors. “We definitely think that next year will be a changing year for us in the sense that we are adapting to what we believe people want, and that’s a bigger space. “We have started introducing group fitness into a lot of our clubs and many of them have child care facilities now – we are not just your 300 square metre, 24 hour gym anymore,” he says. F
Wisewould Mahony Lawyers Lawyers in love with Franchising
* IBISWorld compiled information from the following reports to arrive at the statistics referred to in the introduction: R9111 Gyms and Fitness Centres, OD4195 Personal Trainers, R9112 Sports and Physical Recreation Clubs, G4241 Sport and Camping Equipment Retailing, S9512 Weight Loss Services and OD5181 Fitness and Athletic Clothing Stores.
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Snap Fitness Palm Beach Image: Snap Fitness Facebook Page
Contact: Robert Toth t: +61 3 9612 7297 e: robert.toth@wisemah.com.au
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JAN/FEB 2014 FRANCHISING | 59
GET YOUR CE OF THE SLIC
! n o i ct A
PIZZA CAPERS started in 1996 as a change from the cheap and nasty takeaway flooding the convenience food market. Using fresh, restaurant quality, wholesome ingredients, Pizza Capers prides itself on offering an interesting and varied gourmet menu. This concept has resonated with consumers and PIZZA CAPERS has grown from one family owned store in Brisbane to over 130 stores across Australia and Singapore. The PIZZA CAPERS menu has something for everyone, and is made up of four pizza categories including the new valuefocused Traditional Range, a new ‘Artisan Handcrafted’ range of single serve pizzas, the Capers Collection featuring classic PIZZA CAPERS flavour combinations, and a top of the range ‘Black Label’ category. Customers can enjoy a mouth-watering Pizza Capers gourmet pizza from just $12.95.
As well as priding itself on offering customers the highest level of service in store, PIZZA CAPERS is investing in its digital systems and the number of customers using its online ordering platforms is steadily growing. PIZZA CAPERS is part of the publicly listed Retail Food Group (RFG), whose management team believe that there is a growing market for premium, healthy gourmet pizzas available for pick up or home delivery.
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RFG is the leader in the gourmet pizza market, and PIZZA CAPERS Managing Director Peter Jones said that the Company is in a prime position to take advantage of this trend by increasing the number of Pizza Capers outlets, a project that is currently underway. “PIZZA CAPERs is rapidly expanding into regional and metropolitan territories across Australia as the taste for gourmet, hand crafted pizzas grows – now is an exciting time to join the Pizza Capers business and the opportunities are endless. “Offering the ideal lifestyle and even the freedom to keep your day job, a PIZZA CAPERS franchise could be a supplementary income or a sea change business venture.” Through RFG’s strength in brand’s philosophy, PIZZA CAPERS can offer franchisees a wealth of knowledge and experience in the franchise industry, support from industry leading support teams across marketing, human resources, training, legal and much more. New franchisees have access to a world class training academy where they will learn all the skills they need to make their business a success; from making the perfect pizza to managing rosters and supply chain.
Opportunities | Pool and spa
IN THE
FAST LANE
A
ny franchisee setting up in business is looking for a strong training program to assist them establish and grow their operation. And with the technical aspects that are part of the pool and spa services, acquiring the right skills is essential.
NARELLAN POOLS Narellan Pools has been in the pool building business for the past 40 years, and now has more than 20,000 clients. Ten years ago the brand turned to a franchising model and there are 23 franchisees operating across the eastern seaboard. What is your training philosophy? “We don’t apologise for the length or the perceived gruelling nature of our training,” says Debb Meyer. “There are so many aspects to owning and running a successful business including; operational (sales and installation), people management, accounting and financial. You can’t learn that in a few weeks and once the franchisee takes over the business, it’s all their responsibility. Training is the foundation of success, if franchisees want to skip training, we question their commitment. “What makes us different is the significant time we spend coaching our franchisees in financial management and leadership.” How long is the initial training period? New franchisees complete an intensive and comprehensive induction and training program over a period of four to six weeks focused on operational, sales, business and financial management delivered theoretically and practically. A comprehensive, user-friendly business-planning template and marketing plan is provided to franchisees, along with an independent business coach who helps to develop the business plan and regularly checks in on results. Once the initial training is complete, franchisees get involved in in-field coaching, installation assessments and support from a franchise buddy. There’s also an ongoing relationship with an independent business coach. There is a suite of resources in the company Intranet SPLASH. A national franchise support manager, national performance and sales coach, national marketing manager and public relations manager liaise with franchisees on a regular basis.
Before diving into a pool franchise check the training programs you will require for a buoyant business Image: Stasiek Pytel - Thinkstock 62| FRANCHISING JAN/FEB 2014
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What sort of ongoing training do you provide? Ongoing forums and opportunities include: • Business coaches • Narellan Pools conference • Narellan Pools summit Learning forums: Regional meetings • Sales meetings
Pool and spa | Opportunities
Training is conducted by a team of experts including external coaches and consultants and the Narellan Pools’ national franchise support team. What are the costs for franchisees? Narellan Pools recognises prior learning, and has developed a modular based training system so that franchisees can opt for training most relevant to their individual needs. Modules start at $10,000. How is training monitored? Assessments are conducted on SPLASH, and by trainers and buddies to ensure that new franchisee recruits are competent before they move to the next stage of training. We complete regular in-field assessments, monthly conference calls and one-on-one support. Why would someone invest in your business model? “One of the main reasons people are motivated to own their own business is to have a flexible lifestyle – to spend more time with their families and create better work-life equilibrium. A Narellan Pools franchise creates that opportunity. “One of the significant benefits of being part of Narellan Pools is our community and culture. We are extremely proud of the truly collaborative, transparent and supportive culture existing in our network. Each person in the Narellan Pools Community is committed and dedicated to the success of our brand and to each other.”
JIM’S POOL CARE Jim’s Pool Care has been around for 10 years and has a fleet of 65 mobile pool shops around Australia, providing pool service and the full range of pool equipment. What are franchise investment costs? Our current package is $49,000 which includes startup costs, training, introductory marketing and initial stock. Franchisees also require a new or modern white van which we will sign write for them. What is your training philosophy? Our training philosophy is to ensure that all new franchisees are comfortable and confident of the systems and processes they have to follow to complete their job. Part of this process involves engaging some of the leading pool industry equipment brands to complement our training program and provide ongoing support. We also place a heavy focus on customer service and building long term relationships with customers. Once on the road they will have a team of contacts and people they can call upon for further support if required.
How long is the initial training period? Jim’s Group provides training through a registered training organisation and as such provide an intensive three days business training at Melbourne head office with franchisees working towards a Certificate 3 in Business. This training focuses purely on the business side of the franchise. Then franchisees begin the hands-on 10 Day On The Road Training Program and use a 60 day workbook which helps them stay on track and complete any outstanding tasks. Image: Jim’s pool Care
What ongoing training do you provide? Regular team meetings and supplier training sessions ensure that franchisees share their experience amongst the group and benefit from suppliers talking about the latest industry developments and technology. Senior franchisees and master franchisors help run these sessions. There’s also a national annual conference. What are the costs for franchisees? Training costs are included as part of the franchise package price. How is training monitored? The master franchisor for each franchise strictly monitors the training and has final sign off before the new franchisee begins taking work. Jim’s Group also ensure franchisees meet their learning requirements while in Melbourne. What new training element will you introduce in 2014? We have been looking closely for many years at national qualifications. We are about to embark on shortlisting a learning provider to work with us on getting a nationally recognised pool industry qualification. Why would someone invest in your business model? There are three main reasons people invest in a » WWW.FRANCHISE.NET.AU
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Opportunities | Pool and spa
Image: Poolwerx
POOLWERX PoolWerx was founded in 1990 and has more than 105 franchisees operating 240 active territories. What are franchise investment costs? $89,800 + GST What is your training philosophy? Training starts from day one and is ongoing to remain abreast of pool regulation changes, new technologies and products, and to keep up-to-date with qualifications – and as franchisees journey from a man-in-a-van business to a multi-van and multistore operation.
Jim’s Pool Care mobile pool shop. Firstly, the system provides a great support and training network which really suits first time business owners. Secondly franchisees only pay a flat franchise fee regardless of how much they earn each month. Finally, Jim’s is a very strong brand in the home services sector and has been around for 20 years with more than 3000 franchisees around the country.
TIME FOR A CHANGE? Discover a Business that gives you more time with your family and the lifestyle you want and deserve. We source all the locations for you in your local area.
How long is the initial training period? Every franchisee undergoes a three week course at our induction and training facility in Brisbane. The Pool School is a new facility equipped with training rooms, retail store environment, and working pools and spas; franchise partners learn about the PoolWerx business, products and services, and how to run a successful business including everything from quoting through to marketing and retailing. New franchisees typically receive a weekly visit from the regional manager and as they become more »
LOCATIONS We find all the locations for you in your local area. Businesses, schools, colleges, hospitals, gyms, trade stores, hotels and resorts to name a few. BUYING GROUP Source products from our local and overseas buying group that gives you the best margins in the industry. MACHINES Stylish Italian Vending Machines that can vend everything from Snack Foods, Meals, Cold Drinks, Gluten free snacks, Protein Products and many other alternatives. Credit Card Readers, Note Acceptors and Back to Base Monitoring are available on all machines. For more information on a successful Vending Machine Business System please contact David Green on 0421 603 342 email david@fivehighvending.com.au
Our Experience and Support turns small change into BIG PROFITS
AUSTRALIA WIDE www.fivehighvending.com.au
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The Frozen Yogurt boom is well underway and Crave Frozen Yogurt is one of the fastest growing franchises of it’s kind in the world! Qualified sites are being sold quicker than theycan be secured.
NOW OPEN NEW SOUTH WALES • Liverpool (Available) • Newcastle (Available) • World Square • Townsville • Mackay • Central Park • East Gardens • Parramatta VICTORIA • St Kilda • Southbank
NEXT YEAR QUEENSLAND • Hervey Bay • Bulimba • Gold Coast • Townsville
(Available) (Under Offer) (Sold) (Under Offer)
NEW SOUTH WALES • Alexandria (Available) • Wollongong (Available) For more information contact our franchising team on:
franchising@cravefroyo.com.au www.cravefroyo.com.au/franchising
Opportunities | Pool and spa
experienced meetings become fortnightly or monthly. Even some of our most experienced and successful franchisees speak with their regional development manager two to three times each month.
training course with the National Swimming Pool Foundation (NSPF) and Traxion Training that will help all new franchise partners gain their qualifications from the start.
What sort of ongoing training do you provide? • PoolWerx – On top of training provided by regional development managers, PoolWerx runs Learning Seat modules that continually improve the professional development of franchisees and their employees. In winter, monthly full day training days cover all facets of the business and new technologies that have been developed. This training is available to all franchise partners and their employees. PoolWerx also holds a national annual convention. • Industry training – We encourage franchisees to gain their Commercial Pool Operator (CPO) certificate and take Pool Safety Inspector courses in line with relevant state requirements. We are also the first franchise to put our network through the Certificate III and Certificate IV in Swimming Pool and Spa Service – the first national qualification for the pool industry. We have appointed Traxion Training as the RTO to roll out the training. • Supplier training – Suppliers also visit retail stores to train staff on new products and host training sessions at their warehouses so franchisees and their pool technicians can learn about equipment in an operational environment.
Why would someone invest in your business model? PoolWerx assists franchise partners in growing their business skills to become successful small business operators. Through our structured support platforms and ongoing learning and development opportunities, we offer franchise partners the opportunity to grow their business in line with their personal and business goals.
SWIMART In September 2012 Swimart celebrated the 25th anniversary of the opening of the first franchised store in Miranda in Sydney’s southern suburbs and the original franchisee is still in the business. How many franchisees are in the network? Today there are 71 franchise stores across Australia and New Zealand and a fleet of more than 220 mobile service vans. What is your training philosophy? “Our training is based around the aim of providing our franchisees with competencies in the three most important facets of our business: industry and product training; business management and development training; and selling skills and customer service training,” says Chris Fitzmaurice, Swimart Australasian manager. Training is a combination of online, tutorial and hands-on learning and courses are provided at basic, advanced and professional levels. The program is spearheaded by the annual Australasian conference which includes a comprehensive range of training workshops and seminars. How long is the initial training period? New franchisees must complete a 25-day set training course as part of their franchise induction training, with additional ongoing courses during the first 12 months.
Image: Swimart
What are the costs for franchisees? All training is funded by PoolWerx with some more specialised Learning Seat modules an additional expense. What new training element have you just introduced? PoolWerx is taking all existing franchise partners through the Cert III and Cert IV recognised prior learning and developing a new Pool School 66| FRANCHISING JAN/FEB 2014
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What sort of ongoing training do you provide? There is a range of ongoing training in the three key areas of our business through the Swimart Academy. These courses can be completed online or in tandem with in-house one-on-one training. Courses are provided on three levels: • Basics – pools, spas, materials and construction and basic water chemistry • Advanced – the Certified Technician Qualification includes modules about contamination, water problems and disinfection, water chemistry, water
Pool and spa | Opportunities
We offer franchise partners the opportunity to grow their business in line with their personal and business goals circulation and filtration and maintenance issues. The Master Technician Qualification imparts expert knowledge about how to prevent serious water borne illnesses. • Professional – general business management and development skills.
sales with healthy gross profit margins and modest operating costs. Franchisees can access a diverse range of income streams including retail and service sales, equipment repair and installation and commissions and rebates. This, along with our low flat fee structure, means that franchisees have the potential to earn a Who conducts the training? substantial income. The training is conducted by in-house qualified trainer In addition to this, the Swimart business (Certificate 4) specialist professional consultants and model permits franchisees to enjoy a great lifestyle. experienced senior franchisees within the group. Once the business is established and they have trustworthy, experienced staff in place, they are not What are the costs for franchisees? tied to the business day-to-day, which allows them The cost of the initial franchisee training course for to step back and enjoy the fruits of their labour. new franchisees is included in the initial franchise Swimart is a proven concept that has been operatfee they pay to join the Swimart group. ing for 30 years. The brand is backed by Waterco Ltd, one of the world’s premium pool and water treatWhy would someone invest in your business model? listed F R1 1 1 3 _ 0 0 0 _ Br i a n 1 2 0 1 3 - ment 1 0 -and 1 8filtration T 1 4 : specialists, 3 2 : 5 3 +and 1 1a publicly : 0 0 The Swimart business model delivers high value company that operates in eight countries. F
Delivered
Potential
To achieve your corporate, professional and personal goals, contact Brian Tracy Training now.
