Of Becoming a Gelatissimo Franchisee

ISSUE 41 EDITION ONE 2015 The FranchiseReview OFFICIAL JOURNAL OF THE FRANCHISE COUNCIL OF AUSTRALIA

Bakers Delight celebrating 35 years

INSIDE of success Page 14: Changes to the Australian Small Business Commissioner

Page 16: The reasons many franchise recruiters are failing – and what you can do about it

Page 26: The challenges of taking your franchise overseas 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’.

331362A_Caltex Aus | 2194.indd 1 20/02/15 10:36 AM THE FRANCHISE REVIEW

Contents

4 A message from the Chairman By Warren Wilmot, Chairman, Franchise Council of Australia INSIDE

8 Do you know your State Chapter?

14 FCA leads the way on changes to the Australian Small Business Commissioner

16 The $50 million question: Why are many franchise recruiters failing? By Raffael Fernandes, Head of Franchising Group, Cirrus Media – franchisebusiness.com.au

22 How your franchise business can get more value from social media By Tim Lele, Keep Left

26 The challenges of opening a business in global markets By Ian Martin, Chief Executive, Noodle Box

29 Franchisors on… Q&A with Gelatissimo, Just Cuts and Snap-On Tools

33 Using technology to support growth and recruitment strategies By Jono Britton, Managing Director, Shift8

36 Supporting franchisees on their emotional and business journey By Greg Nathan, Founder, Franchise Relationships Institute

42 Reaping the rewards at Bakers Delight Q&A with Gerry Gerrard, General Manager of Bakers Delight

48 An inside look at the International Franchise Convention

52 Meet the Young Entrepreneurs in Franchising winner Q&A with Rhys Richards, winner of International Franchise Association’s NextGen competition

56 Are you a lender-friendly brand? By Darryn McAuliffe, CEO, FRANdata Australia

61 Franchisee recruitment tips for franchisors By Professor Lorelle Frazer, Director, Asia-Pacific Centre for Franchising Excellence

63 FCA Events Calendar

Published by: Executive Media | ABN 30 007 224 204 430 William Street, Melbourne VIC 3000 Tel: (03) 9274 4200 | Fax: (03) 9329 5295 Email: [email protected] | Web: www.executivemedia.com.au

The editor, publisher, printer and their staff and agents are not responsible for the the accuracy of information is that of the individual contributors, and neither the accuracy or correctness of the text of contributions contained in this publication, publisher nor editors can accept responsibility for the accuracy of information or for the consequences of any use made of the products and information that is supplied by others. It is impossible for the publisher and editors to ensure referred to in this publication. The editor, publisher, printer and their staff and that the advertisements and other material herein comply with the Competition agents expressly disclaim all liability of whatsoever nature for any consequences and Consumer Act 2010 (Cth). Readers should make their own inquiries arising from any errors or omissions contained within this publication, whether in making any decisions, and, where necessary, seek professional advice. caused to a purchaser of this publication or otherwise. The views expressed in the articles and other material published herein do not necessarily reflect the © 2015 Executive Media Pty Ltd. All rights reserved. Reproduction in whole or part views of the editor and publisher or their staff or agents. The responsibility for without written permission is strictly prohibited.

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331364A RHP2of2_Netdeen | 2194 26/02/15 11:09 AM THE FRANCHISE REVIEW

A message from the Chairman

BY WARREN WILMOT, CHAIRMAN, FRANCHISE COUNCIL OF AUSTRALIA

I want to both welcome you to my first our constituents and their staff. But the article as Chairman of the Council, and larger brands need to be encouraged thank you all for welcoming me into the role. to participate in this, because much of what maturing brands are learning and I need to start by thanking the outgoing experiencing, the big brands and well- Chairman, Michael Paul, for his work with established systems have already been the Council, and even more so for staying through. So, one of my personal goals is on as Co-Vice Chairman to assist the to gain more support and engagement Board and me in the role. Jason Gehrke is from the larger brands. also staying on as the other Co-Vice Chair, so I know I have great support, and the I am also keen to improve our Board and Council are the beneficiaries of Association’s processes from the Board both new blood and experience. down. The Board is a fantastic group of dedicated representatives who willingly In the last year, the Board worked to give up their time to serve the franchise ensure that the government introduced community. So, I want to ensure that the new Code of Conduct with as much they are well equipped to do this, and sensible balance as could be achieved. that they can serve efficiently and I believe that the Association was well effectively on behalf of all members. served by the members of the Board Pines Resort). Our challenge is to keep This will start with the Australian and the individuals who played a part building the content to ensure that it is Institute of Company Directors working in assisting; they have achieved a much the absolute ‘must attend’ event for the with the Board. I hope that this will healthier outcome than may have franchise community each year. We’d lead to a strong association with that otherwise been the result. love to hear any ideas from the broader organisation, and to their presence community on content, or about great at the National Franchise Convention So, now we all get on with business, speakers you have recently seen. That (NFC) this year. I’d encourage all bring our systems into compliance at the information can be channelled back franchisors to consider development for appropriate time, and get on with serving through Kym De Britt their teams in the very important area of franchisees and the end customer. ([email protected]). what happens in a Boardroom. Several people have asked me what my We have a stable regulatory environment, As mentioned above, the last Board vision for the FCA and the Board will be. and a reasonable economy to operate in commissioned some work with input I often say that my leadership style is to (perhaps with some rocky bits for those from Directors and from many members lead from the middle, and I believe that around the edges). We all need to continue – even some who have been disengaged. the Chair’s role is to tease out the issues the main focus of building sales, improving This has given us a raft of suggestions of the business (or Association in this franchisee profitability, growing franchisee to consider; some are small, but a case), and to use the team to achieve the capability and generally growing the number are significant enough to need best result. In Board meetings to date, franchisor’s business. I’ve done a lot of listening, and I think consideration and discussion. One of that there is a bit of a mood for change. my key objectives will be to ensure that If there is anything I can do to help, either The previous Board had commissioned we review these, and that we work to as Chair or as a worker in a larger brand, some work to define the opportunities implement those that are achievable in a please feel free to approach me for how the Board might work better, careful and considered manner. After the ([email protected]). One of broaden its base of support by next Board meeting, we will report back my many failings is remembering names, bringing in more members, and regain to the membership on this. so don’t be afraid to introduce yourself engagement with the ‘big’ brands. several times. I’ll get it eventually. We are already working on the speaking I am clear that the Association is for content and schedule for NFC15. I Good luck to all in the franchise groups every member – spreading best-practice thought that last year’s content was of for 2015. I hope that your businesses franchising, representing small to a very high standard, and it’s a great flourish, and that you continue to see medium systems and our model of doing base from which to go forward (and in the value of your membership and business to government, and educating a much better facility – the RACV Royal participation with FCA.

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Franchise Review Media Advert_420x297_0215.indd 1 27/02/2015 5:28:09 PM 4/03/15 9:57 AM THE FRANCHISE REVIEW

Do you know your State Chapter?

The Franchise Council of Australia (FCA) is run through a national office based in Melbourne. It would not be possible, however, without the help of our voluntary state committees, which work tirelessly each year to create valuable events for you to attend, to provide expert advice on the FCA stand at various trade shows, and to engage with FCA members and external stakeholders in each state. The committees and State Presidents are each selected by the membership via an online election held in August each year. Committee members serve two-year terms. There have been a few changes since the last election, including two new State Chapter Presidents. If you would like to get involved in your local Chapter, look out for the nomination email, which will be sent to members in July, or contact your local State President via [email protected].

Western Australia State President and FCA Director: Tamra Seaton Tamra is a director of law firm MDS Legal. She practises in the area of franchising and licensing law, and in the related areas of competition, trade practices compliance, intellectual property and commercial property law. Tamra’s franchising work includes the establishment and ongoing administration, development and corporate governance of state, national and international franchise schemes, and also the sale and acquisition of franchise networks. She counts several large franchisors among her long-term clients, as well as several new and emerging franchise systems. Tamra also advises and acts for master- franchisees and franchisees. Tamra has been on the committee of the Western Australia Chapter of the FCA for approximately 10 years. Tamra was elected State Chapter President at the end of 2014.

South Australia State President and FCA Director: Rose Vis Rose Vis is the co-Founder and director of V.I.P. Home Services, a company established in South Australia in 1972, and the first home services company in Australia to franchise, which it did in 1979. Today, V.I.P. has more than 1100 franchisees across Australia and New Zealand in home cleaning, lawns and gardens maintenance, and commercial cleaning.

V.I.P. won the FCA Franchise System of the Year (entry capital under $50,000) in 1998.

Rose was the proud winner of the Franchise Woman of the Year 2005 for South Australia, and in 2012 she was recognised by the FCA for her contribution to franchising. V.I.P. has been a member of the FCA since its inception in 1983, and Rose has served on the committee of the South Australia Chapter of the FCA for the past 10 years.

Rose was elected State Chapter President at the end of 2013.

8 THE FRANCHISE REVIEW

Victoria/Tasmania State President and FCA Director: Gary Carter Gary Carter is General Manager Franchise Operations at FC Business Solutions, providing fully integrated franchise operations services, including franchise feasibility studies, business system development, growth strategies, system diagnostics and strengthening, training and development, network planning, and health checks in all operational matters. As the former Tatts Lotteries General Manager Retail Operations, Gary has more than 30 years’ experience in leading and managing large multi-site franchise and retail networks, and has also worked with other well-known brands, such as Bevilles Jewellers. Gary was elected State Chapter President in 2011.

New South Wales/Australian Capital Territory State President and FCA Director: Sean O’Donnell Sean has been actively involved with the FCA and franchising for more than a decade. He has a prominent profile in the sector, and is a longstanding member of the NSW/ACT Chapter of the Franchise Council of Australia. Professionally, Sean is a partner at HWL Ebsworth Lawyers. Sean is a leading franchise and dispute resolution lawyer, with many years’ experience resolving disputes and litigation throughout Australia. He is a well-known litigator and is the preferred dispute lawyer for many national franchisors when a serious issue arises. Sean also acts for master-franchisees and franchisees, and has assisted many franchisees, sometimes on a pro bono basis, providing advice and helping resolve franchise disputes. Sean was elected State Chapter President in 2011.

Queensland/Northern Territory State President and FCA Director: Warren Ballantyne Warren Ballantyne is the founder, owner and managing director of Gutter-Vac – the world’s first and largest gutter-cleaning franchise, which is revolutionising the gutter-cleaning industry. Warren invented and developed the gutter vacuuming technology in 1995, and commenced franchising in 2000. Gutter-Vac now has around 50 franchises across all seven Australian states and territories, and is in the process of expanding its franchise system into North America (launch set for United States’ autumn in 2015).

Warren is also the founder, owner And Managing Director of Ballantyne Safety – a height safety concept that was created by Warren in 1995 to complement the Gutter-Vac operating system. Ballantyne Safety’s range of temporary roof safety equipment provides workers across Australia with a fast and effective method to safely work at heights.

Warren is also Chairman of Gutter-Vac International Pty Ltd, and the Chief Operating Officer of Gutter-Vac LLC (the North American franchise company).

Warren has enjoyed serving on the FCA Queensland State Chapter for five years, and is dedicated to franchising in Australia and abroad. Warren was elected State Chapter President at the end of 2014.

9 THE FRANCHISETHE FRANCHISEREVIEW // SPONSOREDREVIEW ARTICLE

ARE YOU SUPERSTREAM READY?

The government has changed the way that employers must pay super contributions.

The changes were introduced to speed up the processing of • it’s secure rollovers and contributions, and reduce the number of lost • it’s all completed online, so there’s no paperwork accounts and unclaimed super. • it improves accuracy by pre-validating your submitted data The new SuperStream legislation requires you to pay your and letting you know if there are any missing details employees’ super using standardised data within an approved • you can pay by file upload (for many employees) or by direct online payment system. entry (for few employees). This means you will soon be unable to make super payments More information by either post or using a non-compliant online system. To learn more about SuperStream or how to register‡ for What you need to do QuickSuper, see www.australiansuper.com/PaySuper. Under the changes, you’re required to make contributions You’ll need to have your company details and AustralianSuper through a payment system that lets you: employer number handy when you register for QuickSuper. If you don’t have an AustralianSuper employer number, you can • make super payments electronically join us at www.australiansuper.com/join. • provide employee data online in a standard format And if you have any questions about SuperStream or need help • link money and data with a unique payment reference setting up a QuickSuper account, call us on 1300 300 273. number. If you have 20 or more employees, the reforms started on 1 * If you have 20 or more employees, the Australian Taxation Office (ATO) July 2014*. If you have 19 or fewer employees, SuperStream may provide some flexibility on your start-up date, provided you’re making applies from 1 July 2015*. a genuine attempt to implement and have a firm plan to do so by no later than 30 June 2015. If you have 19 or fewer employees, the ATO will be We can help you comply flexible provided you have a plan to apply SuperStream by 30 June 2016. QuickSuper†, AustralianSuper’s free online payment solution, † QuickSuper is a registered trademark and a product owned and can help you meet your SuperStream obligations. operated by Westpac Banking Corporation ABN 33 007 457 141. It meets all of the new government super requirements and Westpac’s terms and conditions applicable to the QuickSuper service lets you pay your employees’ super into multiple funds with just are available after your eligibility for the free clearing house service is one payment. assessed by AustralianSuper. A Product Disclosure Statement (PDS) is available from Westpac upon request. QuickSuper is suitable for all types of businesses, and benefits include that: ‡ You can choose to submit your contributions using a different service, but it needs to meet the government’s minimum data standards as legislated. • it’s free to use See www.australiansuper.com/StrongerSuper for more information. • it’s government compliant 10A

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WithWith access access to to a a free free clearing clearing house house* *through through AuAustralianSuperstralianSuper you you can can pay pay all all your your staff’s staff’s super super inin one one hit, hit, no no matter matter who who they’re they’re with. with.