Call Toll Free 1800 634 227 | www.briantracytraining.com.au | Franchises Available WWW.FRANCHISE.NET.AU
JAN/FEB 2014 FRANCHISING | 67
Opportunities | Chocolate report
TASTE FOR CHOCOLATE
Why chocolate is a sweet business option
C
onsumers might have lowered their intake of chocolate in recognition that it isn’t a healthy food, but chocolate lovers have converted their taste to a predilection for premium product. That’s according to the latest survey on the specialty chocolate market from IbisWorld: Specialty Chocolate Stores in Australia industry report. Chocolate has been around since the Aztecs, and we can thank British entrepreneur John Cadbury for developing the modern chocolate bar back in the 19th century. Today we have a veritable cornucopia of chocolate to tempt us but this latest report highlights Australia’s taste for both top quality products and value items. This trend for premium chocolates is predicted to drive demand in the industry for the next five years. Affordability in chocolates on sale in supermarkets and department stores which are also increasing their ranges highlights the need for differentiation for specialty stores. More than half of the industry’s revenue comes from artisan chocolates although the last five years have also seen franchise chains such as Max Brenner and Chocolateria San Churro dip into the cafe industry with the concept of a retail experience serving a diverse menu focused on premium products. While this differentiates the chocolate from the more price-conscious alternatives in mass market stores it means the premium chocolatier is competing with other cafe operations.
GROWTH EXPECTATIONS The industry growth rate is expected to be a compound 2.7 percent with the revenue in 2018-19 reaching $319.7 million. »
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Sap ntNit Sapie ntNitro ro FSNO FSNO 640 640
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Vendor finance now available* *Available to approved applicants
We are looking for dynamic people who love dealing with others and are passionate about retailing. The Snooze brand has a strong history of over 30 years in retailing and has built a very solid franchise system. We provide franchise partners with a stable platform to start their business and offer support across the entire business including: • Marketing and Promotional Support • Product Development and Buying Power • Proven operating system that includes comprehensive product and sales training • Business Management support from our on the ground field team • Assistance in site selection and property negotiations • Business finance available to approved applicants
For more details visit snooze.com.au or call Alistair Browne, our Franchise Network Development Manager on 0427 401 169
It’s amazing what a little snooze can do. snooze.com.au
Opportunities | Chocolate report
External drivers in the arena include a reduction in real household discretionary income over 2013-14, and ingredient costs; according to the report, the domestic price of milk is expected to increase in 2013-14, however Australian sugar prices and the world costs of cocoa are expected to decline over the same time. Niche shopping malls and regional areas attracting tourists are expected to be growth areas. The advantage for companies like San Churro and Max Brenner are the economies of scale and market share that can be achieved. So what can franchisors do to make the most of the customer taste for premium chocolate? • Adopt a consistent image in the market • Ensure employees are experienced and knowledgeable • Build on reputation and service “Retailers that offer friendly and professional customer service will attract repeat purchases from consumers” suggests the report.
WHAT ARE THE BARRIERS? According to the report: • High rental costs • Cost of wages – though these are expected to remain stable for five years Specialty chocolate stores are reliant on labour and improved staff training or new technology are the keys to increasing revenue growth, reports IbisWorld. The report suggests there is room for movement in the arena: “Although the industry involves a moderate level of competition, the low concentration and the lack of market dominance encourage new players to establish operations in the market.” However well-known retailers with a strong reputation are likely to retain customer loyalty, and individuals have the opportunity to join in the trend by investing in a franchise brand. “New retailers operating through franchise »
One area we can exercise our muscle in is working closely with our suppliers to mitigate fluctuations in supply F R0 9 1 3 _ 0 4 5 _ AUS
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Aussie Outdoor has become the most trusted and respect outdoor blind franchise. Aussie Outdoor franchisee’s and team members pride themselves on providing quality products and services with honesty and integrity at all times. Becoming an Aussie Outdoor franchisee is enjoyable and financially rewarding offering a great lifestyle. For further information Contact: Lloyd Gaunt on 0415 112 122 or email: lloyd@aussieoutdoor.com.au | www.aussieoutdoor.com.au
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UNHEARD Of Flexibility and Semi-Passive Income Introducing Xpresso Delights 1, 2 or 3 day a Week Business Solution At Xpresso Delight we are in the BOOMING Workplace Coffee Business
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Join the Xpresso Delight Team now and experience real Business Flexibility
HURRY Limited Offer: Your COFFEE Machines come with Locations ready for you to earn almost immediate income. www.xpressodelight.com.au
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Special Cosplay guests Sarah & Dylan pictured above.
Gametraders Live is totally unique in Australia - stores opening nationally!
IS THIS YOU? • You grew up with gaming and can tell a Super Nintendo from a Playstation 4. • You know what a Cosplayer is and how this sector is booming. • You love interacting with like-minded people and have a passion for video games, Warhammer, Yu-Gi-Oh, Pokemon and Magic tournaments, Cosplay activities plus anything else that’s hot. Find out about owning your own Gametraders Live franchise and changing your today into an exciting tomorrow. Setup costs including stock approximately $225,000 plus GST and working capital. Contact Mark Langford marklangford@gametraders.com.au or call (08) 8338 2557.
www.gametraders.com.au
Chocolate report | Opportunities
agreements will receive assistance with employee training, store fittings and equipment, marketing and computer systems, making entry into the industry relatively simple.”
CHOCOLATE AND SAN CHURRO Giro Maurici, the founder of San Churro, was pleasantly surprised by the focus on the chocolate cafe sector. “It’s obviously attracting a bit of attention. This sector has emerged from nowhere in the last 10 years and now is quite high on landlords’ priorities when they are rearranging their entertainment and leisure areas. This report is testament to this growth. In fact I would be surprised if the growth doesn’t double. “There are always going to be great artisans and patissiers educating us and raising the bar. We all know chocolate is something we have every day, picking it up when we stop for petrol, and a lot of people have scaled back from this sort of consumption. Consumers are seeking a better quality chocolate more often.” Commenting on the threat to the established chocolate cafe chains from new brands, Maurici believes there is plenty of opportunity for the existing networks to grow, with quite high barriers to entry likely to hinder incoming brands, and obvious advantages for franchisees investing in a well-known brand. “Consumers aren’t fooled by mock concepts. Concepts need integrity, and supply lines and quality products available through the year. We’re importing from Spain from artisanal families. “One area we can exercise our muscle in is working closely with our suppliers to mitigate fluctuations in supply. We’re in a high labour cost environment and becoming a bigger player does give us an advantage. “Our experience that customers are expecting, the fitouts aren’t cheap and landlords expect a high quality retail experience.” There are now about 36 San Churro outlets around the country, except in the Northern Territory, and Giro expects to “easily double” that in the next three years. Finding locations is the challenge and with the brand well-represented in Melbourne and Sydney he agrees with the report that there is room to extend beyond the metro sites. “In some regional areas we’ve found it is really easy to command attention. We’re not overlooking the regions.” Franchise brands in the market included in the report: MAX BRENNER • Established in Israel, 1996 • Opened Sydney, 2000 • Acquired by Israeli firm, Strauss Group, 2001 Global presence with 46 locations: Israel,
Image: San Churro
Philippines, Singapore, US Australian growth: 13 stores in 2008 to 31 stores in 2013 Market share: 11.1% On the menu: chocolates, hot chocolate, waffles, ice cream, milkshakes and other food and beverage items Own brand chocolate manufactured in Israel Revenue estimated at annualised 13 percent - $28.5 million [in 2012 boycotts over Israeli origins and increased competition saw a sharp fall in sales]
Well-known retailers with a strong reputation are likely to retain customer loyalty CHOCOLATERIA SAN CHURRO • Spanish inspired concept created 2004 • First store opened in Victoria, 2006 Target market: women 18-35 Australian growth: 18 stores in 2007-8 to 30 stores in 2012-13 Market share: 10.3% On the menu: chocolates, beverages, desserts, churros, milkshakes Revenue increase over five years to 2012-13 is expected to be an annualised 38.9 percent to $26.4 million [boosted by strong store growth in 2009-10] THEOBROMA CHOCOLATE LOUNGE • Opened first store 2006 Australian growth: 13 stores On the menu: handmade and Belgian-style chocolates, food and beverages. F All company information provided by IbisWorld. WWW.FRANCHISE.NET.AU
JAN/FEB 2014 FRANCHISING | 73
Issues | Trend or novelty
PICKING A
WINNER CONCEPT Will the brand you choose be a one-hit wonder or is it right on-trend with a long life ahead? Domini Stuart looks at what to consider
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Image: Anna Bizoa - Thinkstock
Trend or novelty | Issues
F
ranchising was barely heard of in Australia until the early 1970s, when the first McDonald’s fast food restaurants opened its doors. As trends go, this was a doozy. Today, there are over 750 McDonald’s outlets in Australia alone, serving meals to over one million people every day. Over the same period, franchising has grown into a $153 billion dollar industry* which encompasses many of the country’s most familiar and successful brands. Of course, there have also been brands that flared brightly for a moment before disappearing without trace, taking their franchisees’ investment with them. So how can you be sure that the franchise »
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JAN/FEB 2014 FRANCHISING | 75
Issues | Trend or novelty
you’re considering will be a winner over the long term rather than a flash in the pan? “You have to think about whether the business concept is likely to be popular in 10 years’ time and, to some extent that will be a judgement call,” says Michael Paul, CEO and founder of Pack & Send International and chairman of the Franchise Council of Australia. “But you also need to remember that, when you purchase a franchise, you’re buying a business system as well as a product. If you look at McDonald’s as an example, many people could cook a good hamburger but what makes McDonald’s stand out is the quality of the business system that underpins the whole operation.” Greg Hodson, franchise leader at PwC Australia, points out that trends tend to be associated with changes in society, such as the growing focus on health and wellbeing which is currently being driven by an ageing population. “A business related to a positive societal change is more likely to be around for many years than one based on a product that happens to be popular at the time,” he says. ”We’ve also done quite a bit of research on sustainable businesses and found that long-term success is more closely associated with riding what’s known as a growth escalator than creating one. That means you don’t have to be fi rst in to benefit from a trend.”
ACCEPTING THE NEED FOR CHANGE Many businesses fail because they are either unable or unwilling to change. “Most franchises are looking for a steady and reliable stream of revenue over the long term rather than some kind of ‘get rich quick’ scheme but you still have to understand that change is a constant,” says Paul. “The external environment is continuously reshaping itself and a successful business will be flexible enough to adapt. For example, products typically reach a level of maturity and the business must accommodate that in order to survive. McDonald’s started out without any intention of selling coffee but now they have almost as many McCafés as restaurants.” A sustainable franchise will focus on customers, not a product or service. “You can only keep pace with customers’ changing needs if you know what they are,” says Paul. “The most successful franchises have a business model which allows them to respond quickly to changes in the market place.” David Newhouse, an accredited business law specialist and franchising lawyer of Newhouse & Arnold Solicitors, believes that most fads will unravel under the scrutiny of proper due diligence. “Prospective franchisees need to be very clear
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Trend or novelty | Issues
Look out for the red flags Like any other investment, buying a franchise has an element of risk. To minimise the risk, be on the lookout for red flags like these when you do your due diligence. If you spot one, intensify your research until you’re either satisfied the business has potential for long-term success or decide that your money would be better spent elsewhere. • The franchise is a one-trick pony. If the business has been built around a single product or service does it have the potential to expand into different areas if consumer interest wanes or technology moves on? • The franchisor has no business experience. Some of the most successful franchises started small. However, before you
about what they’re getting themselves into,” he says. “They need to get a feel for the business, to understand the financial and market constraints and most of all, feel confident that they can develop a strong relationship with the franchisor. “Due diligence will often bring to light issues that the franchisor hasn’t thought about or properly understood, such as the impact of established competitors, financial models which can’t be supported or a lack of comprehensive, workable systems. “But that doesn’t mean it’s impossible to lead the way with a unique or novel product. Even in the early stages of their business, good franchisors will have well-thought-out systems and detailed research to support the business model.”
BE SURE YOU CAN GET WHAT YOU WANT FROM YOUR FRANCHISE Before you can find the right fit in a franchise you need to be very clear about what you want from the business. You should then be very rigorous in your research to ensure your goals are aligned. “It can be difficult to assess where a business sits in the market as franchisors rarely provide this to franchisees,” Newhouse continues. “It’s also quite common for franchisors to make statements in their presentations to prospective franchisees potential growth in the business without touching on any threats, weaknesses or possible pitfalls. “For example,” he says, “we have spoken to franchisees who weren’t told that the only way to make the salary they were promised was to work 7-day, 80-hour weeks, or who weren’t warned that they might find it hard to recruit staff. These are the kinds of things that can separate a sustainable business from a nine days’ wonder.”
invest in a business with little history, you need to feel confident that management has the expertise and strength to guide it through growth and change. • The franchise is growing very quickly. It’s natural to be tempted by a sudden burst of consumer interest but, if the franchise is growing faster than the skills and resources needed to support it, it could be a castle built on sand. • You’re selling wants not needs. If consumers consider your product or service to be a luxury rather than a necessity, it could be the first they cross off their shopping list if times get tough.
Hodson recommends taking a close look at the market segment the business sits in, both at home and overseas, so that you can build up a detailed picture of its size, how long it has been around and the scale and nature of the competition. But the most important aspect of due diligence might well be talking to other franchisees in the network. “That could be your best indicator of the culture of the franchise, its financial status and the quality and extent of the support you can expect to receive,” says Hodson. “It will also help you to decide whether you can get what you want out of the business.” There’s not doubt that finding the right franchise takes patience and perseverance, but searching out
The most successful franchises have a business model which allows them to respond quickly to the marketplace all of the possible red flags is crucial; it can save a great deal of money and effort over time. “For many franchisees, this is not only the biggest investment decision in their lives it’s something they know little about,” says Newhouse. “As well as doing your own research, it makes sense to engage a trusted team of franchise lawyers, accountants and financial advisors with the experience and expertise to help you make a sound decision.” F * Source: IbisWorld Franchising in Australia: Market Research Report, November 2013 WWW.FRANCHISE.NET.AU
JAN/FEB 2014 FRANCHISING | 77
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FRANCHISESELECTION.COM.AU Visit www.franchiseselection.com.au or E 1300 FRANCHISE (1300FRANCHISE 372 624) Phone 1300 (1300 372 624)
Issues | Business plan
WHY YOUR
BUSINESS PLAN
IS YOUR
BIBLE
Image: graphicnoi - Thinkstock
Your new franchise business will be dependent on a good business plan, writes Vera Randall.
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Business plan | Issues
J
ust mentioning the two words, business plan, often evokes either trepidation or total disinterest in the minds of many business owners, never mind prospective franchisees. Yet for a new franchisee preparing a business plan is critical. Firstly it signals to the franchisor you are serious and business wise, and secondly, it should clarify whether or not the franchise satisfies your key objectives - especially with regard to profitability. A good business plan is the foundation for a successful business start-up and onward growth. It sets out the things that matter to you and your eventual team and provides a day to day guide that will help you stay on track and not get lost in the jungle of decision making, email, operational and people management issues that drown many new business owners. You will only understand why your business plan is your bible when you write and follow one that captures your vision, mission and beliefs; when you write a plan that is inspiring, easy to understand, reviewed and updated along the way. Certainly you will follow the franchisor’s systems and manuals but your business plan will personalise your objectives and be easier to share with those »
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Business plan | Issues
Remember, an annual business plan, broken into quarters can be revisited and adjusted along the way who will help you make it happen. When you make your plan a living document and share key, exciting goals and objectives with everyone in your organisation you will soon not only understand why your business plan is your bible but enjoy the feeling that comes from others making it their bible too! Writing the plan is also often approached with anxiety because many business plan templates are too detailed and too tedious for entrepreneurial types. So here are some tips on writing a plan that you will enjoy writing, sharing and using.
WRITING THE PLAN An overarching objective kept down to one sentence is a good first step to ensure that your plan stays on track for the duration. This important first step may take more time than writing the whole plan however having a clear written objective will serve you well.
When I started Knitwit in 1971 it took me many weeks to condense my overall objective to just one succinct sentence. It began as one page, was reduced to a paragraph and was finally honed to a single sentence: “To teach Australian women a fun, easy method of home sewing.” And it worked wonderfully for 22 years until social change overtook the business. I tested every decision against that objective and had the words “Is what I am about to do getting me closer to my objective” typed out and taped to my computer and telephone. After defining that overarching objective I went on to write goals and action steps with timelines to measure progress. So, back to the how-to of business planning especially if you have gone ahead and bought and are operating that franchise. Define your objectives then break them down into the key areas of your business; for example » WWW.FRANCHISE.NET.AU
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Issues | Business plan
which to set measurable goals for achievement. • Write an action plan for each item including what, how, and a completion date.
Define your objectives then break them down into the key areas of your business
USE THE BUSINESS PLAN
this may be its financial performance, customer service or human resources. Hold a brainstorming session with your team, and accept all ideas as good ideas in the early stages. Make it fun using a whiteboard, coloured pens, butchers papers, coloured dots or pens for voting.
LET’S GET PRACTICAL
Note: make sure that every action is geared to achieving a goal and celebrate success as you reach a decision on each one. Involve your accountant and get their assistance to adjust the plan to fit within your budget but don’t lose the things that matter, your beliefs, values and your mission. Remember, an annual business plan, broken into quarters can be revisited and adjusted along the way. You may choose to use the simple process I’ve outlined here or a more detailed analytical one. Either way make it your bible to keep your vision on track. Whichever approach you choose, write down that overarching desire and dare to action it. Don’t be overwhelmed, “go as far as you can see and when you get there you will see further” - Tim Randall, regular Northface 100 competitor. F
• Set some goals for achievement in the next 12 months in each area. You may choose to set the goals yourself then brainstorm with your team • Make a list of what you are doing now in each area • Against each item list the new things to do, or to do better • Narrow the lists down to what’s appropriate and F R 1 1 1 3 _ 0 0 0 _ achievable M I X - by1having 2 0 1the 3 group - 1 0 -vote 2 1on T the 1 4 top : 4 4 : 1Vera 8 +Randall 1 1 : 0is 0a franchise consultant. Contact her at five items which then become action items against vera.randall@gmail.com
is now G FRANCHISIN Why buy a Mix&Go FroYo Franchise
Contact Matthew Shaw
Franchise Manager Mix and Go Froyo Franchising PTY LTD P: 0413 805 728 E: franchise@mixandgofroyo.com.au www.frozenyogurtfranchises.com.au www.mixandgofroyo.com.au
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• Join an existing froyo brand • Self Serve Concept means low wage costs • Simple and very easy to Manage • Open multiple stores • Extensive Training and ongoing support for Franchisees • Low Franchise fee and Royalties • Be your own boss • Starting from $124,000
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“Take Control Of Your Life & Build a Future for Yourself”
8 weeks paid training ($1000 per week) Ongoing Training and support Plentiful Work Leads As a former furniture/cabinet maker, Danny was confident ‘on the tools’ and found the transition to fencing quite easy. However as he had never owned his own business before, he knew he would find the administration and sales side a challenge, so the 8 Week Paid training program was definitely an influencing factor in his decision to buy. “The time was right and I wanted to work for myself,” Danny said. “During the training period as well as learning the practical, hands on side of it, I learned I needed to know to set up the business and develop my sales skills before I went out in the field.” “From a hands-on point of view, learning the different techniques used when building different types and styles of fences was very important. The trainer I had was extremely supportive, knowledgeable and very helpful.” Danny Frood – Jim’s Fencing (Blackburn)
Find out about becoming a Jim’s Fencing business owner today
131 546
www.jimsfencing.net
Issues | Exit strategy
SOMEONE SHOW ME THE
WAY OUT?
Image: Pulvret80 - Thinkstock
Why every business owner needs an exit strategy…
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Exit strategy | Issues
I
magine I’m your coach. Let’s say your fitness coach; and my instructions when you start training are, “OK, RUN!” You’d probably ask a few questions before you headed off down the track. Questions like, “well, how far?” or “for how long?” or simply “why?” Why is it then, that many franchisees and business owners start running and really don’t know where they’re headed or what they’re ultimately trying to achieve?
PLANNING Y0UR EXIT You’ve heard it before no doubt. Peter Drucker’s “start with the end in mind” has been tossed around countless times and yet, most business owners don’t have a have a clear plan for their exit. Planning for your exit or the sale of your business is a process, just like planning a marketing and promotion campaign or your staff training program. The difference is that this plan is the one most likely to deliver the greatest value. We’ve seen on many occasions that the exit is where the greatest value is created. Think of companies like Flickr that was sold after 18 months for $30 million and YouTube had just turned two when it was sold for $1.6 billion. Now you may not be on quite the same scale (yet) with your business but the principles are the same. In simple terms, you put your time in and that gives you a return. That is how you create an income. You also put your capital in and you get that back when you sell – and with some good planning it should be significantly more than you put in. That is how you build wealth. Without a focus on the wealth creation aspect, you risk getting to the point where you want to make your exit but there is nothing that canF be R 0turned 1 1 4 into _ 0 cash 0 0 _atLanywhere I S - near 1 the 2 0value 1 3 - 1 you were hoping for.
SO WHAT’S YOUR PLAN? Are you growing your business to maximise profit and therefore sale value in three years time, or are you in to pull as much money out of the business as possible to support a lifestyle? Both are valid approaches but likely to lead to very different outcomes at sale time.
Develop your team so the business is not entirely dependent on you Your exit strategy doesn’t have to be complex. It could be as simple as this; build the business and sell it in three years time for $1.5 million dollars. When you have the big picture clearly defined, the smaller things tend to fall more easily into place. If your plan is to maximise asset value when you sell (and shouldn’t that be everybody’s plan?) there are a few key areas to focus on that will help you get there: • Develop your team so the business is not dependent on you. If it is, it won’t be worth as much when you leave • Ensure that you follow the systems and processes that create the right customer experience and protect your brand • Maintain accurate and up-to-date financial records • Keep the end game firmly in mind! Getting these things right will contribute to maximising the asset value of your business, so that when it comes time for you to ‘exit stage left’, you leave with much more than a round of applause. F Natale 1John - 2 Di 7 T 1 6 :is 4managing 1 : 3 1 director + 1 1 : of0Axis 0 Advisory, a boutique consulting firm
Thinking of becoming a Franchisor or Franchisee? Franchising is an exciting business opportunity but requires specialist legal advice. MST Lawyers is widely recognised as one of Australia’s leading franchising law firms. We advise franchisors, franchisees and suppliers to the franchising sector throughout Australia and internationally on all aspects of franchising. Our dedicated team practices exclusively in franchise law. We offer fixed fees for a variety of franchise work.
MST Lawyers 315 Ferntree Gully Road, Mount Waverley Victoria 3149 Australia Tel: 1300 MST LAW or +61 3 8540 0200 Email: mst@mst.com.au www.mst.com.au
Contact our franchising specialist team: John Sier, Philip Colman & Raynia Theodore
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Issues | Before you buy
8
THINGS YOU NEED TO KNOW
BEFORE YOU BUY
1. THERE ARE NO GUARANTEES Going into business is a risk. For anyone looking to build their future out of business ownership it’s important to recognise that investment does not necessarily yield the expected returns. Even before potential franchisees prepare to commit savings and bank loans to their business venture it is worth evaluating just how much they can afford to lose – because it just might happen.
2. A FRANCHISE IS HARD WORK
A FRANCHISE
There are examples of franchisees working less than they used to as employees and earning more, but they are a minority. For most franchisees the reality of the investment is that hard work is going to build the business. This is particularly true at the start of the franchisee’s business; whether the venture is as a sole trader or running a retail store with staff, being the franchisee means doing whatever it takes to get customers, keep them, and grow the business.
3. FRANCHISING IS A PARTNERSHIP Sometimes franchisees come unstuck when they don’t understand just how much work it entails to run a business, but at the same time expect the franchisor to step in and fill the void. Franchising works when both parties in the agreement understand their roles and responsibilities, and are committed to building the business. The franchisor brings to the table a business model that has been tried and tested, training, some form of support, marketing and of course a brand. Franchisees pay for these through initial and ongoing fees which also contribute to the brand’s development and the growth of the network. In return they are required to comply with the franchisor’s rules and guidelines and follow the operations manual.
4. UNDERSTANDING THE FINANCIALS ISN’T JUST FOR ACCOUNTANTS
Investing in a franchise is the path to career independence for many but there are risks involved
When franchisors quote investment costs the information will vary. Some provide turnkey costs, so a franchisee knows what it will take to open up their business, others don’t include vehicle leasing or shopfitting costs for instance. It is imperative for any franchisee to understand any hidden costs that they will need to pay – there might be legal fees for both parties, for instance, that fall to the franchisee. An accountant, particularly one experienced in franchising, can help evaluate the financial side of the franchise but it’s critical that the prospective franchisee really understands the numbers involved.
5. THE TRAINING BONUS One of the great benefits of franchising is the training that new franchisees get before they start their business. No independent business has this
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Before you buy | Issues
advantage. The training can be focused on operations and running the business on the frontline, and on developing and building the business. It’s worthwhile assessing if the training on offer will suit requirements and fill in the skill gaps.
It’s critical the prospective franchisee really understands the numbers
6. DO DUE DILIGENCE Conducting due diligence on the franchise and its operations is a vital step before signing an agreement. Franchisees are best served by doing their own comprehensive research on the franchise brand, the directors running the business, competitive opportunities, possible locations and local demographics. Expert advice on legal and financial matters is essential too, but a franchisee will gain more confidence and be sure of the investment opportunity if they conduct vigorous due diligence.
ie 15 years(5+5+5). This means the franchisee signs up to the first five years, the next two five year slots are optional – this is dependent on the franchisor’s willingness to renew the contract and the franchisee’s performance.
8. FRANCHISING IS GOVERNED BY A CODE OF CONDUCT
The Australian Competition and Consumer Commission regulates the Franchising Code of Conduct, which comes under the Trade Practices Act. Under the Code there are strict guidelines governing 7. RENEWAL OF AN information, the processes for purchasing a franAGREEMENT IS OPTIONAL chise, the renewal or non-renewal of an agreement, Almost without exception franchisees will sign an and the conduct of both parties in between. agreement to operate their franchise for a set period Seeking good advice can be costly, but then so is of time. After this they may or may not have the losing a business. option to renew for another term. Quite often franIt’s worth committing funds to third party guidF R0 1 1 4 _ 0 0 0 _ AUT 1 2 0 1 3 - 1 1 - 1 9 T1 7 : 0 8 : 4 6 + 1 1 : 0 0 chisors explain their franchise terms as an equation ance before signing any agreement. F
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How to... | Business management
STAY ON
TOP
BUSINESS
Image: Otmar Winterleitner - Thinkstock
When you buy a franchise, you’ll learn how to operate the business on a daily basis and that will set you up for managing the day to day detail. By Kate Groom
OF YOUR
Good management habits will help your business be more enjoyable
H
owever there is more to staying on top of a business than maintaining operations. Staying on top of your business means taking responsibility for its performance. It’s about making sure there is enough money to pay the bills, it’s about meeting legal requirements and directing the business so you have a good chance to achieve your goals. Most new franchisees don’t have experience of how to run a business. They learn as they go. But by starting off with an understanding of what’s involved, you can get off to a faster and more confident start.
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BENEFITS OF GOOD MANAGEMENT SYSTEMS You’ve probably met people who don’t seem to be on top of things. Perhaps you have in mind a cafe that’s short staffed or a tradesman who is disorganised with appointments or late with invoicing. Some business owners aren’t financially prepared for the end of their lease, or are unprepared if a key staff member leaves. Others often seem anxious about bills. Sometimes weak business systems contribute to financial stress. That’s one important reason to pay attention to the management side of things. It’s not »
How to... | Business management
just about avoiding problems though! Good management habits will help your business be more enjoyable. They will help you feel confident the bills will be paid, help you make good decisions, and you’ll be able to deal with problems more easily and quickly. All this means less worry about the back office, and more time and energy to keep customers happy and coming back. Also, as your business skills develop, these will help you expand, add a second location and take on new challenges in business or within your community.
Because there’s so much to take care of, business management can seem daunting and is sometimes neglected RUNNING A BUSINESS: WHAT’S INVOLVED? One of the biggest mistakes people make is to assume they know what’s involved in running a business. But starting an enterprise means learning how to run one. Before they start a franchise, most people haven’t been involved in the all the detail of managing an organisation. And there’s a lot involved! Running a business includes getting the accounts done, paying staff and suppliers, and complying with government regulations, dealing with the bank, fixing the computers. Because there’s so much to take care of, business management can seem daunting and is sometimes neglected. But with an understanding of what good management looks like, and how to do it, you can set up systems that will help you stay on top of your business.
THREE FOUNDATIONS FOR GOOD BUSINESS MANAGEMENT One way to approach this is to think about running the business in three parts. First is day-to-day administration. These are the systems and procedures for things like financial record keeping, paying staff, rostering, and having necessary supplies on hand. Related to the administration side are compliance obligations. These relate to government, legal and franchise requirements and include taxation, company administration, abiding by wage regulations and workplace safety. 92| FRANCHISING JAN/FEB 2014
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The third part is the overall business management. This is about setting goals, monitoring results and making decisions that help you progress towards your goals.
FIVE ACTION STEPS FOR NEW BUSINESS OWNERS So, if you’re starting a business, what can you do to help stay on top of things? Here are five habits of successful business owners we’ve known. By implementing these practices from the start of your business and you’ll find it much easier to manage your own business well. 1. Set financial targets – Financial targets help provide a focus for your efforts. Your plan should include targets for sales, costs and enough profit to repay loans, the money you’ve invested, and to you a wage for your work, as well as a dividend as the business owner. 2. Establish financial systems – A routine for your record keeping, receiving and making payments and handling paperwork and managing cash flow will help you get a sense of control. Many people find it best to engage a qualified, certified bookkeeper. This avoids you having to do the work at nights and weekends. 3. Have monthly business meetings – This is where you’ll check on progress towards your goals, review your financial results, consider business problems and make plans to address them. Without such a meeting people often fall behind on their goals and it becomes difficult to catch up. 4. Consult appropriate advisers - You can’t possibly have expertise in every area relating to business. Also, it’s very difficult to effectively analyse your own business. That’s why you must engage appropriate advisers including a franchise accountant and independent business adviser or coach. Your advisers should also have relevant business experience and skills to alert you to problems. 5. Seek continual improvement – Continuous improvement means learning from past experience: what worked and what can you do better. This is important because you simply can’t become a business expert overnight. It includes investing in your personal development to increase your business skills. Whether you’re new to business, or already established, these practices will help you run a better business. F Kate Groom helps franchises meet the challenges of doing business today’s economy. Kate is co-founder of Smart Franchise – a business which provides financial and business acumen training and coaching and conference sessions for franchises (www.smartfranchise.com.au).