RequestFind out a more:call back today at: australiansuper.com/australiansuper.com/clearinghouseclearinghouse It’sIt’s Australian. Australian. And And it’s it’s super super. .

*QuickSuper*QuickSuper is a registeredis a registered trademark trademark and aand product a product owned owned and operatedand operated by Westpac by Westpac Banking Banking Corporation Corporation ABN ABN33 007 33 457007 141.457 A141. Product A Product Disclosure Disclosure Statement Statement (PDS) (PDS) is available is available from fromWestpac Westpac upon upon request request ThisThis document document was preparedwas prepared in February in February2015 201by5 AustralianSuper by AustralianSuper Pty Ltd PtyABN Ltd ABN 94 006 94 457006 987457 AFSL987 AFSL 233788 233788 the Trustee the Trustee of AustralianSuper of AustralianSuper ABN ABN 65 714 65 394 714 898 394 and 898 mayand containmay contain general general financial financial advice advice that does that doesnot take not intotake account into account youryour personal personal objectives, objectives, situation situation or needs. or needs. Before Before making making a decision, a decision, consider consider your yourfinancial financial requirements requirements and readand read the relevant the relevant Product Product Disclosure Disclosure Statement, Statement, available available at www.australiansuper.com/pds at www.australiansuper.com/pds or by or calling by calling 1300 1300 300 273.300 273. THE FRANCHISETHE FRANCHISEREVIEW // SPONSOREDREVIEW ARTICLE THE FRANCHISE REVIEW

A CUT ABOVE THE REST

Just Cuts’™ Chief Executive Officer and Founder Denis McFadden has set the pace for the hair and beauty industry, implementing a new marketing, communications and POS system (JustOnline) that drives direct communication between the B2B and B2C markets – exclusive to Just Cuts™.

With cutting-edge technology, innovation and expansion, the JustOnline has streamlined both internal and external future looks bright for the largest hairdressing franchise in the communications from the international support office in Sydney southern hemisphere. (Just Cuts™ Academy). Just Cuts™ is proving to be a cut above the rest with its recent A cloud-based operating tool, JustOnline drives 360 investment in its own business. With 64 per cent of franchisees communications from remote locations between the Just Cuts™ being multi-site owners, Just Cuts™ has a ‘genuine business Academy, franchisee, salon (stylist) and client in real time. system’ that is second to none; but what is the company doing Tracking consumer behaviour, the system has been developed to remain profitable in the future? to communicate national marketing campaigns and capture the The answer to this is internal growth. data of the 80,000 clients that Just Cuts™ franchises style every week. This information has given greater return on investment With a strategic vision to double its market share by 2017, (ROI) for franchisees, driving more clients into the salons and Just Cuts™ has looked within its current systems to ensure that ensuring that more intelligent local area marketing and national it remains an industry leader. marketing campaigns are continually moving forward. Developed by a working group of Just Cuts™ franchise owners, JustOnline is an extension of the systems, policies and JustOnline has systemised and simplified daily operational products that are in place to ensure that Just Cuts™ franchise tasks for stylists, allowing real-time remote access for franchise owners remain profitable and continue to grow. It was launched owners. JustOnline gives franchisees a real-time snapshot at Just Cuts™ international conference in August last year, on of their businesses, allowing them to work on their business, the one-year anniversary of Just Cuts’™ exclusive retail range, rather than in it. JUSTICE Professional™.

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4/03/15 9:26 AM THE FRANCHISE REVIEW THE FRANCHISETHE FRANCHISEREVIEW // SPONSOREDREVIEW ARTICLE

Why Just Cuts™? Iconic franchise powerhouse Just Cuts™ has paved the way for franchising in Australia for the past 25 years, building a system that puts the franchisee first: • fixed franchising fee • 78 per cent brand awareness in the market • spend less than 30 hours per week working on your business • you do not have to be a hairdresser to own a franchise • on average, franchisees go on to own 2.3 salons each • exclusive professional retail range • national support and training team • national advertising and marketing campaigns • in good and bad times, hair grows! For more information, contact National Business Development Manager, Luke Manning at: M: 0439 130 499 | E: [email protected] W: justcuts.com

About Just Cuts™: • celebrating 25 years of franchising in 2015 • currently styling 80,000 clients’ hair every week! • 186 salons currently operating across Australia and New Zealand The conference also saw three new products launched to market • pursuing master franchisees for international to satisfy the needs of both Just Cuts™ stylists and clients: expansion in 2015 JUSTICE Professional™ Scalp Treatment Shampoo, Pomade and Firm Clay. This salon professional styling and care range • JustPowerCoaching introduced to assist new owners has been extended to 17 unisex products, allowing clients to to increase salon profitability maintain their Style Cuts™ cut in between visits to the salon. • charity partnerships – we have raised more than $365,000 for the Royal Flying Doctor Service, thanks But innovation has not stopped here; the Just Cuts™ kiosk now to the kindness of our teams, owners and clients joins the traditional inline salon as a cost-effective entry point for stylists making the transition to business owners. • we broke a Guinness World Record with Wesley Mission to raise awareness for homelessness. We Mitigating early financial risk, the kiosk runs at both a lower broke the record for the most haircuts completed purchasing price (from A$85,000) and lower operational costs. by a team of 10 over an eight-hour period – we cut Just Cuts™ Chief Operating Officer Amber Turnbull also sees the hair of 375 people for FREE that day in Martin the kiosk as a key factor in the future growth of multi-site Place, Sydney franchisees, moving into additional satellite sites in high-foot- • Just Cuts™ was the official hairdresser for the traffic shopping centres. Australian 2000 Olympic Games, giving athletes ‘We have developed a training program that encompasses all and coaches free Style Cuts™ cuts. More than 100 areas of the business, with an ongoing support program in stylists from Just Cuts™ salons across Australia and place to ensure that the transition from both stylist to owner, New Zealand participated. We were basically on tap and owner to multi-site franchisee, is seamless,’ Turnbull says. to cater for the needs of the thousands of athletes, sports officials and media representatives over the Just Cuts’™ growth can also be credited to promoting Style Cuts™ 54 days of the Games. cuts for everybody! Currently boasting a client base of 50/50 males and females, Just Cuts™ markets to the whole family.

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4/03/15 9:26 AM THE FRANCHISE REVIEW

FCA leads the way on changes to the Australian Small Business Commissioner

At the time of writing, the federal government has announced a consultation period on changes being It is expected the Ombudsman will made to the Office of the Australian Small assess disputes and direct parties to the Business Commissioner. most appropriate resolution process, and will also counsel the parties in how to Next financial year, the government will transform the Commissioner to a Small Business and Family Enterprise deal with disputes Ombudsman (the Ombudsman), who will be a Commonwealth- wide advocate for small business. In late March, the Department of Treasury released draft legislation and opened consultation through to Easter. The FCA’s view The new office of the Ombudsman is expected to be In April 2014, the Department of Treasury, incorporating the operational from 1 July this year. Office of Small Business headed by Minister for Small Business The Ombudsman is an office of the Australian Government and Bruce Billson, first released a discussion paper and invited part of the Department of Industry. It is designed to extend the submissions on the proposed changes to the Commissioner’s role of the Small Business Commissioner to help businesses office. The FCA provided a detailed submission on the powers of and individuals understand their obligations under federal the proposed Ombudsman. regulation. It will also act as a ‘concierge for dispute resolution’. It was important to ensure there was no needless crossover of Currently, there are a number of resources available to deal jurisdiction between the Ombudsman and other federal and with disputes in franchising, including the Office of the state-based resources. Franchising Mediation Adviser and state-based Small Business The FCA supported the move to make the Ombudsman a Commissioners. It is expected the Ombudsman will assess concierge for dispute resolution, with a number of stipulations. disputes and direct parties to the most appropriate resolution Communication tools and support such as mediation have process, and will also counsel the parties in how to deal with proved to be very effective in resolving issues in the franchise disputes. The Office will also act as an information source to sector. During the consultation phase, the FCA agreed with make smaller businesses aware of other advice, programs and the Ombudsman acting as a kind of ‘triage’ service; that is, services available from the government. undertaking preliminary discussions with the parties and determining the best course of action. That could include

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The FCA felt there were already appropriate government bodies in place to deal with further investigation (ACCC, ASIC et cetera), and to grant these powers to the Ombudsman would cause duplication and create confusion in the investigation process

referral to a state-based Small Business Commissioner or an From here, the legislation will need to clear both houses of industry-based mediator (like the Office of the Franchising Parliament before coming into effect by the government’s Mediation Adviser) to enter into a dispute resolution process. proposed 1 July start date. The FCA also supported a provision that would allow the For more information on the Ombudsman, the FCA submission or the Ombudsman to impose financial costs associated with non- consultation process, visit www.treasury.gov.au or contact the General attendance at mediation. Manager at FCA head office on 1300 669 030. Importantly, the FCA did not support the Ombudsman being granted the power to investigate business complaints, including obtaining information from involved parties. The FCA felt there were already appropriate government bodies in place to deal with further investigation (ACCC, ASIC et cetera), and to grant these powers to the Ombudsman would cause duplication and create confusion in the investigation process. It is felt once the decision to further investigate or initiate mediation has been made, the Ombudsman should then refer parties to appropriate agencies. This leaves the Ombudsman’s office with resources to fulfil its other duties, which include small business advocacy to government and other stakeholders (including independent consultation on proposed legislation) acting as an information resource to small and family businesses, promoting best practice principles in business, and working with Commonwealth, state and territory governments to ensure a coordinated approach to the small business sector in Australia. The above is by no means an exhaustive list, but, in all, the FCA supported the move as a way to provide more clear and cohesive support to small business owners, incorporating both franchisors and franchisees, across Australia. What happens next? The federal government intends to introduce the Small Business and Family Enterprise Ombudsman to the landscape by way of legislation. At the time of writing, draft legislation has been released for consultation. Pleasingly, many of the stipulations in the initial FCA submission have been acknowledged in the draft. Consultation closed on 7 April. The FCA has provided a submission further cementing both its support and stipulations for the proposed Ombudsman. Minister for Small Business Bruce Billson

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The $50 million question: Why are many franchise recruiters failing?

BY RAFFAEL FERNANDES, HEAD OF FRANCHISING GROUP, CIRRUS MEDIA – FRANCHISEBUSINESS.COM.AU

For the past 18 months, I’ve spent a great deal of my waking life preoccupied with understanding a complex series of events that I’ve now come to know as ‘the franchise buyer journey’.

This preoccupation (and I don’t use that term loosely!) was born out of a desire to understand how the franchise brands I’d been working with could generate higher sales. In order to do that, I had to get a handle on how, when and why franchise buyers interact with companies at the point of first enquiry. Hearing feedback from both sides over the past six years, it seemed evident that there were huge disconnects between My belief was that if we could what the two groups were telling us: understand how to improve this • Franchise sellers: ‘95 per cent of leads are tyre kickers. They don’t return emails, and don’t even leave their phone primary interaction between both numbers. #@+#% useless time wasters!’ • Franchise buyers: ‘I’m trying to understand which brand parties, then a huge amount of is the best fit for my financial and work/life goals. I need inefficiency could be decreased helpful information to review in my own time without being hassled by a sales rep, as I’m not quite ready to buy, and I don’t want to have to give up all my details to get it’. Both statements will sound very familiar to most of us. I started to ask every franchise brand that I came across – But for me, something still didn’t quite add up, and I was mature and emerging, retail and service – about their typical determined to find out why. My belief was that if we could lead generation and follow-up practices, and the answers were understand how to improve this primary interaction between both pretty interesting. parties, then a huge amount of inefficiency could be decreased. 1. Most franchise brands were using external franchise media to generate leads.

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2. Most franchise brands were generating strong – sometimes the strongest – leads via their own website forms; although, in many cases, these people were referred to the site by an external franchise medium. It’s becoming apparent that there Okay. No surprises so far. is a science to lead generation, and 3. Many, but not most, franchise brands had a good understanding of their overall lead-to-sale conversion rate many franchise brands still weren’t (anything from one in 30 to one in 100). measuring the basics 4. A few, but not many, franchise brands had split conversion rates between lead to candidate, and candidate to sale (the latter was typically much higher than the former). 5. Less than half of the franchise brands were measuring these metrics and conversion rates monthly, and Say what?! implementing tactics to keep improving them. (I recently met with a franchise development manager at a It’s becoming apparent that there is a science to lead generation, leading national brand whose face drained of blood when it and many franchise brands still weren’t measuring the basics. dawned on him that he needed to meet with 40 candidates And, as we all know, you can’t manage what you don’t measure. per month consistently for the next year just to have a fighting 6. Many, but not most, franchise brands hadn’t fully reverse- chance of achieving the sales key performance indicators engineered their lead generation volumes to achieve their (KPIs) loaded on him by his boss.) sales goals, based on average conversion rates. 7. Most franchise brands would send an enquiry follow-up email within 24 hours.