The home improvement product of the decade. The business opportunity of a lifetime. If you have a head for business and an appetite for success, talk to us about running your own fully systemised and supported, synthetic grass business. Already the market leader in half the country, we’re now ready to conquer the rest, but be quick as only 50 Green Planet Grass franchise opportunities are available. Visit gpgfranchsie.com.au or contact Justin Everley on 0432 498 431,
RARE_GPG22161
office (08) 9209 2669 or email justin@greenplanetgrass.com.au
How to... | Negotiate a better deal
MIRROR,
MIRROR ON THE
WALL... How can you best negotiate a franchise deal that gives you what you want? Lawyer Steven Clare has some tips.
Image: LuminaStock - Thinkstock
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Negotiate a better deal | How to...
T
raditionally in a negotiation (for whatever cause it might be) the parties involved consider their own interests and take their own positions. They look at how to gain some advantage over the other and in many instances seek to exploit the other party. However, the business landscape has changed and with this in mind, potential and existing franchisors and franchisees must now work together in a much more collaborative fashion, in challenging economic times. Working together they will simply be able to achieve greater outcomes. To understand how potential franchisees should approach negotiation, let’s flip the situation and look at the franchisor’s stance.
WHAT THE FRANCHISOR WANTS Franchisors are now in a very different position in the marketplace. Competition is fierce, very fierce and we all understand this. However, it is much more than just competition at play, it is a convergence of many business, technological and social factors that makes today very different. Franchisors must not only deal with the issues that arise in their business daily, they must also embrace and understand the concept of what really makes a good franchisee for their network. This is fundamentally important for their network business to grow and succeed. A network business is like a team, working to achieve a common goal; it is a community. Those typical day to day issues that a franchisor faces are ones that are commonly part of most, if not all businesses. They include ensuring the correct implementation of systems and procedures; and ensuring that they are providing the best services and or products throughout their business, so that the end consumer will continue to regard them as a premium and trusted supplier. However in the current ever-changing marketplace, franchisors and franchisees alike should also consider utilising those old fashioned notions of discernment and business wisdom, as to who they will allow into their team and thus into their network business. Ultimately, good or bad franchisees will make Âť WWW.FRANCHISE.NET.AU
JAN/FEB 2014 FRANCHISING | 95
Snap Wants You! The skills you’ve developed in your career can lead to a rewarding new life as a Snap Franchise Owner. We have opportunities across Australia for high calibre, outgoing and entrepreneurial people who are looking to own a business and achieve work/life balance. The many benefits of a Snap Franchise include: • One of Australia’s leading brands • Progressive company offering Print, Design and Websites • Generate an income stream now and for the future • 5 days a week operating hours • Be your own boss and live the life you want • Full training and a proven business success model • National coverage and Australian owned
Want to know more? Snap Franchising Ltd 1300 810 233 or email snapfranchise@snap.com.au
Negotiate a better deal | How to...
or break their network business. This then turns our discussion to the necessary mindset of a franchisor and to the issue of negotiating the deal and by this I mean negotiating the terms of the legal and business relationship, i.e. the franchise agreement and ongoing business dealings. Assuming that all the suitable due diligence checks have been conducted on a potential franchisee candidate, a good franchisor should always seek to place a prospective franchisee through that filter which goes beyond legal due diligence.
nature, a good and smart franchisor will negotiate a fair deal, such that they will be happy to have them join their network business, in order to achieve mutual commercial outcomes.
The filter of discernment This is about determining whether a candidate will make a good or bad franchisee, by not only bringing together all the information before you, it (most significantly) fairly and correctly considers the candidate(s) themselves: • Their very nature • Their level of determination • Their level of courage and their tenacity and willingness to follow the lead of the franchisor - as a franchisor is responsible for good leadership in their network business. qualities FSimply R 1 1 stated, 1 3 _ 0if 0one 0 _finds T Cinherent C 1 2 0 1 3 - 1 in the prospective franchisee which are of a high
So negotiating a good deal can only be a good deal when it is good for all parties involved and this will be more likely the case when a prospective franchisee has the right personal qualities that will make the franchisor see that they must have them as part of their network. As a franchisee or potential franchisee, your focus, mindset, attitude for success and disposition is what is truly critical in any negotiation with a franchisor. F
Your focus, mindset, attitude for success and disposition is what is truly critical
Steven Clare is the managing partner at THINK Franchise & Commercial Lawyers and CEO and founder 0of- AFSA 1 4 T- 1the4 Australian : 2 9 : 2 Franchise 2 + 1 1 :Support 0 0 Alliance. See www.thinkfranchise.com.au & www.myafsa.com.au.
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$45,000 + gst includes equipment, sign writing, uniforms, stationery & training. You supply a vehicle, it need not be new.
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www.theconcretecutter.com.au Bruce Miskin 0499 399 355 Email: bruce@theconcretecutter.com.au
JAN/FEB 2014 FRANCHISING | 97
Resale | How to...
PURCHASING AN EXISTING
FRANCHISE? When purchasing an existing franchised business, there are a number of factors to consider. By Peter Rouse team leader of franchising at Rouse Lawyers
P
urchasing a franchise is exciting, but the length and complexity of the legal documentation and other considerations to take into account can be quite daunting. There are five things to consider: 1. the terms of the contract of sale. These should be conditional upon the terms of the franchise agreement being acceptable to the buyer; 2. the most appropriate entity with which to purchase the franchised business and which delivers the greatest asset protection and taxation benefits; 3. the terms of the business premises lease associated with the franchise; 4. whether the assets of the franchised business are encumbered; and 5. the terms of the franchise agreement. This document contains the key elements of the relationship between a franchisor and franchisee, including: • initial and ongoing franchise fees • termination and default; • supply of goods and services; • other financial payments, such as marketing fees; • restraint of trade; • disclosure requirements; • intellectual property; • pricing; and • dispute resolution procedures.
THE FRANCHISE AGREEMENT
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The form of the franchise agreement should reflect the practical commercial working of the business rather than be structured purely on legal considerations. Franchise agreements by their nature vary enormously and there are also a number of different permutations such as master franchise agreements, multi-unit franchise agreements, area developmentfranchise agreements and joint venture agreements. Before signing a contract to buy a franchised business, all prospective franchisees should seek legal advice from specialists in the franchising sector who can: • advise on the different structures available, and determine the most appropriate structure given the prospective franchisees’ position and goals; • negotiate or draft the contract of sale; • liaise with accountants and other advisors; • conduct a thorough review of the franchisor’s documentation; • conduct a thorough review of the premises lease; • explain the key terms of the documentation in plain English; • alert a prospective franchisee to any peculiar or unfair provisions that appear out of the ordinary; • negotiate the terms of the documentation with the franchisor and/or the landlord; and • manage the contract of sale up to settlement, including post-settlement matters such as payment of transfer duty. JAN/FEB 2014 FRANCHISING | 99
How to... | Asset protection
ASSET PROTECTION -
IGNORE AT YOUR
PERIL
Whether you are buying a business or already operating one (or two), asset protection should be at the forefront of your mind.
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Asset protection | How to...
T
here are various ways of protecting your assets. Asset protection considerations involve trying to protect business and/or personal assets from any possible future financial setbacks, business, partnership or family disagreements or business failure. Assets of the business generally fit into two categories: tangible and intangible assets. There are different ways of protecting each of these categories. For example, tangible assets (e.g. equipment or vehicles) can be protected by insurance whereas intangible assets (e.g. patents or trademarks) have other means of protection afforded by the law, such as registration.
Tangible assets can be protected by insurance; intangible assets have other means of protection STRUCTURING Image: Ivan Bliznetsov - Thinkstock
Correct structuring at the time of purchase can provide protection of assets, limitation of personal liability and the ability to stream income to more than one individual. Corporate and trust structures are the most common among business owners in Australia. Any business should have a business plan dealing with all aspects of its operations and to ensure that in the event of accident or illness of key person(s), business decisions are carried out by the appropriate people. Further, if a corporate structure is part of the business set up, there should be a shareholders’ agreement in place outlining, amongst other things,  WWW.FRANCHISE.NET.AU
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Asset protection | How to...
exit strategy for each shareholder and how the business assets are to be split up in the future.
BUSINESS INSURANCE All tangible assets of the business, which can be physically destroyed, can be protected through insurance. Insurance can also protect the financial position of a business in case of personal liability or other claims being made against the business. Business insurance from such an event may be the sole reason your business can survive. Covers such as public and product liability insurance, workers compensation insurance and key person insurance are a must for most small businesses to ensure minimal financial and other strain on the business in the event of any unforseen circumstances occurring.
PROTECTION OF INTELLECTUAL PROPERTY The protection of the intellectual property of a company is important for franchisees and franchisors. However, franchisees should note that most franchise agreements do not entitle franchisees to actually own any IP within the franchise system, so, for that reason, they may not actually have any IP assets to protect.
Every shareholder of the business should have a valid will which reflects the asset distribution
WILL
Every shareholder of the business should have a GET ADVICE Every business owner should review their business valid will, which reflects the asset distribution and and personal assets and obtain legal and financial what happens to the business (or your share of it) in advice to ensure asset ownership and business structhe event of their death. The will should be updated ture affords appropriate protections. F as new assets or businesses are acquired. One thing to remember is that marriage nullifies anyA will place D _ put F R in J U S S prior E P _to1marriage, 2 . p d f unless P a itg was e 1 Ilya 1 4Furman / 0 8 and / 1 Jane 2 , Garber 9 : are 4 1solicitors A M of Franchise Legal with offices in Melbourne, Sydney, Brisbane and Adelaide made in contemplation of marriage.
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How to... | Working capital
$TART! What are your business working capital needs? In this article, Jamie Bishop looks at the role of working capital and why counting the costs before you start is absolutely essential for business survival.
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Image: BrianAJackson - Thinkstock
L I A F T ’ N DO BEFORE YOU
Working capital | How to...
WHAT IS WORKING CAPITAL? Working capital in its simplest form is cash that is used in a business. It can also take the form of current assets and liabilities such as stock, debtors and creditors. These items are not cash but will be turned into cash during the trading cycle. Working capital is the lifeblood of any business. Working capital is closely linked to the concept of cashflow; it is the cash that flows through the business during the trading cycle. The trading cycle varies widely from business to business and when assessing how much working capital is required to run a business
it is critical to clearly understand this trading pattern. For a retail business the trading cycle may look like this: 1. Receive stock on credit terms (creditors) 2. Pay wages and other expenses 3. Sell stock on credit terms (debtors) 4. Pay creditors 5. Collect debtors In a non-retail service business stock will be replaced by work in progress (WIP). The length of time taken to complete this cycle will vary significantly 
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1400 .com.au
How to... | Working capital
from business to business; generally speaking the shorter the cycle the less working capital that is required.
HOW MUCH WORKING CAPITAL DOES A BUSINESS NEED? Typically a business needs enough working capital to fund one full trading cycle. That is the cash that must be expended to supply the goods or services before collecting the revenue from the customer. Once collected some of these receipts will be re-invested as the working capital required to fund the next trading cycle. In this way the working capital continues to circulate through the business. It is important that some additional working capital is set aside to fund various contingencies which occur from time to time.
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WHERE DOES WORKING CAPITAL COME FROM? Working capital may be raised in four ways: • Cash invested by the proprietor • Money borrowed from a financier • Cash generated from business profits • Cash generated by reducing the amount of working capital required to fund the trading cycle Successful businesses place a high priority on the fourth method. Reducing the working capital required to fund the trading cycle will result in what is often referred to as free cash. This may be achieved by: • Reducing the level of stock / WIP held • Reducing the period of time stock / WIP is held before it is sold • Collecting debtors quicker • Paying creditors slower These strategies are the easiest and most immediate ways to improve the cashflow position of any business.
WORKING CAPITAL [CASHFLOW] FORECASTING A working capital forecast is generally referred to as a 2 0 1 3 - 1 1 - 1 5 T 1 2 : 0 9 : 5cashflow 6 + 1 1forecast, : 0 0 a component added to the end of a budget forecast. A budget is a forecast of a business’s »
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How to... | Working capital
profit position, usually completed on a monthly basis for each financial year in advance. The cashflow component uses the budget figures to estimate a bank balance at the end of each month. This is achieved by adjusting the profit for movements in debtors, creditors and capital items during the period. It is important to understand profit is not the same as cashflow. The main purpose of the cashflow forecast is to ensure the business has sufficient working capital to trade through the budget period. Many profitable businesses have failed due to insufficient cashflow.
The four strategies outlined above to reduce working capital are a key component in funding growth. It is often working capital that limits the speed at which a business may grow; experience tells us that many businesses that are unable to properly manage growth, fail. Working capital is a critical component to all businesses and it must be carefully managed to ensure the business has sufficient funds to trade. A cashflow forecast should be prepared in conjunction with the budget. Successful management of working capital will enable a business to grow and take advantage of opportunities in the future. If you have concerns in respect to managing working capital you should consult your financial advisor. F
FUNDING GROWTH Growth can be a very difficult thing for a business to manage. An increase in business activity usually leads to more working capital being tied up in the trading cycle and this increase in working capital must be funded from somewhere.
Jamie Bishop is partner business services and franchising, McLean Delmo Bentleys
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Advice LEGALESE MADE EASY | LEGIT
To lease or
not to lease I ...that is the question
n franchise networks that operate from fixed premises, the decision of who holds the head lease is usually a decision made by the franchisor. The decision comes to an assessment of two factors by franchisors: 1. The degree of control the franchisor wishes to have over the franchise site and the franchise network; 2. The level of risk the franchisor is prepared to assume.
The most common property holding options in a franchise system are as follows: • The franchisor holds the head lease and grants a licence to occupy to its franchisee; • The franchisor holds the head lease and grants a sub-lease to its franchisee; • The franchisee holds the head lease and provisions are incorporated in the head lease providing for the transfer of the head lease to the franchisor in certain circumstances (eg breach of the head lease); • The franchisee holds the head lease and the franchisee, the franchisor and the landlord enter into a separate agreement providing for the transfer of the head lease to the franchisor in certain circumstances (e.g. termination of the franchise agreement); • The franchisor/franchisee owns the freehold of the property. If the franchisor owns the freehold it will grant a lease to the franchisee.
If the franchisor becomes insolvent the franchisee may lose its right to occupy the premises
Image: Linda & Colin McKie - Thinkstock
RAYNIA THEODORE Principal, Mason Sier Turnbull
WHERE THE FRANCHISOR HOLDS THE HEAD LEASE: If the franchisor holds the head lease franchisees often assume that this minimises their risk, however, the franchisee is usually asked to sign an occupancy licence or sub-lease which will require the franchisee to abide by the terms of the head lease. The main advantage to the franchisor holding the head lease (especially if the franchise network is large) is that the franchisor will no doubt lease numerous premises and will have well established WWW.FRANCHISE.NET.AU
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Image: dolgachov - Thinkstock
Advice LEGIT | LEGALESE MADE EASY relationships with landlords, giving the franchisor bargaining power to secure better sites and negotiate better lease terms for its franchisees. Another advantage is that the franchisor, as tenant, is primarily liable under the head lease to the landlord. The disadvantages to the franchisor holding the head lease include: • The franchisor maintains control over the lease, the franchise site and the renewal of that lease. In many franchise systems the franchisee will have little say in the negotiation of the lease terms and its renewal. And if the franchisor becomes insolvent the franchisee may lose its right to occupy the premises as we saw with the fall of the Angus & Robertson network; • There may be added legal costs because the franchisee may be required to pay the franchisor’s costs associated with the lease as well as its own.