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Lead nurturing is defined as ‘the process of building relationships with qualified prospects (often by delivering highly valuable content that helps them progress along a buying path) regardless of their timing to buy, with the goal of earning their business when they are ready’

Phew, you’d hope so... Sure, many of these supposed tyre kickers may sit on a database and receive a regular monthly company newsletter 8. Many franchise brands would send an extensive follow-up in the hope that they re-engage, but, really and truly, is the email, including requests to complete a lengthy application brand actually providing any meaningful content that is going to process and confidentiality agreement in order to further nurture a prospect closer to the buying point? the process. In most cases, it seems that it won’t, and that largely comes 9. Many franchise brands were sending a brief follow-up down to brands not fully understating which content can email, requesting a telephone conversation to get to know achieve this goal, or not having the capacity to act like a the enquirer and discuss the opportunity further. publisher as well as focus on the core business activities. It’s a 10. In both instances 8 and 9, however, brands were very common problem for franchise brands of all sizes, sectors experiencing low lead to candidate conversion rates, and and levels of maturity. were frustrated and wondering why. Think about that last time you bought a car, a home or This last point is the one that I am really interested in. Why a holiday: would a sane person, who has taken several very distinctive • Did you do research before engaging a sales representative? steps to research a franchise brand or opportunity and send an email, suddenly drop off the face of the earth? It’s the $64 • Did you want your own time and space to digest the million question, isn’t it? information? • Would you have had a higher likelihood of returning to the Well, not quite. It’s possibly closer to being a $50 million provider that helped you by providing valuable information to question, which is the approximate cumulative spend on make a better purchase decision? franchise recruitment advertising every year in Australia, based on data from the Griffith University 2012 Franchising survey. • Would you have liked to have been written off as a tyre kicker if you chose not to give up all of your information or With so much being spent to acquire prospects, and so many sit through a sales pitch the first time you walked into a car prospects being written off before the first hoop has even been showroom? jumped through, the potential for wastage is equally high. The • Would you have continued your buying journey elsewhere, key missing link to improving conversion lies, in my opinion, and ended up purchasing from a provider that offered more in the very specific best-practice of how to ‘nurture’ a lead information up-front and allowed you the time and space to into a candidate, and ultimately into a buyer, at scale, with come back when ready? consistency and with maximum cost-efficiency to the business. I certainly know what I would do. It’s clear that franchisee Lead nurturing is still a relatively unheard of term for many franchise research behaviours and enquiry patterns have changed. As marketers, but elsewhere, it’s a multi-billion-dollar industry. Australian consumers, we have developed an increasingly low Lead nurturing is defined as ‘the process of building tolerance for product-push advertising, and for sales reps being relationships with qualified prospects (often by delivering highly the gatekeepers of information that we can gather in our own valuable content that helps them progress along a buying path) time and on our own terms. regardless of their timing to buy, with the goal of earning their When we are ready to buy, we increasingly go to those who business when they are ready’. we perceive to be trusted experts that have added value to our In Australian franchising, it seems that if a candidate is not ready purchase decision. to buy, or is unwilling to enter into a discussion about buying as It’s time for franchise marketers to catch up, and content yet, in many cases, they are dismissed as a tyre kicker. marketing-driven lead generation and lead nurturing is the Sales teams will naturally focus on the ‘low-hanging fruit’, but way forward. when potentially 80 per cent or more of prospects are still in Raffael is a leading expert on content marketing and lead generation earlier stages of the purchase journey, then pipeline practice for franchisee recruitment, and is currently head of the franchise is critical. media portfolio at Cirrus Media, which includes the Franchise Council of Australia’s official directory, franchisebusiness.com.au.

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RECIPE FOR SUCCESS

A brand loved by Aussies nationwide, Gelatissimo is a unique gelato business that rewards not only its customers, but also its franchisees. Making brilliant gelato is a complex task, and so is building a brilliant gelato business, but Gelatissimo has mastered the recipe for success! With a combination of quality artisan products and simple instore production systems, the company has created a superior product with a huge dose of its trademark flair.

Since the brand’s first concept gelateria was unveiled in gelato delicacies, including Sushi Gelato, Noughts and Crosses, 2002, the franchise has gone from strength to strength, and and Milk and Cookies, makes the exclusive new menu a with an experienced and skilled management team, Gelatissimo tempting treat for all the family! now has 34 stores nationally and 51 stores globally, making it Given the immediate popularity and success of the range, the the largest gelato franchise in Australia. Partners have enjoyed brand is now rolling out the concept further to Adelaide, where the independence of operating their own businesses, while three Eat in Dessert cafés have opened this year alone. Firmly being part of a strong, supportive and simple system based on establishing themselves as family destinations, the stores proven methods. also offer coffees, milkshakes and gelato cakes, meaning that Gelatissimo has a passion and commitment to creating the Gelatissimo experience can be enjoyed all year long. The premium gelato without compromise. The brand concept developing range is testament to the brand’s reputation as a is truly unique, using secret traditional Calabrian family recipes frontrunner and a pioneer in the gelato market. and the finest quality ingredients, with all products made Gelatissimo is an established franchisor, and in addition to fresh in store – this is all part of the distinctive Gelatissimo the Eat in Dessert cafés, the brand offers its franchisees experience. three styles of outlets: shopfront, kiosk and café, as well as The brand’s stores immerse customers in an authentic full training and continuous support from the professional, Italian experience, with the help and expertise of their master operational and marketing teams, enabling them to showcase gelato-maker, Italian-born Anna Temellini, who brings with their passion and hunger for success. her more than 20 years of experience. Anna helps with training The brand is currently seeking franchise partners who share its and product development, ensuring that Gelatissimo’s offering values of dedication and dynamism, as it continues to expand is always inspiring and puts a smile on people’s faces. and cater to the world’s timeless desire for indulgent gelato. Always striving to delight customers with something innovative Gelatissimo has some outstanding opportunities available, both and surprising, Gelatissimo has also recently introduced an nationally and internationally, with stores across Australia, the exciting new range to its ever-expanding franchise, with Eat Philippines, Kuwait, Singapore and Saudi Arabia, making it one in Desserts. The first Eat in Dessert café opened in 2014 of the most envied and highly favoured franchisors currently in in Watsons Bay, New South Wales, turning the store into a the marketplace. destination experience for customers. The novel offering of

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331365E_Gelatissimo | 2194.indd 1 6/03/15 8:45 AM tae the SWEET REWARDS of becoming a Gelatissimo franchisee To change your lifestyle through investing in a business that is fun, ﬂexible and rewarding contact Karen at Gelatissimo on (02) 8845 0100 or email [email protected].

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gelatissimo.com.au THE FRANCHISE REVIEW

How your franchise business can get more value from social media

BY TIM LELE, KEEP LEFT

In 2015, it’s no longer about whether or not your brand has a social media presence; it’s about whether or not you are making the most of that presence to grow your business.

There are a staggering 13 million active Facebook users in Australia, and LinkedIn has more than five million, while 2.8 million people tweet. Business continues to make up an increasing number of these profiles. Australian franchise brands leading the way in social media span industries from fast food and retail, to trade and professional services. Social media is not just a channel to increase customer engagement; more and more, it’s being used for professional networking and career development, and to drive franchise recruitment. One of the great things about social media is that it’s a true leveller. No matter how big or small your franchise is, every brand has the ability to create a strong digital presence that showcases its unique values, and provides a voice to communicate with customers, suppliers and even potential franchisees. The reality is, even if you don’t have a Twitter, Facebook or Social media also provides an efficient LinkedIn profile, your customers, competitors and peers are most likely already talking about you there – both the good and way for those in the franchising space the bad. It’s simply a matter of whether you are prepared to join those conversations and influence your stakeholders, or to expand their professional networks, risk losing the engagement opportunity all together. share with peers, and learn from the Social media also provides an efficient way for those in the franchising space to expand their professional networks, brightest minds in the industry, while share with peers, and learn from the brightest minds in the industry, while building a personal brand that can help building a personal brand that can advance their careers. help advance their careers So, how can you get more value from social media and take your franchise to the next level? Here are my top four top tips:

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Develop a clear plan The Franchise Council of Australia's own LinkedIn discussion group It seems obvious, but you need to think about social media is a good place to start. With around 350 members from a wide the way you would any other professional marketing or cross-section of the Australian franchising community, including communications tool. Too many businesses simply decide to franchisors, franchisees, consultants and industry experts, the group set up a Facebook page and share a few updates and images, is a fantastic forum for open discussion about everything to do with and then get frustrated when the likes don’t come flooding in. franchising. Having some of the industry’s leading minds available to answer questions and share their thoughts is a useful resource for all A social media plan needs to map your target audiences, FCA members, as well as everyone in the franchising community. research what social media platforms your market is active in, and develop an effective content plan through which to engage with them. You need to decide the voice and tone of your communications. Are you fun and cheeky, or are you Endota Spa is a great example of a considered and authoritative? This is your business personality, and should be unique and consistent to set you apart from brand that knows its audience and your competitors. shares original content that their Create content plans Next, you need to decide the content pillars that will make up clients want to engage with. Scroll the majority of your posts, and map them out over a month or a week to develop a content schedule. Whether it’s images of through the beautiful images on their healthy food, the latest economic figures, or social events that Facebook and Instagram profiles, and are taking place in the local area, you need to think about the topics and themes that reflect your brand, and that resonate you can’t help but feel relaxed – you most with your target audience. The content consumed through YouTube, Facebook and can almost smell the lavender oil! Instagram is different to that on blogs, LinkedIn or Twitter, so consider the type of content you have to share, and which channels are best to reach your audience. Endota Spa is a great example of a brand that knows its audience and shares original content that their clients want Participating in LinkedIn group discussions is one of the to engage with. Scroll through the beautiful images on their best ways to build new connections online. Another way is Facebook and Instagram profiles, and you can’t help but feel through joining the social media discussions at conferences relaxed – you can almost smell the lavender oil! and events. At last year’s National Franchising Convention, Professional development and networking the #NFC14 hashtag was a hive of activity, with images and conversation being shared from all over the event, including Social media shouldn’t only be about your brand’s presence. the FCA’s official handle @FranchCouncilAU. As a leader, your personal social media engagement can be a great advertisement for your company, while providing new networking and learning opportunities.

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Franchise recruitment While your brand persona on social media can help attract potential franchisees, LinkedIn is a platform where you can actively target new recruits. A LinkedIn company page should be the digital shopfront of your brand. It is where you can share company updates and career opportunities, and gather powerful testimonials from customers and employees. When setting up your company page, make sure it is properly set up for search engine optimisation (SEO) with the keywords that your customers use. Surprisingly, very few Australian franchise brands are using LinkedIn company pages to their full potential. FCA members Aussie and Smartline Personal Mortgage Advisers are two best- practice examples. In addition to their keyword-rich and regularly updated company pages, each has a ‘careers’ tab that includes YouTube videos depicting what it is like to work for the company. They highlight referrals from franchisees and employees, and advertise franchise opportunities and other corporate positions that are available. Endota Spa's Instagram inpires its customers In addition to listing your franchise opportunities under the careers tab, another great trick is to post these to the Tim Lele is an Account Manager at cross-media public relations agency careers tab of the LinkedIn groups you belong to – like the Keep Left. For more information, visit www.keepleft.com.au. FCA group.

THE DOS AND DON’TS OF SOCIAL MEDIA

Dos Don’ts • Do have a constant supply of content to share with your • Don’t mix your personal profile with a business profile – this audience that is relevant and insightful. can create a wrong impression of the brand to customers. • Do make sure a strategy is put in place before • Don’t bombard followers with private messages – this embarking on a social media program. will only create negativity. • Do encourage your franchisees to get involved in social • Don’t ignore difficult questions or complaints about the media activity and ensure that they are provided with all business; that’s what the issues management plan is for. the tools that they require. • Don’t delete negative commentary or posts unless it is • Do have an issues management plan. defamatory or offensive, and make it clear that this is your policy.

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The challenges of opening a business in global markets

BY IAN MARTIN, CHIEF EXECUTIVE, NOODLE BOX

Many franchisors plan on taking their franchise overseas and introducing their service or product to a new market. But we all know business is riddled with franchise expansion plans gone wrong. For every international success, there are a dozen failures.