WHERE THE FRANCHISEE HOLDS THE HEAD LEASE: If the franchisee holds the head lease it will have control of the franchise site and the negotiation of the terms of the lease. In the event of franchisor insolvency and subject to the terms of the franchise agreement and lease, the franchisee may be able to “debrand” its business and continue operating from the premises. The consequence of having this control is that all the risk associated with the lease will also be with the franchisee.
Retail leasing laws offer considerable protections to franchisees APPLICABILITY OF RETAIL LEASING LAWS The application of retail leasing laws is complex and varies greatly from state to state. The retail leasing laws in Victoria contain a narrow definition of the term ‘lease’. The law applies to leases, sub-leases or agreements to lease and former leases. Licences are not specifically mentioned. The question of whether the retail leasing laws will apply in Victoria will depend on whether the arrangement between the parties is a licence which in turn largely depends on whether the right granted to the franchisee is a right to exclusively occupy the premises. In most other States of Australia the retail leasing laws do apply to licence arrangements. 110| FRANCHISING JAN/FEB 2014
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So unless an exception in the retail leasing laws applies, retail lease laws Australia-wide will cover leases between the franchisee and the landlord, and sub-leases between the franchisee, the franchisor and the landlord. Licence agreements between the franchisor and the franchisee in most States of Australia will also be caught. Retail leasing laws offer considerable protections to tenants (franchisees). For example: • the laws impose onerous disclosure obligations on landlords to give information about the proposed lease, its terms and, if the premises are in a shopping centre, details of any plans or redevelopments that may affect the centre; • tenants are given the right to a minimum five year term; • restrictions are imposed on the manner in which rents can be reviewed;
TOP TIPS FOR LEASE AGREEMENTS When considering purchasing a franchise that is to operate from fixed premises: • Franchisees need to ask who will be required to enter into the lease of the premises; • Irrespective of who holds the head lease franchisees should seek their own independent and comprehensive legal advice in respect of the terms of the lease and any other occupancy document the franchisee is asked by the franchisor to sign. This is critical to ensure the franchisee: a. is satisfied with the commercial terms of the lease (eg the term, options and the rent); b. understands its obligations under the lease and any other occupancy document; c. receives appropriate advice as to the applicability of the state retail leasing legislation to the lease or occupancy arrangement between the franchisee and the franchisor or the franchisee and the landlord. F
Opinion THE SKETCH | TRENDS AND DEVELOPMENT
Leadership and the franchise network
ANDREW TERRY Professor of Business Regulation in the University of Sydney Business School
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systems of hundreds of outlets providing business and employment opportunities are real and inspiring stories of leadership.
DIFFERENT STYLES OF LEADERSHIP These franchise leaders will have different styles – authoritarian, paternalistic, democratic, laissezfaire, mentoring – but the most effective leaders have a repertoire that includes a range of styles. They will lead rather than simply manage. They will be actively practising the advice of Ronald Reagan, not a bad leader himself, to “Surround yourself with
Franchise systems provide best examples of leadership the best people you can find, delegate authority, and don’t interfere as long as the policy you’ve decided on is being carried out”. It should also be remembered that different challenges may require different leaders. Winston Churchill, Britain’s wartime Prime Minister, was undoubtedly one of the world’s greatest ever leaders. He eschewed party politics and created a wartime coalition cabinet which included his Labour and Liberal rivals. His leadership was inspirational. At the end of the war his approval rating was 83 percent yet he led the Conservative Party to a very heavy election loss; the public decided that the qualities of wartime leadership were not suited to domestic policies in peacetime. Churchill’s experience is particularly compelling for the franchise sector. Franchise systems experience different challenges at various stages of their development and it is hardly surprising that the leadership of a founder in building a system to critical mass utilises a different skill set to that required to lead a system to one of national or even international prominence. Prospective franchisees need to be confident that there is real and effective leadership of the franchise system they are considering; without it the aspirational words in the glossy brochure will not be worth very much. And they need to understand that they too are leaders and will be most effective with a vision for their business and the ability to inspire their team to work enthusiastically in pursuit of this vision. F
Image: Robert Churchill - Thinkstock
W
hen I was a kid growing up in a small town in New Zealand I used to play follow the leader with my friends. Looking back it doesn’t seem like much fun but life was simpler then. There was great prestige in being the leader and the position at the head of the line was invariably monopolised by one particular boy whose leadership credentials derived from a combination of size, threats, cunning, manipulation and judicious distribution of sweets. Why the rest of us dutifully followed I now have no idea. Unfortunately his leadership skills which were so effective in the playground didn’t serve him well in the real world but he survived prison and is now into horticulture. There’s a lesson in that somewhere. Much has been written on the meaning of leadership. The “vision” thing features prominently. While few would disagree with the observation of Theodore Hesburgh that the “very essence of leadership is that you have to have a vision” the real world qualification of Warren Bennis – that “leadership is the capacity to translate vision into reality” – is obviously very significant. We see this played out in every field of human endeavour from the national political stage to the local community group and from the ASX top 100 companies to more modest business operations. And of course in Australian franchise systems which provide some of the business world’s best examples of leadership. The overwhelming majority of the 1200 franchise systems operating in Australia started life with a founder with a magnificent vision and one outlet. In the translation of the founder’s vision into successful
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Opinion PEOPLE | LEADERSHIP
Warning: playing games can cause blindness
KARLI FURMAGE CEO of The Franchise Relationships Institute, a research and training organisation that has been helping franchisors and franchisees create profitable partnerships for 24 years
BUSINESS BLINDNESS Business blindness is a common affliction. It occurs when we stop seeing what’s right in front of us for what it really is. The peeling paint on the wall, the out of date flyer, the rip in our uniform, the dusty shelves. And the more subtle things like changes in our attitude, a slipping of standards or the way we speak to some people. The dangerous result of this kind of blindness is while we may stop
seeing it, our customers [especially new ones] won’t. And those changes in attitude, however subtle, will be noticed by our teams and reacted to. Taking a few lessons from my game experience, how do we avoid blindness and see what is really there?
OPEN YOUR EYES • Fresh eyes, ask for input those around you. Your customers, staff, a group of trusted advisors can all provide timely and insightful feedback if you create the way for them to do it. • Stay hyper vigilant to any changes however subtle in your business and your environment. Customers stop buying a particular product, your traffic flow changes, your phone hasn’t rung… create a ‘catch it quick’ culture with your team and reward them for identifying any shifts that may effect your business. • The natural born enemy of business blindness is cold hard facts. Using the tools your franchisor gives you provides an impartial assessment of what’s really going on. • Take regular breaks to get some perspective and recharge your batteries. Even a few hours out to clear your mind can be incredibly beneficial. • Do business visits with fellow franchisees and critique each other’s operations. It’s a given the game will change, the rocks move, the flying monkeys come from different directions and power sources alter. To keep winning the game we need to stay vigilant. F
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Image: ratch0013 - Thinkstock
I
developed a little problem a few weeks ago. I became completely obsessed with an online game. I won’t name it, but it involves running around collecting things, being chased by flying monkeys. My obsession started with a perplexing situation. After I’d been playing the game for a few weeks, I noticed I was getting my best scores on my first game and then getting progressively worse scores every time I played. Maybe because I was getting fatigued, my fingers tired, the game got harder every time I played? I kept plugging away at it but would never beat the first score, no matter how long I played or how hard I tried. I finally parked my frustration and my inner scientist kicked into action. After careful observation, I worked out the problem. I had assumed the game layout was the same every time I played, when in fact every game was different. The terrain changed subtly. A rock moved, a branch got lower, a power source in a slightly different spot. I hadn’t noticed the changes because I expected the same layout every time I played. It wasn’t until I approached every game as a new game that I nailed it. (And level 10 victor oh yeah!)
Plan your success. Design your lifestyle. A Kwik Kopy franchise lets you experience the best of both worlds, financial success and quality of life. Kwik Kopy offers graphic design, printing and marketing services to the business sector. Be part of a creative process that delivers: • Marketing brochure design and production • Branding and logo development • Direct mail campaigns • Email marketing and website development, to name but a few. Kwik Kopy franchisees handle a broad range of jobs every day, in fact that’s what makes a Kwik Kopy franchise so exciting. But you DON’T require any print or design experience to take on a Kwik Kopy franchise.
With Kwik Kopy you get a tried and tested system that removes the usual start up headaches and helps you establish your business sooner. As part of the Kwik Kopy network, you tap into a highly established and recognised brand, giving you plenty of leverage in the market. What’s more you’ll have an extensive support network all focused on your success.
For more information about our award winning franchise model call 1800 251 680 or visit kwikkopy.com.au/franchise to view Kwik Kopy franchise videos and download a franchise information kit.
Why choose Kwik Kopy: • Brand strength and ongoing marketing solutions • Area sales support • IT support • B2B model • Sales focus • Regular working hours Mon-Fri • Comprehensive training • Award winning franchise model
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Opinion VIEWPOINT | IN MY SECTOR...
What I have learned about franchising
H
LORELLE FRAZER Lorelle Frazer is co-author of the Franchising Australia surveys; she lectures in franchising and is a member of the Australian Competition and Consumer Commission (ACCC) Franchising Consultative Panel
aving researched the franchise sector for almost two decades, I’ve seen the Australian sector mature. When I completed the first Australian PhD in franchising in 1998 there were only around 700 franchises operating in the country. Today, according to the latest Franchising Australia biennial research, conducted in 2012 by Griffith University’s Asia-Pacific Centre for Franchising Excellence, the Australian franchise sector is now home to nearly 1200 franchises and more than 70,000 franchise units. Franchising research and knowledge has also increased significantly and with it, the evolution of best practice. Probably the greatest insight I’ve had in the last few years from my research relates to the role of conflict in the franchise relationship.
ROLE OF FRANCHISE CONFLICT Research reveals that franchisor-franchisee conflict is not only inevitable, buy actually a necessary part of a dynamic business relationship. In fact, some conflict can actually be healthy for the relationship as it may provide the impetus for positive change. Sometimes franchisee suggestions may improve operations. Regardless, it is healthy to have and encourage open debate. It is equally important to note, that while some conflict can be positive, it is not always so and franchisors and franchisees need to take steps to minimise conflict. This includes open and timely sharing of information throughout the franchise relationship and good two-way communication. And according to the Centre research the steps to minimising conflict actually start before the Franchise Agreement is signed. The research reveals one of the major causes of franchise conflict is a lack of due diligence by franchisees before buying a franchise, which leads to unrealistic expectations. Common areas for mis-matched expectations often relate to profit potential and the quality and extent of franchisor-provided services. Further, the more inexperienced or under-resourced a franchisee is the less business advice they generally seek before signing a franchise agreement. This creates a situation where a franchisee lacks understanding of the franchise relationship, its limitations, requirements, financial returns and risks. As a result these franchisees are likely to have
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limited performance, a lack of commitment, a poor relationship with their franchisor and higher levels of non-compliance – all of which create conflict.
MINIMISING FRANCHISE CONFLICT To minimise franchise conflict franchisors need to work with prospective franchisees to clarify the expectations of both parties before the franchise agreement is signed. Research reveals people who complete the Centre’s free Pre-Entry Franchise Education Program enter franchising with much more realistic expectations resulting in higher satisfaction levels, and a greater appreciation of factors that influence their franchise unit’s performance. So although franchise conflict may be unavoidable there are still steps franchisors and franchisees can take to minimise and effectively manage conflict, and education performs an important role in this process. Fortunately, a number of franchisors are already incorporating the pre-entry franchise education program into their franchisee recruitment processes, and based on the latest research findings the Centre is also working to further enhance the pre-entry program. Looking back over the last 20 years I’m pleased at how far franchising has come and am looking forward to watching and conducting further research as the franchise sector continues to evolve. F
One of the causes of franchise conflict is a lack of due diligence by franchisees
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Glossary HELP GUIDE | KEY TERMS
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: a thorough examination of the franchise business before purchase. 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. Franchise agreement: the business contract between the franchisor and franchisee. Franchisee: an individual who runs the franchised business using the intellectual property of the franchisor. Franchise fee: this is an up-front cost paid to the franchisor and covers the use of the brand name and operating system required to operate the business. Franchisor: grants permission to the franchisee to conduct business using its intellectual property; brand name, methods of operation and marketing. Franchise term: this 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. Greenfield site: a brand new site.
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License: the right to use 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. Local area marketing: [LAM] this is marketing the franchisee is responsible for conducting in the franchise territory or designated marketing area. Marketing and advertising levy: a regular flat or percentage based fee paid into a centralised advertising or marketing fund. Master franchisee: a franchisee who is responsible for a large territory, appointing other franchisees within the territory with direct agreements, and ensuring that the franchisorâ&#x20AC;&#x2122;s systems and methods are applied. Multi-unit franchisee: a franchisee granted the rights to operate more than one franchise outlet. Not every franchise system allows for franchisees to be multiple operators. Operations manual: the franchiseeâ&#x20AC;&#x2122;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. 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 and there is no automatic right of renewal.
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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. The Franchising Code of Conduct: a mandatory Code that governs franchising in Australia and 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). 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.
Checklist TO DO LIST | HELP GUIDE
20 things to check before you invest Before you purchase your franchise you need to tick off all the must-do items. Check the following: 1. Are you confident in the franchisor
11. What are the franchisee and franchisor obligations?
2. Have you seen a disclosure document?
12. What training is available and who pays for it?
3. Have you evaluated the financial returns?
13. Who owns the intellectual property and what is licensed to the franchisee?
4. Do you know all the expenses franchisees are required to pay?
14. What marketing will the franchisor implement?
5. Have you worked out your operating costs?
15. Who pays for the marketing?
6. Do you know the term of the agreement?
16. What is the dispute resolution process?
7. Is the business operating from fixed or mobile premises?
17. Do you know what it is like to be a franchisee?
8. Are you working within a territory? If so, is the area exclusive?
18. Can you assign the franchised business?
9. Are you restricted in your product purchase?
19. How can the franchisor or franchisee terminate the Franchise Agreement?
10. Are you required to reach a minimum performance level?
20. What restrictions are there on the franchisee and guarantor operating a similar business? Pa ge
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A-Z listings
Searching for a particular franchise? Use this showcase of franchise systems to find out some key details about the business opportunities available, all in alphabetical order for easy referencing
ONLINE DIRECTORY
Phone: +61 439 222 422 (AUS) +64 21 917 148 (NZ) Contact: Glenn Dobson Email: glenn.dobson@tadda.com.au Website: www.tadda.com.au
Phone: 0432 455 444 Contact: Robert Hueston Email: bossdog@5dogs.com.au Website: www.5dogs.com.au Start up costs from: $150,000 - $250,000
Start up costs from: $125,000
PROFILE: The Fast Food Revolution! 5 Dogs are offering an exciting business opportunity for motivated and food loving individuals with all the training, tools, marketing and support necessary to run a successful franchise. 5 Dogs uses local and Australian made products. Our 5 Dogs gourmet hotdogs are full of flavour, incorporating fresh ingredients and great quality meat. There are vegan options available as well as the gluten and dairy intolerant being catered for. With this high quality product and our brand culture, 5 Dogs has hit cult status as we see with our regulars, interstate regulars and international regulars. With low running costs, a 5 Dogs franchise can operate in small or large areas. No experience necessary. All we require is a love of food, joyous customer service and passion for Hot Dogs!