Is it possible to avoid the pitfalls? Throughout my career, I have identified that there are some basic steps an internationally ambitious company can take before it sets out on the path of expansion. These steps can work towards securing the health of a venture, but there are always myriad different things that can go wrong. Noodle Box was well established in the Australian market before we decided to head overseas to Saudi Arabia, adding Ian Martin

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to our existing international outlets in Mauritius. We’ve opened two restaurants in the Saudi region, and there are plans to open more. But before we set off, we did our homework. It is essential that you understand the political, economic and Even the big guys can get [their environmental difficulties of the market you’re entering. This is branding] wrong: KFC had problems one of the crucial first steps. Our team made sure that Noodle Box had a thorough understanding of the hurdles we were in China when its slogan, ‘finger- about to face in opening in Saudi. One of the fundamental exercises before you embark on any lickin’ good’, translated as ‘eat your type of international expansion is to make sure you’ve got your fingers off' trademark registrations sorted out. Unscrupulous operators have already hijacked many brand names, holding them to ransom until the rightful owners hand over extortionate amounts of finance to buy them back. Alternatively, they may be legitimate businesses in the region that carry the same name as you, but are none the wiser about your brand. You can find yourself spending a lot of time and effort on planning a market entry, only to discover that you cannot sourcing certain dairy items, for example, or serving pork may register your business because someone with your brand name be a problem in Muslim countries. Do your research and make is already trading there. sure your offering is actually feasible in a new market. Sometimes you can do something about it if you can prove that Next comes the big step: finding a franchise partner. It is easy the activity is unjust – specifically, if the brand name has been to be swayed by companies that offer an open chequebook – registered but it is clear that the business is not trading – but and this will certainly provide short-term benefits – but the true this often depends upon the jurisdiction; for example, it is strength of a franchise partnership is in the strategic alliance easier to take action against brand-name hijacking in Europe you can both bring to the deal. than in some other parts of the world. It is crucial that there is communication at the managing It is also important to ensure that you don’t get lost in translation. director level in both companies. This level of conversation Expanding overseas is not simply a matter of picking up your helps to ensure that both companies have the same vision. brand and expecting it to work in a new country; there are all You could clearly say, for example, ‘We want to see five outlets kinds of cultural differences to consider – from the colours of opened in the next six years, all of them in shopping centres’ – your logo to the name of your business – and they might not all and if the vision is the same, then both companies can agree be appropriate for your new market. Consider all aspects of your what success would really look like. branding, and whether they are culturally appropriate and not Finding the right franchise partner is a combination of likely to cause offence. Even the big guys can get this wrong: personality and paperwork. You have to analyse their business KFC had problems in China when its slogan, ‘finger-lickin’ good’, and their organisational structure, but the personal relationship translated as ‘eat your fingers off’. is important, too. The next thing to check is whether you can actually get your Are they up-front with you? Do they show good will? The product into your target country. Some countries have difficulty business plans and management personalities need to be

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aligned, but when things move to the market-entry stage, you need to be 100 per cent focused on the documentation, and must take all personal issues off the table. If you don’t already have a strong When Noodle Box moved into Saudi Arabia, we ensured that brand identity, such as Noodle Box, you our relationship with our franchise partner was strong. We shared clear objectives and business directions, and we knew will struggle to make your name here. that our partner had core capabilities that worked very well with our business model. You also need a good relationship with Our partners already operate two food franchise brands in your distributors, because Australia is the region, and they have deep commercial real estate and property experience, so we are reassured that they will be able a large country with a lot of transport to secure good sites for new Noodle Box restaurants. difficulties Our franchise partner ticked all the boxes for financial strength, and has committed to opening 65 Noodle Box restaurants over the next five years – and that is very much in keeping with our vision. Our partner decides the speed of the restaurant openings, but we know we are working towards an agreed So, you have you ask yourself: ‘Is this the right market for number in an agreed time frame. my brand?’ We always ask, ‘Where does Noodle Box want to be?’ and to answer that question, we look at the culture of the There can still be surprises after the deal is struck. Even prospective market and whether we are likely to be successful. the best relationship can go sour; for example, when there Noodle Box looks to open in markets that have a similar taste are management changes with the franchise partner, profile to our own, have strong takeaway eating habits, and are which can upset your strategic alignment and throw the familiar with franchised food options. agreement into doubt. Overwhelmingly, it is these similarities that drew us to Saudi Take a close look at the market you are about to enter, and Arabia – even though culturally you might think Australia assess whether or not your offer is competitive. Take noodles, is very different. People in KSA eat at home a lot, and men for instance. If we were assessing the noodle industry in and women usually eat separately. But they also dine out Australia with a view to launching a new brand here, we would regularly, and families eat together at restaurants. There is a consider this region to have low profitability. This is because strong dinner culture, rather than lunch, and that is perfect there are many different players in the market, with low barriers for Noodle Box. to entry and a concentrated distribution network. Our openings in KSA have been met with great success so far, If you don’t already have a strong brand identity, such as although it is still early days. We will be ensuring we proceed Noodle Box, you will struggle to make your name here. You with care, and monitor our guests’ responses and reactions. We also need a good relationship with your distributors, because are quietly confident about the future, and looking forward to Australia is a large country with a lot of transport difficulties. the next stage.

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Franchisors on... The Franchise Review asks members about their national and international operations, and gets the lowdown on how they stay current and successful in an evolving and challenging market.

THIS EDITION, WE TALK TO GELATISSIMO, JUST CUTS AND SNAP-ON TOOLS.

On franchising… On recruitment… GELATISSIMO GELATISSIMO Since commencing franchising in 2004, Gelatissimo has Do you approach recruitment in Australia differently to expanded nationally, and throughout South-East Asia and overseas? Why? the Middle East. What one piece of advice would you give to Yes, we do. The investment level needed for a local franchise someone taking their brand overseas? is a lot lower than an international one. The profiles of investors Make sure that you choose the right franchise partners. Set between the two are very different, so we approach the strong foundations for your franchisees to set them up for recruitment and support differently for both. success, and passionately support them on the journey. JUST CUTS JUST CUTS What does Just Cuts do as a business to retain quality What is the number-one challenge franchisors face in Australia? franchisees? How does this differ from what you have seen overseas Denis McFadden: Just Cuts encourages and helps our franchise Denis McFadden, CEO and founder: In Australia, we are very owners to acquire multiple salons by offering reduced initial lucky to be living a relatively affluent life. If you are in full- fees when they invest in their second salon. Just Cuts owners time employment (which is still the case for many of us), your are welcome to approach us with a new opportunity, and our lifestyle is pretty good. What we have observed overseas is ‘Cut Above Club’ franchise owners are offered first choice of any that the only way you can work towards achieving what you new locations we have available. are really worth is to have your own business – so franchising Amber Turnbull, Chief Operating Officer: A relationship of is better understood, as it provides an opportunity. Because mutual respect is also very important to us. In 2014, we of our comfortable lifestyle in Australia, our mindset is more conducted an independent 360-degree review of Just Cuts that risk-averse. The implication for franchisors is that the market is allowed our franchise owners to rate our performance as the more limited here in Australia than the United States. franchisor. 100 per cent of Just Cuts franchise owners rated SNAP-ON TOOLS our system as good/very good. We were also delighted to find How has the Snap-on brand continued to adapt from its United that 92 per cent of Just Cuts franchise owners rated their overall States origin to the Australian market? relationship with the franchisor as good/very good. Snap-on was founded in 1920 in the United States. Snap-on SNAP-ON TOOLS has a strong brand heritage, which continues to be relevant in What are you looking for in a Snap-on Tools franchisee? Do they Australia and the rest of the world. need to have a prior knowledge of the industry? Snap-on does have to adapt for local markets; for example, Prior knowledge of the industry is not essential, but knowledge of the Snap-on mobile store has had to be customised for the our tools is an advantage. What makes a great Snap-on franchisee Australian and New Zealand market. is someone with the right attitude and who is self-motivated, ambitious, goal-oriented, determined, and team-spirited.

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On education and training… JUST CUTS GELATISSIMO Just Cuts has just turned 25. What are Just Cuts’ plans for What has been the most worthwhile investment into training in growth and expansion before its 30th birthday, and does this the Gelatissimo network? include expansion beyond the Australian and New Zealand markets? Our recruitment of a highly qualified training manager, as well as the recruitment of a product training and development Amber Turnbull: Our 2015 strategy is centred on our vision manager. Having these resources on board means that we are to achieve 200 operating salons and five per cent market able to provide our franchisees with great support and coaching share. We have identified an additional 100 sites throughout to help them achieve success. Australia – these are opportunities for kiosks as stand-alone salons or additional satellite sites for franchisees making the JUST CUTS transition into multi-site franchises. We have also identified Just Cuts attended the recent International Franchise more regional shopping centres with less foot traffic, which Association Convention and USA Study Tour. What major can support kiosk salons, as they have a lower entry point and learning did you bring back to Australia? lower ongoing operational costs than a traditional salon. The kiosk is a more financially viable and sustainable option for a Denis McFadden: Our biggest learning was seeing firsthand potential franchisee, with less capital buying-in at a lower initial that Australia is a small market and that everything is scaled up investment. With a fixed franchise fee, this is an opportunity for in the United States. For instance, if we had started Just Cuts a change of lifestyle with unlimited earning potential. Most Just in the United States 25 years ago, today, we would likely have Cuts franchisees go on to become multi-site owners, with each 2000 units and a private jet (with our own pilot). The United currently owning approximately 2.4 salons. States has better finance options, which allows people with a passion to be recognised and given the opportunity to follow In September 2014, we announced the expansion of our their goals. If lending options were better resourced in Australia, focus to the global hairdressing industry, with expansion plans a lot more people could have their own businesses. into South-East Asia, the Middle East, India, and the United SNAP-ON TOOLS Kingdom. This is a natural progression for our franchise system How do you use your international network to ensure Australian that has only been limited by geography to date. franchisees are at the forefront of training and development? SNAP-ON TOOLS There are more than 4000 Snap-on franchisees around the What are Snap-on Tools’ plans to grow its presence within the world. As we are an internationally proven system, we have Australian market over the next five years, and how does this fit a wealth of experience to draw on from both employees and within the broader international strategy for the business? franchisees here and across the world. Snap-on Australia has a Over the next five years, our plans are to grow and expand our dedicated Training Manager, and also uses training facilities in franchise network by aligning our franchise list of calls with how the United States to support our franchisees. they are offered internationally. On growth and the future… The average tenure of a franchisee in Australia and New GELATISSIMO Zealand is 15 years, and this means we have to work closely Where do you see Gelatissimo in five years’ time, and what with our existing franchisees to implement any expansion strategies do you have in place to reach these goals? and development plans; for example, Snap-on Australia is currently working with franchisees to highlight our multi-unit Our aim is to be the market leader in the gelato franchise franchise opportunity. space. This includes the strong growth of the brand within Australia and internationally. To achieve this, we have a national Franchise Development Manager, and we recently introduced an international Franchise Development Manager.

30 Specialist Industry Knowledge

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Australian and Worldwide Affiliations

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The Firm oFFers Franchisors a broad We oFFer Franchisees a broad range range oF services including: oF services including: • Consultancy and advice on establishing new • Fixed fee, quick turnaround franchise franchised system; assessment for franchisees; • Assessment, review and upgrade of existing • Advice regarding rights and obligations under franchised systems and documents; the Franchising Code of conduct; • Systems, legal and Australian Competition and • Risks of Franchising and solutions to reduce Consumer Laws (ACCL) compliance; exposure; • Dispute resolution, solutions and strategies; • Structuring of the Franchise from legal, taxation and asset protection perspectives; • Intellectual Property, protecting your copyright/ brand; • Access to specialised Accountants with franchise expertise • Structuring of the Franchisor considering legal, taxation and asset protection; • Dispute resolution strategies and solutions without litigation; • Master Franchise Agreements; • Acting for franchise advisory councils and • International Franchising and support worldwide representative franchisee groups; - US/Europe/India/New Zealand; • ACCC complaints and investigations. • Access to a network of leading Consultants in the franchise industry; • ACCL, ACCC investigations and prosecution.

Wisewould Mahony | Lawyers We work as partners with our clients. 419 Collins Street | Melbourne VIC 3000 Our clients’ success is our success! p +61 3 9612 7297 | f +61 3 9629 4035 [email protected] GRT153904-0914-BD-PROSPECT-FRANCHISEES-FP-AD-FA.indd 1 22/09/14 5:29 PM THETHE FRANCHISE FRANCHISE REVIEW REVIEW

Using technology to support growth and recruitment strategies

BY JONO BRITTON, MANAGING DIRECTOR, SHIFT8

In the quest for continued network growth, franchisors are looking to technology to both attract new franchise buyers, and to support multi-site ownership.

Sales growth and network growth are the lifeblood of franchise systems, generating and improving brand awareness, purchasing power, and returns on advertising spend; however, with the limited pool of ready franchise buyers, franchisors need to get creative with their recruitment strategies in order to stand out from the pack. technological aptitude of buyers by showcasing their technology stack, and its ability to meet their needs on a So, how can technology support these growth and continuing basis. recruitment goals? This starts with assurances around the longevity of franchisees’ 1. Tempt the tech savvy software investment. Is there an up-front cost with a finite life According to IPSOS Global Trends 2014 survey results, cycle, or can you opt for ‘Software as a Service’, which allows for Australia ranks highly, with a large uptake of, and confidence growth while paying as you go? Showing buyers that the brand can in, device usage, coupled with an appetite to learn more. stay relevant in the face of rapid change and strong competition is Franchisors have an opportunity to tap into the growing a powerful incentive, and a unique point of difference. 33 THE FRANCHISE REVIEW

The ability to use new, mobile and often less-expensive hardware as it becomes available is an added incentive. Building in mobile apps, digital signage, electronic loyalty, group buying and social media will result in a cohesive IT International expansion is a common platform that offers all the benefits that franchise buyers seek, while also being easy to manage at a head-office level. goal for franchisors, and success 2. Broaden the buying pool overseas often bodes well for the Prospective franchisees each have varying levels of competency, so technology tools that help plug essential skills domestic market gaps can assist in relaxing franchisee selection criteria. Think franchisees with no prior service experience who are able to recognise a loyal customer, recall their previous purchase, view and recite items’ nutritional information, and suggestive Selecting an international partner or master franchisee sell – all from the point of sale. Imagine the same franchisee can be fraught, though, with many franchisors losing using a mobile tablet to create a staff roster and immediately operational control and transparency over sales results make adjustments based on the notified labour spend as and, therefore, revenues. compared to projected sales. Establishing a strong IT platform domestically that can be All of this is possible with a cloud-based operational system deployed internationally should be at the forefront of new and that links to the point of sale. Monitoring stock usage, labour existing franchise systems goals. Equipping your international spend, occupancy cost and franchise fees, all during the partners with access to the same operational tools, including normal course of business, adds no extra reporting burden to point of sale that satisfies the local currency, language and tax franchisees, and still provides vital key performance indicators requirements, means that the domestic head office can readily in real time. check, support and buoy a network in its infancy. Getting this right means selecting an Australian software solution that can It’s these same cloud-based tools that allow existing be customised for international markets, but managed from franchisees to manage and monitor performance and staff either the local or global head office. Combined with a locally remotely. It’s this capability that can give franchisees the sourced hardware, this will offer the most robust solution for confidence to invest in new sites without compromising returns. international partners, and will go a long way towards achieving Reporting solutions that offer the ability to review performance overall network growth. of individual or grouped sites are invaluable, and mean that franchisors needn’t rely on a franchisee’s physical presence to The team at Shift8 has many years’ experience assisting franchisors both know what is occurring in store in real time. domestically and internationally with their point of sale and reporting requirements. Contact us on [email protected] to see how we can help 3. Head offshore your brand, or visit www.shift8.com for more information. International expansion is a common goal for franchisors, and success overseas often bodes well for the domestic market.

THE FRANCHISE REVIEW

Supporting franchisees on their emotional and business journey

BY GREG NATHAN, FOUNDER, FRANCHISE RELATIONSHIPS INSTITUTE

Franchising as an emotional roller-coaster. The franchise relationship can be an emotional roller-coaster, both for franchisees and the franchisor executives that support them. Given all the attention they will have received during the recruitment and initial training process, a franchisee may start off feeling very happy. But they will soon be questioning, not just the value they are getting for their ongoing fees, but also the competence and intentions of their franchisor. At some stage they may even want to shake

After the franchise agreement has been signed, formal training and induction commences. While a franchisee is likely to be enthusiastic during training, they are also likely to forget 80 per cent of what they see and hear

Greg Nathan

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free of their franchise system’s procedures, believing they have a better way to do things. The Franchise Relationships Institute team has identified a business journey that has six stages. Stage 1: Investigation Most franchisees start their business journey investigating several business opportunities. During this Investigation Stage, they are asking, ‘Could this be the right business for me?’ while the franchisor is asking, ‘Is this the right person for us?’ The franchisee induction process actually starts here. The expectations being established in a franchisee’s mind will stay with them for the rest of their journey, which, according to current trends, is likely to be well past seven years. At this stage, franchisors need a checklist of attributes, and a method for assessing prospective franchisees against this checklist. Our research has identified a number of attributes that make a huge difference to a franchisee’s later success, such as family support, optimism, business acumen and sales potential. Stage 2: Initiation After the franchise agreement has been signed, formal training and induction commences. While a franchisee is likely to be enthusiastic during training, they are also likely to forget 80 per cent of what they see and hear. This stage is called Initiation because it is mainly about initiating the franchisee into your culture and your brand. In particular, you should put them through specific activities to educate them about what you stand for, and about the reputation you want them to build in their local market. Stage 3: Perspiration The shift from a sheltered training environment to the realities of difficult customers, unreliable staff, long hours and unpredictable cash flow will inevitably be stressful. The franchisee is now moving from a state of unconscious incompetence to a state of conscious incompetence, which can also be disconcerting. A franchisee in the Maturation Stage Because they are now sweating it out, we call this the Perspiration Stage! The main role of the franchisor at this stage will probably have worked with several is to provide practical support and encouragement, and to field consultants, heard numerous revisit the basics of running the business. Stage 4: Consolidation franchisor executives proudly roll My dad used to say that when you get a new car, the cream out a raft of new initiatives (some of motoring is between 10,000 and 30,000 kilometres. In business, we call this the Consolidation Stage, and it normally more successful than others), seen kicks in after one to three years. There is now a base of regular customers, the business has a steady cash flow and, providing a number of fellow franchisees come the customer experience is being delivered as it should, sales will continue to grow. and go, and been toughened by The franchisee is now moving from conscious incompetence to the ups and downs of running the conscious competence, which means they can take a breath, step back to review their progress, and reset their goals. business A franchisor can best support the franchisee by reviewing their business plan and helping them to improve their productivity

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The dictionary definition of reformation is: ‘An intended improvement in the existing form or condition of an institution or practices, to make a striking change for the better’. A franchisee in the Reformation Stage has made a decision to make a striking change for the better. This may be to reorganise or restructure their business, or to expand into additional units

and systems. Getting them into good business habits, such as The energy needed to initiate change should not be measuring key performance indicators, will also help them to underestimated. There are also likely to be many unknowns maximise their success. and risks, and franchisees need to be supported appropriately. This does not necessarily mean financial support; assistance Stage 5: Maturation with planning and mentoring can be more valuable. A thorough We are now likely to be five to seven years down the track. A business diagnostic can also be invaluable, especially if they franchisee in the Maturation Stage will probably have worked are moving into multi-unit operations. with several field consultants, heard numerous franchisor executives proudly roll out a raft of new initiatives (some more In many ways, the reformation stage will take the successful than others), seen a number of fellow franchisees franchisee back through the process of investigation come and go, and been toughened by the ups and downs of and perspiration as they come to terms with how the running the business. restructured business will function. And so the franchisee journey repeats itself, but at a higher level. In this sense, it They may not be cynical, but they are likely to be healthy is like a spiral of continuous improvement. sceptics, preferring to weigh up the evidence behind new ideas before making any commitment to invest time or money In summary, each franchisee is going to move through different into these. emotional and business stages. As they do, their learning and support needs will change. The nature of the leadership they While this can be an opportunity for a franchisee to take respond to will also change. If you are a franchisor executive, the time out and enjoy the fruits of their hard work, they can also question is: Are you flexible enough to meet this challenge? become complacent. This can be a dangerous time, especially if the business is successful, because maturity is almost always Greg Nathan CFE is a psychologist, author and Founder of the Franchise followed by a levelling out of performance, and then decline. Relationships Institute (FRI). FRI is a leading global provider of franchisee recruitment tools, franchisee satisfaction surveys and training programs The franchisee now needs to start planning for some type of for franchisors. For more information about FRI’s tools, publications and reinvention, before the decline sets in. The franchisor’s role learning programs, go to www.franchiserelationships.com. at this stage is to inspire and challenge them to work out a reinvention or succession plan. Stage 6: Reformation The Franchise E-Factor The dictionary definition of reformation is: ‘An intended improvement in the existing form or condition of an institution A model that Greg Nathan developed many years ago, or practices, to make a striking change for the better’. A called The Franchise E-Factor, breaks the emotional franchisee in the Reformation Stage has made a decision journey of a franchisee into six stages. Details of the to make a striking change for the better. This may be to Franchise E-Factor and its six stages – Glee, Fee, Me, reorganise or restructure their business, or to expand into Free, See and We – can be found at additional units. www.franchiserelationships.com.

THE FRANCHISETHE FRANCHISEREVIEW // SPONSOREDREVIEW ARTICLE THE FRANCHISE REVIEW

Q&A WITH EILEEN WALSH, DIRECTOR OF OPERATIONS & PROFESSIONAL SERVICES, ELITE HR PARTNERS (PART OF THE IHR AUSTRALIA GROUP)

Eileen Walsh is the Director of Operations & What are the particular HR challenges that are faced by Professional Services at iHR Australia. With franchise and multi-site operators (MSOs)? As franchise and multi-site operators are trading in various more than 20 years’ experience across regions and locations, it can be difficult to keep up-to-date with a broad range of senior HR leadership the relevant state and territory legislation for HR issues. roles, Eileen is now responsible for driving We conducted research last year among MSOs, and found that 32 per cent of surveyed organisations did not apply benefits iHR Australia’s Elite HR Partners, which and compensation practices uniformly at all sites and locations, provides an Employer Advisory Service and 22 per cent stated that recruitment policies were not consistent at all sites. So, clearly, consistency is an area that that is designed to support businesses by franchisors and MSOs can struggle to achieve in their approach providing expert human resources (HR), to HR. industrial relations (IR) and workplace Those with people management responsibilities within a relations advice on issues from everyday franchised business, such as a retail store manager, often need immediate advice but do not have easy access to an people management, performance and HR resource, so issues take longer to resolve, or become staff retention, through to high-risk sexual the responsibility of line or area managers who have little or no human resources training. So, there is often a knowledge harassment and bullying claims. Here, and experience gap that exists for staff handling HR issues Eileen shares her views on the specific HR across franchises. challenges and risks to franchise and multi- site operators.

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For franchisors that are looking for franchisees to invest, this Disputes and misunderstandings becomes more important than ever. How should franchisors and MSOs protect themselves from can occur in many areas, including these HR risks? HR issues can quickly become serious and costly, so dealing termination, award interpretation, with complaints and issues promptly is the main priority. performance, disciplinary action, Inexperience can lead to inappropriate handling and exposure to risk, so I cannot stress enough the importance of ensuring harassment, discrimination, adverse that you have a team with the experience to understand, analyse, interpret and ultimately know the steps that need to action, redundancies and Fair Work be taken. Commission issues This is the basis of how Elite HR Partners was born, and we have found that our Employer Advisory service has resonated in particular with franchisors and MSOs. We have a team of expert consultants with an average of 20 years of Human Resources and Industrial Relations experience between them. On-call In our research, we found that 38 per cent of surveyed MSOs access to that level of knowledge and professional experience is had staff turnover greater than 20 per cent – we would say invaluable for performance quality and risk mitigation. Internal that 13 per cent is in keeping with best practice. Over half HR departments should ideally be able to focus primarily on of the organisations admitted that the retention rate was also strategic organisational issues, and area and line managers markedly different in certain locations, suggesting site-specific with their own business imperatives. HR problems. So, again, maintaining HR consistency is one of the main challenges for franchisors and MSOs. What are the potential HR risks faced by franchisors? For franchisors, the scale of having businesses in various Our consultants assess the issues and locations means it can be hard to prioritise and respond promptly to the HR issues that are being faced at each and provide practical, immediately actionable every individual location, leading to frustration and issues potentially escalating. Disputes and misunderstandings step-by-step advice can occur in many areas, including termination, award interpretation, performance, disciplinary action, harassment, discrimination, adverse action, redundancies and Fair Work Commission issues, to name just a few. If franchisors are not properly equipped to handle and manage these kinds of One of our most significant partnerships has been with HR issues, it exposes the business to serious organisational, Specsavers, which has previously been awarded the Franchise operational and financial risks. Council of Australia’s ‘Established Franchisor of the Year’ and ‘Social Responsibility Award’, along with the Australian Retail They may be liable for severe compensation penalties, not to Association’s ‘Australian Employer of the Year’ award. We set mention significant damage to their brand and reputation. For up an on-demand service for the Specsavers store partners franchised businesses, the brand is a staunchly protected area, to contact us with their HR or industrial relations issues. as it is key to ongoing network and business growth. It’s not just Our consultants assess the issues and provide practical, about risk management; brand and performance are also key immediately actionable step-by-step advice. This has resulted outcomes of the HR function. in a large reduction in issues escalating into formal disputes, For example, we ask our new clients to describe how they wish and instilling greater confidence and skills in their store to be viewed as an employment brand. Many clients wish to be partners to deal with staff-related issues, through training and perceived as a fair, professional employer of choice; however, it development interventions that are then developed, based on is often an empty goal without the proper processes in place to the analysis and findings provided to the Specsavers People achieve it. Creating a strong employment brand means having and Organisation team. a clear commitment to key HR processes, such as onboarding, performance management, training and development, and so forth. If these processes are not in place or are inconsistently delivered, employees leave and, unfortunately, it can lead to negative market chatter and a weakened employment brand.

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Reaping the rewards at Bakers Delight

Q&A WITH GERRY GERRARD, GENERAL MANAGER OF BAKERS DELIGHT

Bakers Delight is one of the most Franchise Review (FR): Can you explain what you believe to be the reasons for the success of Bakers Delight? successful franchise businesses in Gerry Gerrard (GG): We’re always looking for ways to make the Australia, and this year is celebrating its customer experience delightful. 35th birthday. Franchise Review spoke Customer preference for authentic fresh bread, the with General Manager Gerry Gerrard about convenience of more than 700 bakeries across three markets, and our commitment to customer delight continues to fuel the Bakers Delight Franchise Model. business longevity and growth.