PROFILE: The Australian Drug Detection Agency (ADDA) is rapidly establishing itself as the largest and most dominant provider of workplace drug detection services in Australia & New Zealand, with a fast growing list of major corporate clients. With workplace drug screening becoming a necessity for most businesses for safety, legal and productivity reasons, the opportunities are endless to win contracts with Local, State and National businesses. You will also benefit from State Office support and large-scale clients that need services in your area. ADDA wants highly motivated and business oriented individuals to join the team to share in the success of this proven business model. If you are seeking a next generation business opportunity with huge potential then contact us now to find out more.
Phone: 1300 287 669 Fax: 1300 795 287 Contact: Steve Wren Email: steve@ats.com.au Website: www.appliancetaggingservices.com.au
Phone: 08 9306 5588 Fax: 08 9306 5522 Contact: Lloyd Gaunt Email: lloyd@aussieoutdoor.com.au Website: www.aussieoutdoor.com.au
Start up costs from: $47,000 + GST
Start up costs from: $220,000 - $240,000
PROFILE: Looking for a franchise with on-going repeat business, large territories and access to an existing client base to get you started?
PROFILE: Established in 2004, Aussie Outdoor has become the biggest and the best outdoor blind franchise with 14 outlets and a goal of 20 by 2015.
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 39 franchisees grow profitable and successful businesses.
Offering exclusive patented products to the market Aussie Outdoor franchisee’s and team members pride themselves on providing quality products and services with honesty and integrity at all times.
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.
Becoming an Aussie Outdoor franchisee is enjoyable and financially rewarding. No experience is necessary as full training and ongoing support is provided. Your business will be fully systemised making it easy for you and others to operate. Aussie Outdoor is not just a franchise it is a lifestyle
Phone: 03 8878 1111 Fax: 03 8878 1145 Contact: Neville Bruns Email: neville.bruns@automotivebrands.com.au Website: www.autobarn.com.au
Phone: (07) 3860 6716 Contact: Roger Mussalli Email: franchise@palmoasisventures.com Website: www.baskinrobbins.com.au Start up costs from: $190,000
Start up costs from: $350,000 - $450,000 + stock PROFILE: Established in 1985, Autobarn has a network of 104 stores Nationwide which makes it the largest independently owned automotive parts and accessories retailer in Australia. The business has an enviable track record of success and growth with some stores in the group having traded for over 20 years. The longevity of the business, combined with consistent, high quality marketing activity, means that the brand has become iconic in the Australian market and enjoys enormous consumer goodwill and recognition. Autobarn represents the retail consumer brand within the Automotive Brands Group (ABG), which also includes the trade based Autopro and Carparts groups. Combined ABG represents over 250 outlets, giving ABG considerable buying power, the ability to have ABG exclusive products, substantial management resources and significant marketing and advertising strength.
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PROFILE: When you step into a Baskin Robbins you feel it. Ice cream is about much more than refreshment. Some people are content to enjoy a taste now and then, but others aspire to more. They want the sense of quality and community to last and desire to share it with others. If that’s you, read on. For over 67 years Baskin Robbins has been creating irresistible treats to make you smile and feel good inside and out. 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 continue to be the world’s leading chain of ice cream speciality parlours. If you love to have fun and put a smile on people’s faces, you are in touch with your “ice cream side”, Baskin Robbins may be a perfect fit for you.
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A-Z listings
To be part of the A-Z listings: Contact David Strong: E: david.strong@cirrusmedia.com.au P: 02 8484 0905 M: 0411 366 656
Phone: 07 3373 1760 Fax: 07 3373 1770 Contact: Delena Farmer Email: admin@batteryworld.com.au Website: www.batteryworld.com.au/franchising
Phone: 1300 131 664 Fax: 02 9450 2844 Contact: Diana Wilson - Franchise Manager Email: dwilson@bebrite.com.au Website: www.bebrite.com.au
Start up costs from: $250,000 + GST
Start up costs from: $17,150
PROFILE: Australia’s leading battery retailer Battery World is offering qualified individuals a unique retail opportunity with a great growth potential. Battery World stores carry batteries for everything from mobile phones and laptops to vehicles and boats. With 80 stores throughout Australia we are the largest and most comprehensive retail franchise network focused on the battery category. If you want to invest your time and money in a powerful franchise, Battery World offers a unique opportunity to top into an every-growing market. A select number of franchises are currently available throughout Australia for motivated individuals with strong communication skills and a background in customer service.
PROFILE: Bebrite presents an opportunity to enter into a Residential/Commercial and Carpet cleaning franchise at a low entry. With 17 years experience in the business, Bebrite provides the perfect business model for success. A Bebrite franchise suits couples or single operators with unique advantages, including generous guaranteed incomes, flat monthly fees (no royalty), no territory restrictions, high level of demand for service, prominent Internet presence and an opportunity for continued growth. Bebrite operates in NSW, ACT and QLD. Expanding nationally into WA and VIC. By providing a high quality service, Bebrite franchisees enjoy a loyal and stable customer base. Three (3) unique websites, continued support, sophisticated marketing and efficient business systems assist franchisees to achieve success.
Phone: 1800 634 227 / 02 8001 6558 Contact: Andrew or Jane Email: info@briantracytraining.com.au Website: www.briantracytraining.com.au
Phone: +65 6222 9443 Fax: +65 6222 5773 Contact: Dennis Delaney Email: anz.franchise@brotzeit.co Website: www.brotzeit.co
Start up costs from: $79950 + GST Includes inventory for fast ROI.
Start up costs from: US$650,000
PROFILE: This business model is “Franchising with a Twist”. You will enjoy brand recognition, corporate clients for reference, world-class training programs, multiple revenue channels, all marketing and sales tools, plus world class coaching--but be able to put your own stamp on your business! With world class systems and processes which are well researched and established, this franchise model demonstrates a market-leading level of sophistication.
PROFILE: Brotzeit® is a typical Bavarian expression - “Brot” being German for bread and “Zeit” for time, referring to a cosy meal complemented by fresh beer. Brotzeit® is the world’s leading franchised German concept casual dining restaurant, serving authentic German cuisine and premium quality beer imported directly from Munich, in a chic and modern environment. With an expanding regional presence in Singapore, Malaysia, Vietnam, Philippines, Thailand, Hong Kong and China, the company is looking for interested area franchise partners for Australia.
Phone: 02 9451 3260 OR 1300 CAFE2U Fax: 02 9451 2105 Contact: John Stanton Email: franchises@cafe2u.com.au Website: www.cafe2u.com
Phone: 02 9723 1011 Fax: 02 9727 6771 Contact: Nick Avgerinos Email: franchise@cheesecake.com.au Website: www.cheesecake.com.au
Start up costs from: $129,990 + GST
Start up costs from: $150,000 - $700,000
PROFILE: Australian owned Cafe2U is the world’s largest mobile coffee company with over 150 franchises in Australia and 200+ worldwide. The business is rapidly expanding due to a simple and proven business model. Cafe2U now includes the unique “Acceleration Package”, designed to create success and profitability sooner. This includes a four week training programme, a personal franchisee coach, revenue guarantee and an initial marketing campaign. Offering a full time events coordinator and strong marketing support, Cafe2U offers a great opportunity for new business owners who are looking to make the most of the added lifestyle benefits. Contact Cafe2U now should you wish to make the change.
PROFILE: The Cheesecake Shop opened in 1991 and has developed into an Australian favourite with a massive network of almost 200 stores across Australasia. Our award winning system makes for one of the simplest businesses to operate. Our systems guide you on how many cakes you need to produce each week and how much of each ingredient to order. Our cakes are baked from easy to follow recipes. You don’t need to be a chef or a baker, its so easy! If you love to bake cakes for the kids then here is your chance to turn your passion into profit.
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A-Z listings Phone: +61 459 360 867 / +61 422 077 006 Contact: Remo Stander / Melinda Heron Email: franchising@cravefroyo.com.au / melinda@cravefroyo.com.au Website: www.cravefroyo.com.au/franchising
Phone: 0499 399 355 Contact: Bruce Miskin Email: bruce@theconcretecutter.com.au Website: www.theconcretecutter.com.au Start up costs from: $45,000 + GST + vehicle
Start up costs from: Below $249,000 PROFILE: Established in Melbourne in 2001, The Concrete Cutter has nine long running franchises. We now seek to expand in Melbourne and duplicate the Melbourne success interstate. We invite enquiry from smart ‘hands on people’ in good health who are easily understood on the telephone. Most established franchisees regularly take over $2,500 p.w. The price includes equipment, sign writting, uniforms, stationery, training, and on-going support. You will need to provide a white vehicle such as a one-tonner, van or small truck. A second-hand vehicle is O.K. Please ring for information pack.
PROFILE: The Frozen Yogurt boom is well underway and CRAVE frozen yogurt is one of the fastest growing franchises of it’s kind in the world - Don’t miss this opportunity! • Complete Turn-Key Investment, saving you Time and Money • The Lowest Franchise Fee on the market (6%) • Compact, Intelligent Design that can fit anywhere. • Brilliant colour scheme and branding that people remember - What Do You Crave? • Exclusive rights to the Elvaria 7-Handle Machine, so you get 3 times the flavours your competitors have in the same sized footprint. • Self-Serve Business model which means lower overheads and simpler operations. • Premium, Healthy, Creamy Italian Frozen Yogurt. Nobody can match Crave. Find out why Crave has grown from 0 to 10 sites in under 10wks.
Phone: 1300 131 888 Fax: 07 3633 3399 Contact: Franchise recruitment Website: www.dominos.com.au/franchising
Phone: 0064 3443 5133 Contact: Derek Lilly Email: del@dreamdoors.co.nz Website: www.dreamdoorskitchens.com
Start up costs from: $100,000
Start up costs from: $50,000 - $350,000 + GST + operating capital
PROFILE: At Domino’s we see ourselves as the Pizza Experts, and focus all our energy and passion into making and delivering the hottest, freshest and tastiest pizzas. As a New Franchisee, you are about to embark on a journey to become a Pizza Professional.
PROFILE: Dream Doors is different from other kitchen, bathroom and bedroom renovation companies. By simply replacing the doors, drawer fronts and benchtops we save the customers $1000’s on their renovation and there in lies the secret to our universal success.
We are the market leaders in most neighbourhoods and we need to continue to rise to the occasion of exceeding our customers expectations.
We will give you our 14 years worth of combined knowledge and run the Master Franchise territory together with you. It really doesn’t get any better than this in our opinion.
If you think you’ve got what it takes, contact us today for more details about becoming part our family.
Working together is crucial to any new undertaking in the business arena. Working with the company co-founder to set up and develop your Master Franchise Territory will be a major advantage to the growth of your business. Long term this relationship will flourish because it is absolutely in the interest of both parties to make this business work together. Our joint incomes depend on it.
Phone: 1300 FASTWAY Fax: 02 9264 4966 Website: fastway.com.au
Phone: 02 9969 2154 Fax: 02 9960 1041 Contact: Gary Blyton Email: info@extremepita.com.au Website: www.extremepita.com.au
Start up costs from: $25,000
Start up costs from: $250,000 - $350,000 PROFILE: So you want to be a Purveyor of the Pita? Well, you’ve come to the right place. You can rest easy knowing this is a business with staying power. It’s all about the bread! We roll it, we eat it, we earn it. And we’re successful at it. We’ve got over 225 locations throughout Canada and the U.S. with continuous strong growth. Why Extreme Pita? A lot of restaurants out there offer items that are fried within an inch of their lives. Extreme Pita has the right concept at the right time, because more and more consumers are looking for a fresh, fast, healthy alternative. Extreme Pita offers a fantastic range of healthy great tasting food for busy, active individuals and families who want to live life to the fullest.
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PROFILE: Run your own rewarding business and take control of your future as a Fastway Courier Franchisee. As a market leader in nationwide courier services, our multi-award winning franchisees enjoy: • Guaranteed income package* • Low start up costs • No weekend work • Ongoing business support & training • Exclusive territories • Perpetual franchise agreement with no ongoing fees No prior business experience is needed, just a great attitude and an ability to talk to people. So, if you’re ready for a positive change, we’d love to hear from you. *Conditions apply
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A-Z listings Phone: 1300 FRANCHISE Fax: 03 8640 0688 Contact: Kevin Bugeja Email: kevin@franchiseselection.com.au Website: www.franchiseselection.com.au
Phone: 0421603342 Contact: David Green Email: david@fivehighvending.com.au Website: www.fivehighvending.com.au Start up costs from: $30,000 - $100,000 PROFILE: FiveHigh Vending will source locations for you, provide access to the best buying group in the Industry, and provide you with ongoing technical and business support. With 18 years experience in the Industry FiveHigh Vending Systems is Australia’s largest vending company and works closely with approximately 600 full and part time operators across Australia. Source products from major suppliers such as Schweppes, Coke, Smiths, Snack Brands, Nippys, Frucor and a host of others or tap into our overseas buying group to get the best profit margins in the industry.
PROFILE: Franchise Selection is the leading franchisee recruitment company in Australia that assists potential franchisees through the interview and selection process. We offer potential franchisees a wide selection of franchises covering all industries including retail, food, automotive, telecommunications, construction and even service franchises. We pride ourselves in being leaders in our industry and our approach is not to sell franchises but to educate and assist buyers in finding the right business opportunity for them and to assist franchisors in selecting the very best franchisees.
Phone: 08 8338 2557 Fax: 08 8338 4552 Contact: Mark Langford Email: marklangford@gametraders.com.au Website: www.gametraders.com.au
Phone:02 028845 88450100 0100 Phone: Fax:02 028845 88450199 0199 Fax: Contact:Karen KarenPollard Pollard Contact: Email:franchise@gelatissimo.com.au franchise@gelatissimo.com.au Email: Website:www.gelatissimo.com.au www.gelatissimo.com.au Website:
Start up costs from: $225,000 + GST
Start Startup upcosts costsfrom: from:$350,000 $350,000
PROFILE: Gametraders Live is a retail and entertainment destination consisting of our unique retail business model combined with other activities such as Card tournaments, Warhammer and Cosplay. Gametraders Live caters for franchisees and customers who love buying selling and trading but also enjoy being involved in events and activities. We are extremely proud to announce our new concept franchise stores Gametraders Live. Gametraders Live is best described as a gamers and cosplayers paradise, They are big and there will be plenty of activities and things to do. There are Sofa’s for our guests to relax and interact, snacks, coffee, drinks, activities, events, film nights and much more.