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FR: Why should potential franchisees apply with Bakers Delight? GG: Bakers Delight offers an established brand and products Bakers Delight offers an established that customers recognise, trust and love. Our franchisees have access to proven management and operational systems, which brand and products that customers help to establish profitable bakeries. recognise, trust and love For those starting out, investing in a Bakers Delight franchise removes the work of building a business from scratch, and provides a platform for a long-term career that offers a work/life balance and plenty of rewards. FR: What process do potential franchisees undergo prior to FR: You joined Bakers Delight in 2004. What is it about the becoming a franchisee with Bakers Delight? company that’s kept you there for more than 10 years? GG: We have a program called Manage To Own (MTO), GG: Firstly, I personally feel aligned to the culture that [Founders which is a franchise training program developed to take and co-Chief Executive Officers] Roger and Lesley Gillespie have potential franchisees on the journey to own and operate a created. The business has a terrific balance of being family-owned, Bakers Delight store. and community- and customer-conscious. It also encourages us to achieve the best we can in the varying economic, retail and Franchisees must undertake 12 months of comprehensive currency [fluctuating exchange rates] environments. training, including six months of franchisee training and six months of bakery management training. Following the Secondly, Bakers Delight continues to offer new opportunities completion of training, franchisees work with our recruitment and challenges to its employees, and I enjoy taking on more team on the opportunity to lease their own bakery. responsibilities if offered. For example, my role started off overseeing property and project departments, which quickly MTO graduates who successfully lease their own bakery for led into supply chain management, procurement, franchisee 12 to 24 months may purchase that bakery, or explore other recruitment and compliance. opportunities in the Bakers Delight network. My thinking for a successful career is: get involved, love what FR: How does Bakers Delight retain its staff, and ensure that you do, ride the ups and downs, and always take on more franchisees are getting value from their involvement with the when the opportunity arises. company? FR: Bakers Delight is involved in charity and environmental GG: We retain staff through ongoing support, training and work, and fundraising for various causes. Can you give us some mentoring. We assist franchisees with financial guidance, insight into these? marketing support, IT, food safety regulation and management training so they have the confidence to hit the ground running GG: Through our network, we donate approximately $143 when the time comes. million in bread to charities each year. We also offer national and local public relations and marketing This year, we are celebrating 15 years of supporting the Breast support to grow brand awareness and help to raise the profile Cancer Network Australia (BCNA). We also reached the significant of local franchisees within their communities. milestone of donating $15 million (in total) in funds and services to BCNA to support Australians affected by breast cancer. FR: How would you describe a day in the life of a Bakers Delight franchisee? The relationship between Bakers Delight and BCNA is really important to our business, and has become ingrained in our GG: The beauty of being a franchisee is that you can set culture. It’s a big part of who we are. your own work hours, and you can manipulate your time off. A typical day would generally include an early start to Our annual Bundraiser day also sees us raise funds for charity run the baking shift, followed by customer service during through the sale of hot cross buns. The money raised goes the ‘rush periods’ (community engagement and dealing with towards the purchase of essential medical equipment and people is a big drawcard for franchisees), managing staff, resources for sick children around the country. bookkeeping and running errands. Most Bakers Delight FR: Bakers Delight is looking for new franchisees to extend its franchisees finish work by 11 am to be with their families network within Australia and internationally. Can you tell us a bit and pursue hobbies et cetera. about the company’s expansion plans? FR: Can you tell us a bit about the Fresh Franchisee program? GG: Bakers Delight plans to open 15 new bakeries across GG: Fresh Franchisee is an internal training program that allows Australia, New Zealand and Canada in 2015. Bakers Delight employees to rise from the ranks within the We’re also seeking new franchisees to join the network as network to become business owners. part of a national recruitment drive, and we currently have 10 By identifying and fostering internal talent, we’re finding bakery ownership opportunities available across New South business owners who have a good, strong understanding of the Wales, Queensland and South Australia. business and culture.

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The beauty of being a franchisee is that you can set your own work hours, and you can manipulate your time off. A typical day would generally include an early start to run the baking shift, followed by customer service during the ‘rush periods’ (community engagement and dealing with people is a big drawcard for franchisees), managing staff, bookkeeping and running errands

Of those who complete the Fresh Franchisee program, ‘nostalgic’ career where they feel that they have a place in 76 per cent will either lease or buy a Bakers Delight franchise. the community. The program is available to employees who demonstrate the FR: What advice would you give to anyone looking for a career drive and inspiration to own their own bakeries. change who is considering becoming a franchisee? FR: According to a recent press release, there’s a trend in GG: If you enjoy working with people and you’re looking for franchise recruitment that sees white-collar workers return to greater work/life balance, you are well suited to a Bakers more grassroots businesses, such as bakeries. What do you Delight franchisee role. think has led to this trend? Initially, you need to be willing to work the long hours and put GG: It’s clear from those applying to be Bakers Delight in the hard yards; however, it won’t be long until you notice the franchisees that many middle-aged men feel trapped long-term benefits and reap the rewards. in desk jobs due to family and financial responsibilities. We’ve noticed an appetite among men from white-collar For those interested in becoming a Bakers Delight franchisee, or for backgrounds in particular who are keen to pursue a more information, please visit bakersdelight.com.au/franchise.

44 Are you a family PROFESSIONAL DEVELOPMENT business?

Many of Australia’s leading franchises are...

Is the majority of your business owned by a family or multiple families? Do family members work in your business? Are family members involved in the management of your business?

If you have answered yes to any of these questions, you are a family business! Family Businesses hold signiﬁ cant advantages over others:

• A greater return on investment Family Business • Positive culture “ Australia’s purpose • The ability to respond quickly is to contribute to the to changing business conditions long term success of family business.

You can harness these advantages Robin Buckham ” by engaging in professional CEO development for families in business.

Learn more about the opportunities available to your family business. Contact FBA at [email protected], call 1800 249 357 or visit us at fambiz.org.au THE FRANCHISETHE FRANCHISEREVIEW // SPONSOREDREVIEW ARTICLE THE FRANCHISE REVIEW

THE FAMILY FRANCHISE ADVANTAGE

Many of Australia’s franchises are sitting on an untapped secret to better business – the family franchise advantage. Many franchise owners, both franchisees and franchisors, are families in business.

Lesley Gillespie and husband Roger of Bakers Delight in their Camberwell bakery

Ella Baché, one of Australia’s most established and recognised prosperity, but also the success of families across Australia, skincare brands, began and continues as a family-owned that consumers connect with and trust. business, in addition to 40 per cent of their franchises that are On Ella Baché’s postgraduate program, Pippa’s genuine also family-run. care is evident: ‘This [program] allows us to have a long-term Pippa Hallas, Chief Executive Officer, and her father John, relationship with the students,’ Pippa says. ‘In some cases, sole owner and chairman, maintain the aspiration to continue the students go from graduation, into working in an Ella Baché as a family business, and to be the most premium skincare salon or department store, before eventually owning their own franchise in Australia. ‘We were the first Australian skincare stores – and we encourage this.’ The importance of long-term brand to franchise, and it is important we keep being relationships – developing and investing in Australia’s talent innovative, meeting the changing needs of our customers – in Ella Baché’s business model is similar to those values in and maintaining leadership across our products, education many families. programs and retail models,’ Pippa explains. Another of Australia’s well-known family franchises, Bakers Family businesses in Australia are known for their ongoing Delight, also has the unique position of being a family business commitment to improving their industry, their community franchisor, working with many franchisees that are also family and Australia’s economy. This sentiment is highlighted by businesses, often sharing in the complexities of working in an the fact that Ella Baché currently offers undergraduate and environment where both family and business values are at play. postgraduate education for aspiring skincare professionals. It is this genuine commitment to improving not only their family’s

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Lesley Gillespie, joint Chief Executive Officer of Bakers Delight sector. Pippa says that FBA assisted her in taking on the role with her husband Roger, works with her entire immediate of CEO. ‘FBA provided me with great opportunities to network family. Their two children work within the company, with Aaron with other people in similar situations and share experiences. (35) working in Canada for the COBS Bread brand of Bakers It also assisted me in setting some ground rules in my working Delight, and daughter Elise (33) in a General Management relationship with my father,’ Pippa says. position of Operations and Marketing in Melbourne, as well as Lesley recently spoke at an FBA event in Queensland, presenting her Elise’s husband, David Christie (32), who also works for the firsthand advice and insights on leadership. For more opportunities to business in a senior operations role. network with successful family businesses, visit www.fambiz.org.au or Lesley commented that one of the greatest advantages of being call 1800 249 357. a franchisor and a family business was that they could be A good place for families in business to determine the opportunities more nimble when making business decisions, compared to a and risks presented to their business is by using the Family Business publicly listed company. ‘An integral part of our business model Diagnostic Tool. This free resource is available at is to buy and sell bakeries. Generally we would own between fambiz.org.au/resource-centre. five and 10 per cent of the bakeries at any one time,’ Lesley explains. An example is the Mango Hill bakery in Queensland, where they financed the opening of the bakery themselves, allowing the franchisee time to source their own funding. In the case of Ella Baché and their family-run stores, there are often unique advantages based on the culture, relationships and longer-term strategic plans in place, as opposed to short- term financial goals of some corporate companies. ‘As a result of the strong relationships and passion that people feel for their family businesses, there is often a level of ownership and engagement that even our external consultants recognise right away,’ Pippa explains. Despite this, both business leaders agreed that there were certainly challenges in being a family business, saying that navigating the complexities around where work finishes and family starts can be tough, and that the strength of the family business in terms of the relationships and passion involved can mean that having difficult conversations, or delivering ‘tough love’, can be hard. In terms of advice for families that own a franchise or are thinking about it, Lesley explains that ‘no matter what franchise a family owns, there are always opportunities to grow and develop’. Pippa recommends that family businesses use the untapped strength of being a family business. ‘Leverage the strength of being a family business, including your networks, culture and people involved. When family members are engaged and empowered in the business, they are more likely to take ownership and flourish,’ Pippa explains. Organisations such as Family Business Australia (FBA) present families in business with opportunities to harness the advantages that are presented to them as a family business. Research shows that family businesses that undertake consistent professional development can ensure that they maintain profit, grow productively and manage a successful transition of business ownership. Pippa has been a long-term member of FBA, and a recipient of the Next Generation award in 2012 for her contributions to Pippa and father John Hallas of Ella Baché at their Manufacturing and Ella Baché in her role as CEO, as well as to the family business Distribution Centre, Sydney where products are made and packaged

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An inside look at the International Franchise Convention

Each year, the franchise calendar begins with the annual pilgrimage to the International Franchise Convention. This year, the event returned to its spiritual home of Las Vegas.

The Franchise Council of Australia (FCA) contingent saw a return to strong numbers in 2015, with more than 40 delegates in attendance, including three of the five Aussie Certified Franchise Executive (CFE) graduates from 2014. Sara Pantaleo (La Porchetta), Peter Baily (Luxottica) and Franchise Hall of Famer John O’Brien (Poolwerx) were all honoured at a ceremony recognising CFE graduates from across the world. Attendee and graduate Sara Pantaleo, from La Porchetta, spoke highly of the accreditation program, and of the ceremony at the event. ‘The CFE study modules are very robust and provide amazing learnings to bring back to your business. The FCA should be commended for linking their education to this system. It enables franchise executives to continue their education at the highest level, and gain international know- how and best practice.

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‘The International Franchise Association (IFA) really knows how issues, with franchisee recruitment and finance key among to make you feel special for having achieved CFE certification, their challenges,’ Mr De Britt said. and I thank them for all their efforts in organising a fantastic The IFA Convention itself packed a mighty punch, with 3800 presentation,’ Ms Pantaleo said. delegates from 49 countries in attendance across three days. As part of the convention, the FCA delegation was treated to Keynote speakers included Arby’s Chief Executive Officer an exclusive half-day seminar designed for Australian brands Paul Brown, and Walmart Chief Executive Officer Mike Duke. looking to expand into the United States, as well as the World Strategists from Google were also in attendance (hot insider Franchise Council (WFC) proceedings, which were held at the info: there is a department in Silicon Valley called Google X same venue. where secret developments happen!). FCA General Manager Kym De Britt said that networking with The FCA delegation came away from the event inspired and 32 other national franchise associations attending the WFC educated. Director of FC Business Solutions Corina Vucic meeting was invaluable, and he was particularly interested to enjoyed both the operational learning outcomes and the top- learn about franchising in Canada. ’The Canadian association line view for business growth that conventions like this deliver. seemed to really mirror Australia in terms of growth areas and

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‘The IFA reinforced the life learning attitude [that] each and every one of us must possess to lead and grow successful, relevant and sustainable businesses,’ Ms Vucic said. Sara Pantaleo believes that there is something at the IFA Convention for everyone. ‘The IFA conference is great value if you want to upskill yourself, or if you are looking at international expansion. It’s designed for all levels, and includes streams for franchisors, franchisees and operations. Emerging systems were covered, as were established franchises. Throughout the sessions, there was a focus on best practice, excellence in customer service, and the need for innovation,’ Ms Pantaleo said. Following the Convention, a small group of FCA member franchisors embarked on the third annual FCA US Study Tour. Leaving Las Vegas for California, franchisors visited malls, stores and head offices, covering a variety of United States-based franchise brands, including Instant Imprints, Jazzercise, Panda Inn and Johnny Rockets. The group was also treated to a tour of the Oakley at Luxottica Brand Headquarters, which are inspired by the Mad Max film set. The FCA US Study Tour is held immediately following the IFA Convention each year, and is designed to be a behind-the-scenes look at how franchise brands in the United States do business. It is open to franchisors, founders and Chief Executive Officers only, and applications open after the National Franchise Convention each year. See the next issue of Franchise Review for an in-depth look at the tour.

50 NATIONAL FRANCHISE CONVENTION 2015 11-13 OCTOBER GOLD COAST growth expansion&

NFC15 promises to build your knowledge on all things franchising to help ensure your business flourishes in any conditions. The must-attend event for all franchise professionals in Australia, NFC15 will once again provide an impressive array of inspirational speaking talent and ample networking opportunities. Join hundreds of Australian franchisors for the franchise networking event of the year. For sponsorship and exhibition opportunities, call Angie Cooksey on 1300 669 030, email [email protected] or go to franchise.org.au

The FCA gratefully acknowledges the contribution of the following sponsors for NFC15

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Meet the Young Entrepreneurs in Franchising winner

Q&A WITH RHYS RICHARDS, WINNER OF INTERNATIONAL FRANCHISE ASSOCIATION’S NEXTGEN COMPETITION

The Young Entrepreneurs in Franchising Competition targets students and young entrepreneurs around the world, addressing a youthful global population to get them involved in franchising. Winning entrants in this year's competition were flown to Las Vegas for the International Franchise Association's Annual Convention in February, where they attended the NextGen in Franchising Summit – an educational program for the next generation of entrepreneurs. Franchise Review spoke with Australia's winner, Rhys Richards.

Franchise Review (FR): Congratulations on your recent win. How does it feel to have been chosen as one of 50 winners from around the globe? Rhys Richards (RR): It is a privilege to be able to represent Australia at the IFA convention in Las Vegas, and being able to have the opportunity to liaise with and learn from the best minds in the franchising industry is very exciting. To be recognised as one of the first Young Entrepreneurs in Franchising global winners will allow me to discuss new franchise concepts and new ways of taking franchising into the future, as well as giving me the opportunity to attend roundtables and learn about the latest trends in the franchise industry, which will benefit me enormously in my current and future roles. FR: You ran a Japanese restaurant for eight years before embarking on your current business venture. What initially drew you to being interested in franchises? FR: Your franchise pitch was to ‘Expand an Existing Franchise’. What does this specifically entail? RR: [I was interested in a] new business venture – actually, I recently became a Business Consultant and Business Broker RR: I was fortunate to read a post on social media by the for LJ Hooker Business Broking. This position appealed to me Franchise Council of Australia’s Education Manager, Simon because I’ve had my own experience operating a business in Heggen, which led me to enter the contest. the past, and the office has a strong focus on franchises. The competition, administered by the Youth Success Network I had a fantastic opportunity to live in Japan when I was on behalf of the International Franchise Association, asked younger, where, not only did I learn the language and culture, applicants to submit a pitch. but I also learnt that there was a 7-Eleven convenience store on every corner! I enjoyed the vibrant nature of franchised My pitch involved taking a franchise that is at a mature stage outlets in Japan, and since returning, I’ve taken a closer look in the market, and looking to acquire or cooperate with another at franchised businesses, and I always enjoy attending the franchise that is relatively new to the marketplace – one that franchise exhibition in Sydney. is increasing its momentum in its space, and gaining market share rapidly. Having these two companies working together

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would not only let the newer of the two brands grow even more FR: This year’s theme for the IFA Convention in Las Vegas was rapidly, but the infrastructure would already be in place to ‘Connect, Innovate, Evolve’. What do these three words mean support new, as well as existing, franchisees, which is critical to to you, and why do you think they are important to franchising? a successful franchise. RR: Connect – It will be exciting to connect with the best in Other possible options would be a hybrid menu for the the industry and build a relationship with them, as well as with stores, potentially increasing customer spend. Benefits the attendees of the convention. By expanding our networks, would include a reduction in operational costs as well as further opportunities can arise to grow our business. hopefully bringing more traffic through existing outlets, Innovate – Innovation is important to every business. In order leading to an increase in sales. to keep ahead of your competition, it’s so important to be at the FR: Globally, youth employment is a big issue. Do you think forefront of any decisions made. it is important for young people to be aware of the benefits Evolve – To develop is key to success for any franchise; of entrepreneurship? What are the risks involved in taking however, it’s important to not expand too quickly, and to have the plunge? the systems in place to manage every facet of the business. RR: Young people should definitely be aware, [because] being FR: You’ve certainly had a successful past year. What’s next for able to be in control, and being able to pursue something that you in 2015? Do you have any other ambitions that you would you’re passionate about while reaping the financial rewards, like to pursue? are just some of the benefits of entrepreneurship. RR: It would be great to be able to connect with franchisors There are, however, associated risks – financial as well as and franchisees in Australia to develop and assist budding personal risks. The amount of time and effort needed is entrepreneurs to gain experience in their stores, and to develop usually a lot more than if you were to work for someone else, a model to limit the potential risk of failure to those young as opposed to working for yourself; therefore, the support entrepreneurs who wish to take an equity in a franchise that networks around young entrepreneurs are essential, as is being they are passionate about. provided the right information on business-related issues. In my current role, I hope to further gain valuable knowledge It would be great to see franchisors and their franchisees about the industry so I’m more adept when assisting buyers in get on board and engage more with the next generation of finding a new franchise suitable to their needs and experience, franchising industry leaders and entrepreneurs. This could be as well as assisting franchisors in finding new buyers for both a way of providing training in stores or head offices, as well as new and existing stores. having possible co-owned stores whereby a 25, 50, 75 and 100 per cent staged ownership option through vendor finance For more information on the NextGen competition, and to keep updated will reduce the risks of failure, while the young franchisee gains for next year's event, visit www.nextgenfranchising.org experience in their franchise role.

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DEAL LOCAL, INSURE GLOBAL

Attracting more and more of Australia’s best-known franchise businesses, National Franchise Insurance Brokers (NFIB) is an insurance force to be reckoned with.

Now represented in New Zealand by one of the largest INSURANCE PLATFORM broker networks in that country, and following on from For those of you not familiar with NFIB, they offer a web-based discussions with insurance brokers around the world, NFIB insurance platform that has been designed exclusively for all Executive Director Darryl Morris says, ‘NFIB continues to grow kinds of franchised businesses around Australia. What’s central internationally, and we’re at contract stage with a number to NFIB’s success is twofold: inexpensive insurance premiums of other countries globally. This will be of great benefit for regardless of the franchised business being insured, and the franchisors here in Australia, particularly those that have ease at which a franchise business can insure their business. international operations. What makes insuring with NFIB so easy is the fact that there ‘This means that the franchisor can deal locally if they wish, are only four basic pieces of information required in order to but have international representation, all through the same arrange cover for a franchised business: insurance program and technology platform.’ 1. the replacement of plant, equipment or stock With insurance solutions designed to complement franchisor 2. the gross profit of the franchised business activities, NFIB can remove the headache of audit and compliance needs, along with the documentation it entails, 3. the level of public liability required by the franchised business all of which means the franchisor does not have to apply the 4. whether machinery breakdown is required by the franchised resources in-house. business.

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Plus, there isn’t any paperwork, and there are no forms to in his group’s ability to provide the most competitive and complete or signatures required. It really is quite a simple and comprehensive insurance costs available. ingenious process. ‘We all hate getting insurance premium renewals. That’s a fact ‘We spend a great deal of time and effort travelling around the of life. People want the most adequate cover for the lowest country speaking to both franchisees and franchisors, and their possible price – it’s as simple as that. What we’ve focused on feedback is extremely positive,’ says Morris. ‘Our online system from the beginning, and what is still central to everything we allows the franchisor to make sure that all of their individual do today, is to make sure our customers save money on their franchisees’ businesses have adequate insurance cover. From business insurance,’ Mr Morris says. the franchisees’ perspective, our ability to “bulk buy” insurance cover means their costs are significantly reduced when compared to what they may have paid for insurance in the past.’ For more information about National Franchise Insurance Brokers, please contact Darryl Morris or Brad Dixon. With a total commitment to understanding franchisor/ Phone: 1800 776 747 franchisee insurance expectations, Mr Morris says that Email: [email protected] he strongly believes that the future of the business lies Web: www.MYNFIB.com.au

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Are you a lender-friendly brand?

BY DARRYN MCAULIFFE, CEO, FRANDATA AUSTRALIA

Franchise finance access is a recurring lender. Most non-accredited lending is treated as generic small business lending due to the lack of reliable information and frustrating theme; however, a number available on the brand, which gives little credence to the of encouraging signs are emerging that underlying support or improved risk profile that a well-managed franchise brand can bring. Lenders normally only proceed if suggest better times ahead. Positive transactions are supported by significant cash contributions or indicators include increased investment collateral property security. in franchise banking, the availability Banks see franchise lending as an important part of their small of information through the Australian business strategy, and are keen to deepen relationships with franchise brands that can provide a transparent performance Franchise Registry™, multiple new history. The greatest inhibitor to the bank’s lending reluctance franchise-brand bank accreditations, and is the perceived inability of franchisors to provide timely, detailed and reliable insights into their operations. an improved sector outlook through the Lenders provide finance with more favourable terms to brands revised Franchising Code of Conduct. deemed to be ‘lender-friendly’, and franchisors can position themselves this way if they embody lender-friendly traits. Franchise finance is of great importance, as the majority of Traits of lender-friendly brands include: franchisees need to borrow to complete their transactions. There has been a growing trend for franchisors to directly • the desire to be identified as a genuine and quality fund or indirectly support new franchisees, but this is not franchise brand necessarily a sustainable practice. It can also create a number »» Franchise Council of Australia membership is an of risks, including potential conflicts of interest and inadvertent excellent indicator that brands are serious about their breaches of franchisor lending conditions and loan covenants. reputation and that of the franchise sector – it recognises the importance of a Major banks continue to dominate Australian franchise unified, representative voice, and the financing, with transactions typically falling into one of two role that improved information plays categories: ‘accredited’ or ‘non-accredited’ lending. in supporting that representation ‘Accredited’ status is generally granted to brands that meet • the ability to provide lender certain minimum requirements and have been through information in a timely and a comprehensive review process. Accredited brands are transparent manner allocated dedicated bank contacts, and their franchisees enjoy » lending applications more consistent and predictable treatment. Subject to regular » can be declined due to review, accreditations do get withdrawn when loan quality falls the lender’s inability below an acceptable level, or when an insufficient number of to access the most transactions are achieved to cover the cost of maintaining the basic level of brand accreditation status. information. Brands The majority of franchise brands find accreditation elusive, with need to either most major banks having less than 50 brands accredited. This provide lenders with represents less than five per cent of the reported 1100 active independent, reliable brands operating in Australia. and relevant information, or use information gateways ‘Non-accredited’ lending is considered on a case-by-case like the Australian Franchise basis. This approach can be inconsistent across not only Registry™ to optimise different lenders, but also through outlets within the same lending decisions Darryn McAuliffe

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• a sound financial position (franchisor) »» a willingness to both share financial information to provide insights into the strength of the franchise model and its capacity to endure fluctuations in trading cycles, A common judgement error made and to support its franchisees by many inexperienced franchisors • a disciplined and successful approach to recruiting, training and supporting franchisees is the reluctance to disclose or »» the ability to demonstrate a structured and proven approach for single-unit or multi-unit franchisee success provide details on adverse events • the ability to provide insights into unit performance or issues (franchisees) »» these insights help lenders with loan structuring considerations, and provide effective and early warning signs for potential problem loans • the ability to provide insights into the secondary market (unit resale values) adverse events or issues. Lenders recognise that brands have ‘learning experiences’. They are very interested in any insights » the provision of real and complete comparative market » franchisors can provide on how these were discovered and data significantly enhances a lender’s ability to recognise addressed, and resulted in revised strategies. It is actually the value in a franchise business these events that can significantly enhance a brand’s risk • the ability to work constructively with lenders if expectations profile, ultimately improving finance access. are not being met Improved finance access awaits brands that can effectively » strong working relationships between banks and » communicate the strength of their brand to lenders. It is franchisors result in superior outcomes and reduced brands that demonstrate a superior risk profile and a strong losses on problem loans. The risk that franchisees may business development opportunity that are being rewarded underperform is not the key issue – it is the actions the with easier finance access. franchisor will undertake if that situation arises. A common judgement error made by many inexperienced Darryn McAuliffe is the CEO of FRANdata Australia, which administers franchisors is the reluctance to disclose or provide details on the Australian Franchise Registry™.

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IS FRANCHISING A VALID MODEL IN THE CONSTRUCTION INDUSTRY? Any builder will understand the difficulties and pressures faced when running a small business, particularly in such an aggressively competitive industry as residential construction.

With the current strength of the Australian construction So, how does franchising in a construction business work? industry, one of the biggest challenges is maintaining ‘I had reached a point in my own building company where profitability in the face of significant growth in turnover and I had to either grow my business or revert back to being a building numbers. Managing an erratic cash flow, home subcontractor to the larger building companies. By joining G.J. indemnity insurance pressures, and a constantly shifting Gardner Homes, I immediately gained the buying power and supplier and subcontractor base all add to a builder’s woes. marketing support of a volume building company,’ says Kris Gill, G.J. Gardner Homes developed its franchise model in 1995, after Bendigo franchise owner. ‘I am surprised at how much I have founder Greg Gardner built more than 800 homes throughout changed from a tradesperson who was running a small building Queensland as a privately owned builder. The basis of the company, to a businessperson running a larger company.’ franchise model enables builders to manage significant growth in The cliché runs true that to achieve growth, business owners their turnover and develop a sustainable, saleable business. need to spend time working on the business rather than in the The G.J. Gardner brand partners with licensed home builders business. The G.J. model shifts the home builder’s focus away who are looking to expand from building five, 10 or 20 homes a from day-to-day construction issues to developing a strong year, and provides them with the systems, software, marketing and ongoing sales methodology with a two- to five-person sales platform, plan range, training and support to build four to five team. The software and systems allow the franchise owners to times that amount. manage the construction of a higher volume of houses, and keep their focus on sales and business management. Now, 20 years on, the G.J. Gardner Homes model is the largest and most successful home-building franchise in Australia and G.J. works with builders to think long-term around their brand internationally. Still very much a family business, with 135 in the market and a display home strategy with finance options, builders across Australia, New Zealand and the United States, and assists with the recruitment and training of salespeople G.J.’s has expanded on the back of ensuring the sustainable who ultimately drive the success of the business. but ongoing growth of every franchised builder.