PROFILE: PROFILE: Australia’s looking afor outstanding franchisees. Australia’sleading largest gelato franchise is presents unique concept; with over 20 years Gelatissimo, Australia’sisleading gelato franchise is expanding itspassion strong of product development, customer satisfaction and a brand that embodies style Prior food experience not necessary however system franchisees must have brand and is looking for outstanding and sophistication. Our retailing pointfranchise of difference is makingforfulldelivering flavouredquality gelato for the system and brand, leadership skills, andpartners. enthusiasm fresh in-store daily usinggelato a customer system that isfresh simple to run. has an enviable products through excellent service. Our multi award winning is made in store byGelatissimo dedicated Franchisee performance record, with an average store and turnover of $779,000* and recipes. comparative Gelato Artisans, using the finest ingredients authentic Italian family Multi award winning Gelatissimo provides full training and on-going support from store sales growth has averaged a positive 8.29%* over the last two years. dedicated operational, and development them to to Gelatissimo franchiseesmarketing have the benefit of a systemteams that isenabling simple and easy As part of its commitment Gelatissimo charges flat royalty fee produce artisan gelato freshtoinfranchisees, store using a simple proven asystem. run, supported by full training, ongoing support fromand professional operational and instead of teams, a percentage of sales, full training, ongoing support from its marketing extensive brandprovides building activities, product development and operationswith and local marketing team, brand building and local store marketing. assistance store marketing. *Sales figures based on the last 12 months turnover as at April 2012 inc GST. Increases based on comparative moving annual turnover for the last 48 months.
Phone: 08 9209 2669 Fax: 08 9209 3308 Contact: Justin Everley Email: justin@greenplanetgrass.com.au Website: www.gpgfranchise.com.au
Phone: 07 5515 0119 Fax: 07 5500 3716 Contact: Geoff Biddle Email: mail@groutpro.com.au Website: www.groutpro.com.au
Start up costs from: $275,000 - $320,000
Start up costs from: $29,950 + GST & vehicle
PROFILE: Green Planet Grass is a specialist synthetic grass company servicing residential and commercial customers throughout Australia.
PROFILE: Earn between $50 and $200 per hour and get a high return on investment in the booming Home Improvement Industry with LOW SETUP COSTS & little competition.
The company has grown its customer base to more than 4000 in Western Australia alone. Timing is now perfect to offer this well-established and proven business to people seeking a unique and growing product offer.
GroutPro specialises in the after-market care of tiles and grout to homeowners and businesses. Offering a range of professional services from stain protection of new tile and grout installations to our flagship grout “colourseal” application which rejuvenates and re-colours old grout saving customers time and money without having to re-tile.
With full training provided, a Green Planet Grass franchise is the perfect opportunity for those looking to build a business, capitalise on an established brand and be a part of servicing a rapidly increasing number of customers.
Specialists use GroutPro’s own branded range of professional quality products including cleaners, sealers, tile Anti-Slip treatments and shower glass restoration and sealer coatings. This is a complete package to get you up and running in your own business fast. Call us today for more information.
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A-Z listings Phone: 1300 424 746 Fax: 03 9234 2266 Contact: Peter Fiasco Email: franchising@hairhousewarehouse.com.au Website: www.hairhousewarehouse.com.au/franchanising
Phone: 0427 208462 Contact: Steve Potter Email: franchising@indianbrothers.com.au Website: www.indianbrothers.com.au Start up costs from: $160,000
Start up costs from: $250,000 - $550,000 PROFILE: Hairhouse Warehouse is Australia’s leader in the hair and beauty industry, with over 140 stores across Australia. A belief in your ability to change your life and courage to do it is all you need. Our culture and business has developed from over 21 years of success and mastery. Hairhouse Warehouse is built on passion and creativity. • Extensive and ongoing training programs • A proven turnkey operation • A focus on world class service • Multiple revenue streams, including retail, salon, piercing and beauty services • Exclusive stockists of world leading brands with the most lucrative merchandise trading terms worldwide
PROFILE: Indian Brothers restaurants began in 2002 with a simple philosophy – to bring the authentic taste of North India to Australia. Our first restaurant became a local institution in Queensland, offering tasty meals cooked to perfection. Using the freshest ingredients, traditional spices and only genuine Tandoor ovens enabled us to offer an Indian experience like few others. Today, Indian Brothers Restaurants provide opportunities for motivated individuals to own and operate their own Indian take away food business. Our unique system has been designed from the ground up to meet the increasing demand from time poor customers who are looking for instant, value for money, fresh and tasty food.
Phone: (AUS) 02 8522 1408 Fax: (AUS) 02 9527 5144 Contact: Luke Manning Email: bdm@justcuts.com Website: www.justcuts.com
Phone: 131 546 Email: franchise.sales@jimsfencing.net Website: www.jimsfencing.net Start up costs from: approx $64,000 - $66,000 inc equipment
PROFILE: Jim’s Fencing operates Australia wide with currently 160 plus franchise owners and sub-contractors building fences everyday. Jim’s Fencing has such a huge demand for work in fact; Jim’s Fencing is at a point in which they are actually reluctant to advertise the services as they have to many leads to fill as it is and not enough franchise owners on the ground to do the work. Can you imagine? A business that has too much work available? If you yearn to work outdoors and are handy with the tools, then Jim’s Fencing could be for you. Franchises available Australia wide.
Start up costs from: $160,000 to $240,000 ProFilE: Don’t just buy yourself a Job! Discover how you can easily run a “Genuine Business System”. Did You Know? Most of our Just Cuts™ Franchise Owners are not Hairdressers. Plus, the average Franchise Owner goes on to own multiple stores. Why? Because proven systems, support and training means your hairdressers become the technicians and easily run the business for you. At Just Cuts™ Franchise Owners have been free to grow to own multiple sites. Just Cuts™ do over 66,000 Style Cuts™ cuts a week! Just Cuts™ operate on a no appointment, no request system, quality Styles Cuts™ cut at an affordable price. Contact us today to find out how. Join the largest Hairdressing Franchise in the Southern Hemisphere.
Phone: 1800 251 680 Fax: 02 9967 5511 Contact: John Post Email: franchise@kwikkopy.com.au Website: www.kwikkopy.com.au/franchise
Phone: 02 9930 3183 Contact: Amanda Glossop Email: au-kfc.franchising@yum.com Website: www.kfc.com.au Start up costs from: $1,000,000 in equity
Start up costs from: $210,000 PROFILE: KFC is the leading global chicken franchise with over 15,000 restaurants worldwide and is part of the quick service restaurant giant Yum! Restaurants International. KFC Australia opened its first store in 1968 and now has over 615 stores. Our Franchisees have over 40 years history of contributing their talent, commitment, and passion to building our brands, strengthening the system, and enjoying the satisfaction and rewards that come from being a part of a winning team. We have limited existing store opportunities for new franchisees to join the brand and open new stores in ACT, NW Sydney and WA.
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PROFILE: A Kwik Kopy franchise is your path to a successful new business. And what’s more, you don’t require any print experience to take on a Centre. Kwik Kopy is a B2B print and design provider, focusing on the small to medium business market. A highly established and recognised brand, Kwik Kopy has been operating in Australia for over 25 years and has an extensive network of Centres in regional and metropolitan locations Australia wide. The benefits of becoming a Kwik Kopy franchisee include: • Award winning franchise model • Strong brand and ongoing marketing solutions • Regular working hours Mon-Fri • Extensive training and on-site assistance
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A-Z listings Phone: 0413 805 728 Contact: Matthew Shaw Email: franchise@mixandgofroyo.com.au Website: www.frozenyogurtfranchises.com.au
Phone: +61 2 9922 5522 / +61 433 102 005 Contact: Brian Pretorius Email: brianp@launchpadfce.com.au Website: www.launchpadfce.com.au
Start up costs from: $124,000-$350,000
PROFILE: The Launch Pad is the only Conference planning and events specialist company to work exclusively in the Franchising sector. We know that you, the Franchisor, have a big commitment to your Franchisees and hosting Conferences and Events make an unhealthy dent into your bottom line.
PROFILE: With the frozen yogurt industry continuing to feed the obsession of self-serve froyo to the world and showing no sign of nearing its freezing point, Mix&Go Froyo are now offering frozen yogurt franchise opportunities across Australia.
Allow our experienced Franchise Conferencing and Events Team to show you how to make your next event sizzle while we help you to balance these costs.
One of Australia’s first frozen yogurt stores, Mix&Go FroYo, welcomes the idea of more restaurants to share their innovative variety of flavours and toppings and to continue providing delicious yet diet-friendly treats to their consumers.
Call us for a introductory and no obligation chat.
Low start-up costs, easy to manage and good margins!
Phone: 1300 737 917 / 0403 840 996 Contact: Steve Bianchini Email: steve@mondodirect.com.au Website: www.mondodirect.com.au
Phone: +61 3 8540 0200 Fax: +61 3 8540 0202 Contact: John Sier Email: john.sier@mst.com.au Website: www.mst.com.au
PROFILE: The Destination for the Best Hidden Franchise Talent. Mondo Direct is a specialist in providing executive search and headhunt services to franchise companies. We support franchise companies in achieving success through their people building robust talent teams. Our enduring relationships with the top passive talent in the APAC region, means you will gain a competitive advantage.
PROFILE: MST Lawyers is widely recognised as one of Australia’s leading franchising law firms, advising participants in the franchising sector, Australia wide, on all aspects of franchising. We assist franchisors with their franchise strategy and structures, including drafting franchise documentation and managing franchise transactions. We also advise franchisors on Franchising Code of Conduct compliance, consumer law compliance, leasing, intellectual property and dispute resolution. MST Lawyers also act for franchisees providing advice in respect of sales and purchases of franchise businesses, including advising on franchise documents and leases. Our international affiliations allow us to stay in touch with global franchising trends and assist our clients with their international expansion strategies. Our dedicated Franchise Team prides itself on providing cost effective, practical and current advice to its franchise clients.
Phone: 03 8851 4200 Fax: 03 8851 427 Contact: Michael Standley Email: franchise@noodlebox.com.au Website: noodlebox.com.au/franchise
Phone: (08) 9201 3400 Fax: (08) 9201 3444 Contact: Brad Dixon Email: info@mynfib.com.au Website: http://mynfib.com.au
Start up costs from: $250,000 - $280,000 PROFILE: National Franchise Insurance Brokers has been created to meet the Australian demand for a dedicated online provider of insurance cover for franchisees, franchisors and franchised businesses.
PROFILE: An Australian success story.
Our service is fully automated, compliant and provides you with full documentation. Plus, we are underwritten by one of world’s longest established insurance organisations.
Franchise partner relationships are paramount and are built on integrity, respect and trust. The Noodle Box Franchise Support Centre is focused on ongoing Franchise Partner profitability and success.
Put simply, our service is the fastest, most affordable way to get the most appropriate level of cover you need to protect your business.
With a competitive entry level investment and new restaurant design concept, the Noodle Box brand represents excellent value for money.
Noodle Box’s goal is to be the first choice noodle-based restaurant concept in every market in which they operate.
Noodle Box is healthy, fresh and fast and made right in front of guests by friendly, welltrained team members. With a relaxed atmosphere – it doesn’t get tastier than that!
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A-Z listings Phone: 1300 699 955 Contact: Ken Patterson Email: info@ozzykleen.com.au Website: www.ozzykleen.com.au
Phone: 1888 883 1004 Fax: 1800 871 8602 Contact: Paul Lewis Email: Plewis@orangeleafyogurt.com Website: www.orangeleafyogurt.com.au
Start up costs from: $5,800 + GST Start up costs from: $250,000 - $400,000 PROFILE: Orange Leaf Frozen Yogurt is a self-serve, choose-your-own-toppings frozen dessert franchise with more than 300 locations in the U.S. and Australia. Ranked one of the fastest growing limited service chains by Technomic and as one of the top three new franchises for 2013 by Entrepreneur, Orange Leaf’s profranchisee culture encourages owners to become a part of their communities and provides them with the necessary ingredients for success. Orange Leaf offers a multitude of delicious, traditional and original flavors, including no-sugar-added, gluten-free and dairy-free alternatives. Customized with a generous selection of do-it-yourself toppings, Orange Leaf provides an innocent indulgence, self-served in a stimulating atmosphere.
PROFILE: At Ozzy Kleen we believe that going into your own business should be as easy as possible with a minimum outlay. Why should you pay $20,000 - $40,000 for a franchise, when we can get you started from $5,800 + GST and this also includes all backup and support, training, equipment, manuals as well as uniforms, business cards, invoice books etc. We even help with your initial customers. NOW THAT IS A GOOD DEAL!!! So before you make a decision to go into that expensive franchise give us a call. We have opportunities in Home and Office Cleaning as well as Lawn and Garden. We are also looking for Regional Masters these territories start from $16,000 + GST. So what are you waiting for? Give us a call and take control of your new business. Areas available include Sydney, Brisbane, Melbourne, Gold Coast & Newcastle.
Phone: 02 9822 5622 / 0423 052 456 Fax: 02 9822 5677 Contact: Kate Bird Email: franchise@packsend.com.au Website: www.packsend.com.au Start up costs from: $154,450 - $166,900 + working capital (ex GST) PROFILE: PACK & SEND is an award winning Retail Service Centre operation providing convenient freight and packaging services to businesses and consumers wanting to send anything, anywhere - plus, we offer online freight solutions for pre-packed parcels! Utilising our proprietary freight management technology (GlobalMaster™) to perform the delivery solution, together with our expertise in packaging services, means you can offer a solution for any person or business. Established for 20 years with a network of over 100 Australian stores – along with international stores in New Zealand and the United Kingdom – there is no other franchise system like PACK & SEND in the world and, best of all, our franchisees receive assistance and support along the way.
Phone: 07 5591 3242 Fax: 07 5591 9021 Contact: Damien Davies Email: rfg@rfg.com.au Website: ww.pizzacapers.com.au
PROFILE: One of the first pizza makers to deliver great value, high quality gourmet pizza to the market, Pizza Capers has grown to a network of more than 120 stores across Australia. First established in Brisbane in 1996, demand for a slice of Pizza Capers’ tasty menu has seen the franchise system attract pizza lovers across the country. It joined the RFG portfolio in 2012 in a move to ensure the brand’s continued growth and success. Stores can be positioned as high street or ‘strip’ locations or on the outside of shopping centres – seating is optional and plenty of parking is a must.
Phone: 07 3456 4255 Fax: 07 3456 4299 Contact: Phil Hill Email: phil.hill@tic.com.au Website: propertyclub.com.au
Phone: 02 9930 3185 Contact: Nathan Kelk Email: au-pizzahut.franchising@yum.com Website: www.pizzahut.com.au/franchise Start up costs from: $250,000-$300,000
PROFILE: Pizza Hut is the leading global pizza franchise, with over 12,000 restaurants throughout the world and is part of the quick service restaurant giant, Yum! Restaurants International. Franchising with Pizza Hut gives you the financial control of owning your own business combined with the support of a historically successful global company. With exciting new store opportunities available throughout Melbourne/Regional Victoria, Perth/Western Australia, Regional New South Wales, and South East/ Regional Queensland there has never been a better time to join.
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Start up costs from: $98,000 PROFILE: The Property Club is a division of The Investors Club. Since its establishment in 1994, The Property Club has assisted in the sale of over 17,000 properties throughout Australia and New Zealand and are looking to expand further in these markets. Property Club prides itself on providing investment opportunities and deals and a one-stop-shop to access property related services for its members. The company currently has 18 Franchises and 300 Property Mentors, as well as a head office with 40 staff specialising in all areas of Property Investment.
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A-Z listings Phone: 1300 4 REDCAT (1300 4 733 228) Fax: 03 9696 1553 Email: info@redcat.com.au Website: www.redcat.com.au
Phone: 1300 4 RED ROCK (1300 473 376) Contact: Phil Colburn Email: admin@redrocknoodlebar.com.au Website: www.redrocknoodlebar.com.au Start up costs from: $180,000
PROFILE: Red Rock Noodle Bar is one of the healthiest food franchises around in this growing fast food industry. We deliver this by offering an exciting range of Asian 97% Fat Free tastes that appeal to all. Fresh Ingredients handpicked by our customers and “wokked” up right in front of your eyes. Currently 12 stores all over Brisbane as we expand this healthy option throughout Queensland and Northern NSW.
PROFILE: RedCat provides end-to-end, point of sale, accounting and business management solutions that gives users total control of their business. RedCat supplies integrated software and hardware solutions that can manage sales, staff, stock, payroll, through to accounts, GST, customer loyalty, and web based multi-site reporting to provide a complete business management system. Franchised groups can benefit from their flexible centralised management capability that permits multiple levels of control and reporting. RedCat are also able to provide online ordering systems. Customers order and pay through a uniquely branded app, the order is then automatically integrated into the point of sale system.
Phone: 1300 810 233 Fax: 02 9887 4252 Contact: Franchise Development Team Email: fran.enq@snap.com.au Website: www.snap.com.au/franchiserecruitment-home.html
Phone: 03 8415 5810 Fax: 03 9416 0846 Contact: Kim Davies Email: kim@sanchurro.com Website: www.sanchurro.com Start up costs from: $500,000 - $700,000
Start up costs from: $200,000 PROFILE: Australia’s only authentic Chocolateria, San Churro provides its customers with a fun and indulgent sweet treat experience inspired by the Chocolaterias of Spain. With a proven model, a recognised brand, a mouthwatering menu of delicious drinks and desserts, and a spectacular store design, we are ready to spread the joy of Spanish chocolate even further. Now is an amazing time to be involved with one of Australia’s most exciting, individual and much loved franchise concepts. With 36 stores and growing, we are looking for enthusiastic franchise partners to help us make San Churro the most loved chocolate brand in Australia.
PROFILE: Snap is the most successful print, design and website franchise network for small and medium-sized enterprises (SMEs) in the Southern Hemisphere, with 145 Centres in Australia and a further 30 Centres in New Zealand, Ireland and China. Snap was founded in 1899 and is 100% Australian-owned. We’ve adapted, evolved and changed which is why we are as successful today as we were 100 years ago. We believe that’s because the foundations of the Snap brand are timeless - we always deliver outstanding service to our clients. We offer top quality print, design and website products and services and keep upto-date with the very latest trends in printing and online marketing for SMEs.
Phone: 0427 401 169 Fax: 03 9888 6327 Contact: Alistair Browne, Snooze Franchise Network Development Manager Email: alistairb@snooze.com.au Website: www.snooze.com.au
Phone: 1800 762 766 Fax: 02 9837 9199 Contact: Nick Hudson Email: nicholas.hudson@snapon.com Website: www.snapontools.com.au Start up costs from: $50,000 with financing packages available PROFILE: Snap-on Tools Australia is a mobile franchise operation putting high quality tools and equipment into the hands of mechanics, engineers and technicians across the country. Snap-on Tools is a wholly owned subsidiary of Snap-on Inc., a developer and manufacturer of innovative and technologically advanced tools who has established a network of solid franchise operations across the globe. Now after more than 20 years in the Australian market it continues to solidly perform and provide robust financial results for its network of 166 franchisees. Extensive training and ongoing support is provided – no previous mechanical experience required. Snap-on offers an exclusive finance package to assist new franchisees.
Start up costs from: $450,000 PROFILE: As one of Australia’s longest-running, most successful and innovative franchised business, Snooze’s experience in the bedding industry is second to none. Boasting more than 70 stores across Australia and a goal to reach 90 stores by 2014, Snooze is looking for ambitious and passionate people to join the business’ exciting future. Snoozes offers a personable, flexible business solution with expertise and support every step of the way, including: • Vendor finance assistance • NAB & ANZ accreditation • Sales and product training • Business management support • A national marketing program • IT services To take the first step towards a prosperous future, contact Snooze Franchise Network Development Manager, Alistair Browne, to find out what Snooze could mean for you.
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A-Z listings sparky a3.pdf 1 7/04/2011 12:22:20 PM
Phone: Toll Free Australia - 1800 630 355 New Zealand - 0800 444 618 Fax: 07 3852 4081 Contact: Franchise Administrator Email: ssa@subway.com Website: www.subway.com
Phone: NSW/ACT - 02 9250 5000 VIC/TAS - 03 9287 9555 WA/SA - 08 9430 2877 QLD/NT - 07 3877 7333 Email: franchdev@caltex.com.au Website: www.caltex.com.au
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Start up costs from: Varies by site PROFILE: • Caltex Star Mart is Australia’s number 1 convenience retailer with locations in every State and Territory across the country. • The Star Mart convenience network consists of over 630 stores nationally. • Franchisees operate approximately 85% of Caltex’s retail network. Our world class business model, merchandising and field support has set the benchmark for convenience retailing, making Caltex the number one convenience retailer throughout Australia. A select amount of Caltex Star Mart opportunities now exist for high calibre franchisees with a passion for retail and a burning desire to be successful. To discover more about Caltex’s exciting franchise opportunity, please visit www.caltex.com.au and click on ‘Franchising at Caltex’.
POOL & SPA SE RVICES
Australia’s pool & spa specialists
PROFILE: Subway® is the world’s largest restaurant chain with more locations than any other chain. We offer business owners simple operations, ongoing field support and a defined marketing structure, along with providing customers with a variety of freshly made menu options. For over 47 years, the SUBWAY® brand has been helping individuals build their own independently operated business – run by people just like you! From step one, throughout the entire franchise process, the Subway® system provides training and guidance that aids in the operation of each restaurant. Join the winning team with the #1 Franchise! Register your interest today.
Phone: 02 9898 8602 Fax: 02 9898 3089 Contact: Chris Fitzmaurice Email: chris.fitzmaurice@swimart.com.au Website: www.swimart.com.au Start up costs from: Retail Franchises – $150,000 - $300,000 Mobile Franchises – $85,000 - $90,000
PROFILE: Swimart, Australia’s pool & spa specialists, offer both retail and mobile based franchises in the pool industry. First established in 1983, Swimart has grown to be the largest chain of specialty Pool and Spa shops in both Australia and New Zealand. With over 70 retail stores and more than 250 service vehicles across both countries Swimart is a very successful retail and service business that delivers high turnover and profit margins to franchisees. We specialise in providing pool and spa owners with everything they need to maintain and enjoy their pool or spa. Swimart is a fully owned subsidiary of Waterco Ltd, a publicly listed Australian company with operations in over eight countries around the globe!
Phone: 03 9008 5945 Fax: 03 9876 6612 Contact: Richard Email: richard@thefranchiseshop.com.au Website: thefranchiseshop.com.au
PROFILE: The Franchise Shop is the leading franchise consultancy offering both franchise development & recruitment services to the franchising industry throughout Australia and New Zealand. Principals, Grant and Richard Garraway have more than 30 year’s experience between them in developing businesses into franchises, conducting feasibility studies, recruiting franchise owners, territory planning and site finding. At The Franchise Shop our aim is to grow your business. Are you thinking of developing your business? A free initial consultation will provide you with an honest, comprehensive and accurate assessment. Looking to buy a franchise? We offer an advice service and range of documents which are designed to help you make an informed decision.
Phone: 03 9413 1400 / 0429 811 811 Fax: 03 9413 1401 Contact: Adrian Gallace Email: adrian.gallace@unitedpetroleum.com.au Website: www.unitedpetroleum.com.au/ franchising/welcome
Phone: 0414 217 019 Contact: Rob Watkin Email: sales@topsnap.com Website: www.topsnap.com Start up costs from: $39,950 + GST PROFILE: Interested in real estate? Passionate or keen to learn about photography? Then a Top Snap property photography franchise could be for you! We are currently looking for positive, enthusiastic, customer-focused individuals to build their own professional photography business, with the support of an established franchise system behind them. As a leading and fast-growing property photography franchise, we have photographers located across the country servicing the real estate industry’s growing demands for professional property photography and marketing tools. In recognition of this outstanding growth, Top Snap was recognised as one of Australia’s top 50 fastest growing SMEs in both the 2012 and 2011 SmartCompany awards.
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Start up costs from: $400,000 upwards PROFILE: Australian-owned company that has become one of the largest independent fuel retailers with over 290 convenience stores throughout Australia. United Petroleum continues to invest heavily in its stores and systems which has earned the trust of consumers and respect of major competitors. United franchisees enjoy ongoing support, guaranteed minimum Fuel Commissions, merchandising support, a national promotional program, five week induction program and on-going training. United is a proud member of the Franchise Council of Australia (FCA) and was awarded Canstar winner for 3 years in a row – Most Satisfied Customers (Service Stations).
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A-Z listings Phone: 03 9612 7297 Fax: 03 9629 4035 Contact: Robert Toth Email: robert.toth@wisemah.com.au Website: www.wisewouldmahony.com.au
Phone: 13 26 13 Fax: 08 8220 4588 Email: info@viphomeservices.com Website: www.vipfranchisesales.com.au Start up costs from: $25,000
PROFILE: V.I.P. was the first company to start franchising in home services in 1979. Today V.I.P. has over 1100 franchisees across Australia and New Zealand. V.I.P. has franchise opportunities available in: • Garden Maintenance and Lawn Mowing • Home Cleaning • Commercial Cleaning V.I.P. offer franchisees comprehensive training, a solid support system, exclusive territories and an established customer base along with the chance to be their own boss and choose the hours they want to work. In 2009 & 2010 V.I.P. was declared the Best Franchise System in Australia under $50,000 by the Financial Review Smart Investor magazine.
PROFILE: Wisewould Mahony is a leading commercial law firm with a 150 year history in Victoria with clients in Australia and worldwide. 25 Years of Industry Knowledge Member Franchise Council of Australia (FCA) International Franchise Lawyers Association (IFLA) Franchise Association of New Zealand (FANZ) Accredited Business Law Employment Specialists Fixed Fee Services to Franchisors & Franchisees based on scope of services Services provided: • Legal and consulting advice to Franchisors & Franchisees • Code compliance requirements • Dispute resolution – mediation – Solutions & Strategies • Sale/Purchase of Franchise Systems • Master Franchising • Employment Law & Workplace Relations Specialist Call or email for a complimentary brochure for Franchisors & Franchisees
Phone: 0414 745 155 Contact: Paul Crabtree Email: paul@xpressodelight.com.au Website: www.xpressodelight.com.au
Phone: 1800 664 653 Contact: Scott Leydon Email: sleydon@1800onhold.com.au Website: www.zbm.com.au
Start up costs from: $64,900 + GST PROFILE: Invest in an Xpresso Delight franchise and seize the opportunity to profit from one of the fastest growing markets on the planet. As the number of savvy, educated coffee drinkers has boomed, the market has exploded!
PROFILE: Zoo Business Media is a full service provider of music, video and voice marketing solutions to the Hospitality, Retail and Fitness industries.
This pent up demand for gourmet coffee in the workplace is very poorly met.
We help you create the perfect ambience for your shops, gyms, restaurants and bars with internet delivered, license fee free music.
Each day, thousands of workers trek to the nearest café to pay as much as $4.00 for their morning and afternoon coffees.
We also enable you to make a great first impression with creative on hold messages for your telephone lines. A cost effective service absolutely essential to your marketing plan.
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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.
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Advertisers index INCORPORATING FCA NEWS
HELP GUIDE | COMPANY LIST
* indicates FCA member FRANCHISE COUNCIL OF AUSTRALIA
5 Dogs 1800 On Hold Appliance Tagging Services
44 111 113*
Gametraders
72 49*
Redcat
82*
Groutpro
55*
Red Rock Noodle Bar
20*
47*
San Churro
57
Snap-on Tools
9*
Snap Printing
96*
Snooze
69*
70
Hairhouse Warehouse
Autobarn
89
Indian Brothers
37
Jim’s Fencing
85
15*
Battery World
21
Just Cuts
Brian Tracy
67
KFC
103* 17*
Brotzeit
11*
Kwik Kopy
Cafe2U
39*
Launch Pad
33
Caltex
4*
Mason Sier Turnbull
87
Mix and Go Froyo
84 12
Cirrus Media
117, 119, 130* 65
Mondo Direct
Dominos
25
National Franchise Insurance Brokers
Dream Doors
58
Noodle Box
29
Extreme Pita
35
Orange Leaf
91
Ozzy Kleen
19
131*
107
Five High Vending
64
Pack & Send
2
Green Planet
93
Pizza Capers
60, 61
Franchise Selection
78, 79*
Specialised Events
102*
115*
Crave
Fastway Couriers
108
Gelatissimo
Aussie Outdoor
Baskin-Robbins
Property Club
Pizza Hut
13*
Subway
53*
Swimart
31*
The Australian Drug Detection Agency
132
The Cheesecake Shop
98*
The Concrete Cutter The Franchise Shop
97 40, 41*
Top Snap United Petroleum VIP
Xpresso Delight
71*
• The Yearbook • E-newsletter & E-blast • Online inventory
David Strong National Sales & Marketing Manager P: 02 8484 0905 M: 0411 366 656 E: david.strong@cirrusmedia.com.au Facebook.com/franchisingau Twitter.com/franchisingau
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6* 59*
ADVERTISING ENQUIRIES
130| FRANCHISING JAN/FEB 2014
106*
Wisewould Mahoney
Franchising • Magazine • A-Z listings • The Profiler
27*
Run your own rewarding business Fastway Couriers has a number of exciting franchise opportunities available • Guaranteed income package*
• Exclusive territories
• Low start up costs
• No weekend work
• Perpetual Franchise Agreement
• Ongoing business support & training
• Recognised brand
• Easy to operate - no experience required
• Award winning system for over 30 years
• Enjoy the freedom of working for yourself
To find out more contact us: p. w.
1300 FASTWAY fastway.com.au
*For a defined period. Conditions apply. Fastway Couriers (Australia) ABN 38 057 389 769. Fastway Couriers is a franchised courier network and its businesses are independently owned.
The Australian Drug Detection Agency
ADDA
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Email: glenn.dobson@tadda.com.au
Email: kirk.hardy@tadda.com.au Email: kirk.hardy@tadda.com.au Website: www.tadda.com.au Website: www.tadda.com.au Website: www.tadda.com.au