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In order to be price competitive, there is a lot of value to be on any members of the group for any issues or problems we gained from high-volume supplier agreements. G.J. Gardner have; most of the guys have been in the franchises for a long Homes built more than 1300 homes in Australia last year, time – and the group itself, as far as systems and backups – it’s and as Australia’s eighth-largest detached-home builder, has all there for you.’ access to some of the best pricing available. After 20 years of franchising, G.J. Gardner Homes now has a ‘After a lot of research, we decided to jump in the deep end goal to become the largest home builder in Australia by 2019, with G.J. Gardner Homes, and we haven’t looked back since. and is looking for the right builders to join the company on this It enables you to handle volume, and we just couldn’t be journey. G.J. Gardner Homes’s aim is to assist you in growing where we are now with the number of builds going on at once, your business by incorporating your building experience and and the number of slabs we’re getting down each year without drive for success with its business systems, national branding the structure and support that the software gives you. We’ve and marketing expertise. gone from a company four years ago doing 10 homes, to If you would like to find out more, please visit this year doing 50 homes.’ Sean and Nathan – G.J. Gardner www.gjgardner.com.au/franchise or contact Peter Love, Australian Homes Shoalhaven. General Manager at [email protected]. Franchising your business is a big step and a calculated risk; however, the G.J. Gardner franchise system is dedicated to the success of our franchise partners. A survey of current builders who have joined the Australian G.J. team has found that, on average, their revenue has increased by 400 per cent three years after joining G.J. Gardner Homes. The G.J. Gardner Homes model gives builders the tools to achieve significant scale and growth in their businesses. They join a community of business owners dedicated to becoming the most highly regarded home builders in their communities, and contributing to the growth of the G.J. Gardner Homes brand. ‘One of the major advantages we’ve found of coming from a small builder doing a few homes a year is the system – to come into using a fully integrated system, from sales, right through estimating linked to accounting, has been a great step forward. We use all parts of the system to its full potential, and the time we now save has been unbelievable,’ says Rob McMaster, franchise owner, Ballarat, Victoria. Chris Dell, a franchise owner in Launceston, Tasmania, says: ‘One of the best business decisions we ever made. We can call

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Australia’s leading provider of physiotherapy and related services rises to the challenge of ensuring franchise owners maintain brand integrity.

Back In Motion’s sights are set on expanding further across the country and more than doubling their practices in the coming years, therefore maintaining brand integrity is imperative. As with any business objective, brand integrity requires resources that can be delivered in-house or outsourced. To achieve this objective a broad range of factors must be taken into account, such as; accurate reproduction of logo and brand elements, colour consistency, uniformity of paper stock and ﬁnishing options, ensuring collateral is produced in the correct format, maintaining a high standard of image resolution and that all information published is current and correct. In of itself this is a lot of work, but multiplied by dozens of locations across Australia, using a multitude of different printers, it becomes impossible to guarantee any sort of consistency for a brand that new practices are buying into. “Whirlwind provides our business a holistic print solution with their OPM platform and a dedicated This is where Whirlwind Print comes in. Account Manager. The convenience of the platform, Whirlwind’s Online Print Management system (OPM) customer service and cost effectiveness are all enables Back In Motion to easily provide nationwide reasons that I would recommend Whirlwind.” marketing support to their practice owners. 100% of Natalie Whittington practices choose to use the OPM, which is a resounding Marketing, Communications and Public Relations Manager testament to the capabilities of the system. Back In Motion

This successful print partnership delivers: • Consistently excellent print • Templates enable franchise owners • Collateral can be ordered and • Head Office maintains brand to customise their collateral to paid for online whenever franchise integrity whilst providing flexibility to reflect individual store details owners need it franchise owners • Time and cost savings with • Stores take advantage of • At a glance, franchise owners can pick-and-pack marketing campaigns locally see all available collateral

www.whirlwindprint.com Read the complete Case Study on our blog. blog.whirlwindprint.com

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Franchisee recruitment tips for franchisors

BY PROFESSOR LORELLE FRAZER, DIRECTOR, ASIA-PACIFIC CENTRE FOR FRANCHISING EXCELLENCE

Franchisee recruitment is an ongoing challenge for the majority of franchisors, so to assist franchisors with the process, I’ve put together five quick tips:

Franchisee recruitment tip #1 Provide potential franchisees with a work experience trial Where appropriate, franchisors should consider providing potential franchisees with a work experience trial. Providing a prospective franchisee with an opportunity to actually work in the franchise before signing the franchise agreement allows both parties to assess each other’s capabilities. Franchisors can see what the franchisee is like in action, and can get a better feel for their personality and how they handle the pressure, as well as whether they’re going to be a good fit for the franchise. The franchisee, on the other hand, can get a real taste of what it will be like being part of the franchise. For example, a franchisee might like dogs; however, after three days straight of washing dogs, they may realise they’re not really the right fit for the franchise – or they may be more passionate than ever! Franchisors want to ensure that franchisees are a good fit for the franchise, that they’re likely to be able to follow the systems, and that the franchise is the right fit for the franchisee, too. There’s no point in recruiting someone into your franchise who is going to lose interest after a few weeks, as these potential franchisees are not going to have the drive to make their franchise a success. Your experience with such a franchisee could also adversely affect your franchisee recruitment process in the future when you’re contacted by other prospective franchisees. Franchisee recruitment tip #2 Recruit franchisees from within existing franchise staff Recruiting franchisees from within the franchise business has worked well for franchisors who have adopted this approach. There are several benefits to this method over recruiting new people into the franchise.

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Our research shows that franchisees with small business ownership experience often make superior franchise operators

One benefit is that the franchisors have had time to get to know Franchisee recruitment tip #4 the skills and abilities of their staff members, so they’ll know Recruit people with small business ownership experience who the reliable, high-performers are – these are the ones who Our research shows that franchisees with small business will make good franchisees. ownership experience often make superior franchise operators. Existing staff will already know the franchise business They already have a good understanding of business, so there’s operations, so they will require less start-up training. They also less for them to have to learn. have loyalty towards the brand. Becoming a franchisee can also make business easier for This approach also provides the staff with an opportunity to grow independent operators, as they can access support from with the brand, rather than having to look outside of the business the franchise head office, including marketing, economies for further growth opportunities; franchisors can expand their of scale for any products used, environmental scanning and franchise while also retaining the talent within the business. opportunities analysis. Franchisee recruitment tip #3 This may involve conversion franchising, where a franchisor Reward good franchisees with additional units/territories approaches existing independent operators in their industry to Rather than looking to recruit new franchisees, it may be become franchisees. appropriate for franchisors to consider offering some of their most successful franchisees additional territories or units, if it’s Franchisee recruitment tip #5 appropriate for the franchise model. Seek out people who have strong personal drive Strong personal drive is one of the top characteristics you can Again, there are several benefits to this approach: look for in a franchisee. • The franchisor already has an existing relationship with the Our research shows that people with strong personal drive franchisee. make superior franchise operators, so during franchisee • The franchisee has already proven him/herself to be a recruitment processes, franchisors should select people who high performer. can demonstrate this trait. • The franchisee already knows the systems and operations One way to assess strong personal drive may be through of the business. psychological testing, such as using the Myers–Briggs Type Indicator assessment, or another personality test system. • It provides the franchisee with opportunities for growth and greater profit potential. People with strong personal drive are those who set goals and achieve – or even over-achieve – them. They are also the type • The franchisor will have fewer franchisees to manage than of people who don’t get despondent when something goes they would if new franchisees were recruited for each wrong, rather seeing the situation as a challenge that motivates site or territory. them to perform better. This can be a very effective method for franchisee recruitment Franchisors will really benefit from identifying these people and franchise growth; however, franchisors need to cater for during their franchisee recruitment processes. multiple-unit franchisee field support needs. Professor Lorelle Frazer is the Director of the Asia-Pacific Centre for Multi-unit franchisees require different types of field support to Franchising Excellence at Griffith University. The Centre was created single unit operators, with a greater focus on human resources in 2008 with the goal of consolidating and combining the wide variety and other areas; a multi-unit franchisee needs to move to a of information available for franchisees and franchisors. In addition to more complex management role and will therefore need to this wealth of practical franchising knowledge, the Centre also offers a develop greater skills in business management. They will need wide range of franchise courses (online and face-to-face), professional support to move from constantly working ‘in the business’ development events, online seminars, research reports and more. See to working ‘on the business’, where they will need to build more at: www.franchise.edu.au. effective teams and learn how to delegate.

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FCA Events Calendar

Now that the year is in full swing, there are numerous breakfasts, roundtables and education sessions you can attend, along with FCA programs that you can participate in.

As a member of the FCA, you are entitled to some of Queensland these events exclusively and free of charge, and some at members-only prices. The Awards program is exclusive to April FCA members. Roundtable: Learning and development for time-poor franchise executives – efficient techniques to maintain your professional development – 16 April National Events Education course: Effective Franchisee Recruitment National MYOB FCA Excellence in Franchising Awards – 28 April categories open – 13 April National MYOB FCA Excellence in Franchising Awards May categories close – 8 June Education course: Improving Franchise Advisory Councils NFC15 – Sunday 11 October – Tuesday 13 October – 7 May MYOB FCA Excellence in Franchising Awards Gala Dinner Education course: Introduction to Franchising – 22 May – Tuesday 13 October Certified Franchise Executive Program – ongoing June National awards entries close – 8 June National awards entries close – 8 June July Event: Franchising and Business opportunities Expo

New South Wales April Education courses: Site Selection and Territory Planning – 16 April Roundtable: Preparing your franchise for sale – 29 April May Roundtable: Increasing Franchisee Turnover – 14 May Education course: Introduction to Franchising – 28 May Education course: How to Organise a Franchise Conference – 29 May June National awards entries close – 8 June

Australian Emerging Franchisor of the Year 2014, Shingle Inn

63 THE FRANCHISE REVIEW

Victoria Western Australia

April May Education courses: Site Selection and Territory Planning – 21 Morning Coffee Catch-Up: How the new Code is impacting on April franchise systems May June Forum: FCA Field Forum – is your field team relevant and Morning Coffee Catch-Up: Spending your marketing dollars effective to the current needs of your business? – 19 May wisely – 4 June Education course: Introduction to Franchising – 26 May National awards entries close – 8 June Education course: Improving Franchise Advisory Councils Franchisee Breakfast: On the couch with franchisees – 27 May – 23 June July June Morning Coffee Catch-Up: Marketing funds – the legal Do’s Breakfast: Franchisee Recruitment – 2 June and Don’ts – 2 July National awards entries close – 8 June Forum: Using Data to Improve Your Decision-Making – 16 June Events held by and in conjunction with the Franchise Council of Australia are designed to be informative and educational, along with providing ample networking opportunities. Meet franchisors, management staff and experts in the sector to South Australia discuss issues relevant to your brand and your career. April *NB – Breakfasts, forums, roundtables and education courses are Education course: Effective Franchise Recruitment – 22 April being added to the national calendar all the time. To see the most up- Education course: Managing Franchisee Underperformance to-date version of the calendar and register for events, go to – 23 April www.franchise.org.au/event-calendar.html. June National awards entries close – 8 June

MYOB FCA Excellence in Franchising Awards Night FCA events are designed to be educational and provide plenty of opportunities for networking

64 The hairdressing industry in Australia is worth over $75 Million each week Get your cut!

Introducing the new kiosk

Just Cuts™ is such a fun, flexible place to work and all my Stylists start and finish on time every day. Personally, I love it because it is just cutting. We have no appointments, Clients just walk in and they love how convenient it is. All the systems and tools are in place and I was able to get finance quickly and easily! Lilydale, VIC Just CutsTM Kiosk Owner NS

“Just Cuts™ has changed my life for the better! This is my second Just Cuts™ salon that I own and operate and I have done it all within 18 months. The Just Cuts™ community are very welcoming and salon Owners help each other along the way. It’s great to be part of a growing franchise that still remains a close knit group - when we say we are like a family it’s because we are! We have a fantastic network of fully qualified Stylists, and I love coming into work every day. I look forward to what my future holds with Just Cuts™!” Mornington, VIC Fixed franchising fee • Just CutsTM Kiosk Owner RH Flexible finance options available • Balgowlah, NSW Just CutsTM Kiosk Owner Only 49 sites available Australia wide • BT, 19 years of age Business coaching and ongoing support • Create your own lifestyle from $85,000! •

Visit www.justcuts.com.au/franchising On average, Just CutsTM Franchisees own 2.3 salons each • or call Brianna 0488 380 222 Exclusive access to our professional retail brand, made in Europe •

Just CutsTM is the largest hairdressing network in the southern hemisphere. Australian owned and franchised for 25 years, you can join our network of 80 existing Franchise Owners who collectively own over 186 salons and service over 80,000 Clients per week!