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THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS Success
Franchise opportunities with an iconic brand THE RIGHT Leadership Welcome MIX ACROSS THE Generations Welcome Thank you for your interest in Bakers Delight. We’re delighted that you want to learn more about our company.
Bakers Delight is an Australian icon and has grown to become one of the world’s most successful bakery franchises. The company’s success is due to the quality of our ingredients, proven systems, ongoing innovation and a passion to delight customers with superior bread and warm service. At Bakers Delight we’re committed to a mutually rewarding relationship with our franchisees, employees and suppliers. When considering Bakers Delight, we urge you to visit our franchisees, speak to regional staff and seek independent advice. Joining the Bakers Delight family could be one of the best life decisions you ever make.
David Christie Elise Gillespie Joint CEO Joint CEO
BAKERS DELIGHT HAS BECOME ONE OF THE WORLD’S MOST SUCCESSFUL BAKERY FRANCHISES
3 FIND ALL THE RIGHTContents
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS Welcome 3 Our Philosophy 6 • Vision • Mission • Values
A Recipe For Growth 6 Your Opportunity 8 Family Time 12 Our support 14 • Group Management • Operations • Marketing • Property • Projects • Purchasing • Human Resources + Training • Information Services + Support Our Training Program 16 Our Promise 19 • The Franchisor Promise • The Franchisee Promise Our Franchisees 20 Our Community 22 Your First Step 26 Financial Information 24 Information Statement 28
5 A PHILOSOPHY GUIDED BY WHAT’S OUR VISION Right To be the world’s best fresh bread retailer.
A RECIPE FOR GROWTH
1980 1988 1991 1993 The first Bakers Delight A tried and tested The first interstate Bakers Expansion across New store opens in model, Bakers Delight Delight franchise opens in South Wales, Queensland Hawthorn, Victoria commences franchising South Australia and Western Australia OUR VALUES OUR MISSION • A passion for fresh, delightful bread. • A culture of constant improvement. To produce superior bread, provide superior service and create delight for all stakeholders. • Creating delight and ensuring a rewarding environment for stakeholders. People right, brand right – adds up to delight. • Promoting growth for franchisees and employees.
• Living authentically and embracing innovation.
1995 1999 2003 2015 New Zealand expansion BCNA partnership Canadian expansion USA expansion commences
7 YOUR OPPORTUNITY IS THERE TO Make
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS JOIN A FAVOURITE AUSTRALIAN SUCCESS STORY
Bakers Delight has grown from a humble bakery in Hawthorn to over 700 bakeries across four countries.
Our proven operations are the heart of the business. Working with passionate people, we continue to grow in market position and bakery numbers. With over 45 percent of our bakeries owned by franchisees with more than one site, the success of our operations and franchisees shows.
Whether you’re interested in setting up a new bakery or purchasing an established one, there are exciting prospects. You can be part of our story and join the Bakers Delight family; a business community filled with endless opportunities.
Bakers Delight has been successfully operating as a large family business, made up of many smaller family businesses.
From our support office staff, through to our extended network of suppliers and other franchisees, we are all about supporting one another to ensure everyone has the right ingredients to create their own business success.
If running your own business is your dream, please read on to learn more about how we can help you to make your dream a reality.
OVER 45% OF BAKERIES OWNED BY FRANCHISEES WITH MORE THAN ONE SITE
9 IT PAYS TO BE WITH THE Number One RECOGNISED BAKERY BRAND
KNOW YOUR NUMBERS Bakers Delight has experienced endless measurable success over the many years of being a Franchise business model. Bakers Delight have grown at a rapid rate thanks to our loyal franchisees, endless support, and great team culture.
BAKERIES IN 4 COUNTRIES 700 Our network consists of 700+ bakeries in 4 countries spread across Australia, New Plus Zealand, Canada and the USA.
100 10 YEAR PLUS FRANCHISEES Plus We have over a 100 Franchisees that have been committed to our brand for over 10 years.
38 YEARS AS A FRANCHISE BUSINESS MODEL Bakers Delight converted to a franchise business model in 1988 Plus and has grown to become the largest bakery franchise globally.
45% BAKERIES OWNED BY MULTI-SITE FRANCHISEES The strength of our support has enabled over 45% of our bakeries Plus to be owned by a multi-site franchisee.
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS 11 FAMILY TIME IS AN ESSENTIAL Ingredient
I get to spend lots of time with my children.
MEL JOYCE BAKERY: BORONIA
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS MEET MEL & GREGORY
Mel and Greg are the owners of Bakers Delight in Boronia. They are a committed husband and wife team that make their business work and have been doing so for 11 years.
Greg works on the production side of the business, with Mel managing the sales aspect. Together, they have created a great business operating model that balances their responsibilities and compliments each another, ensuring the success of their business.
7.00am RISE AND SHINE Mel’s morning commences in a typical am manner. She rises at a decent hour as 7.30 Greg is on the early shift baking and THE MORNING ROUTINE managing the bakery production staff. A typical morning for Mel consists He’s busy preparing the bakery pre- of having breakfast with the kids opening to ensure fresh products are and helping them to get ready for their ready for sale at opening time. school day. Occasionally she spends some downtime on a walk, exercising 9.00am before her busy work day. COFFEE BREAK Once school drop off is complete, 10.00am the first stop is to grab a coffee and LET THE WORK DAY BEGIN re-charge; often catching up with a friend Mel arrives at the bakery and leads or two along the way. Mel’s coffee stop the sales team for the majority of her allows her to balance work and home shift. Her role is to keep them engaged routines and gives her the downtime to and mentor them to achieve their best. reflect on the day’s work ahead. She also maintains the store, product display and sales. 12.00pm ROSTERS AND ADMIN Around midday Greg’s work day is done. He’s spent the morning ensuring that 3.00pm there is enough fresh product to last THE ULTIMATE BALANCE the day. A lunchtime finish following an Mel’s shift ends around 3pm, just in early start is standard routine for him. time to pick up the kids for the after- This creates the perfect balance as Greg school activities run. This is quickly is now free to spend quality time with followed by preparing and having dinner his kids post school pick up. Meanwhile, with the family. The rest of the evening Mel dedicates a portion of her time in is filled with some relaxation and the afternoon to managing the bakery tending to family duties. roster and attending to any outstanding administrative work. 9.00pm LIGHTS OUT Time to recharge and do it all again tomorrow.
13 WE ADD A LOT OFSupport
At Bakers Delight, we give our franchisees a wide range of valuable support. This becomes a key ingredient in their business success.
GROUP MANAGEMENT At Bakers Delight we train franchisees to operate efficiently. We offer ‘hands-on’ group management plus proven business procedures and systems. Our network improves continuously to remain competitive, meet the changing demands of customers and service our franchisees’ needs. We’re committed to enhancing systems, policies, and guidelines to give franchisees relevant and timely support.
OPERATIONS Efficient, effective operations are crucial to business success. Our regional and area managers have a wealth of experience, allowing them to give quality operational support to franchisees. Our operations team support franchisees in growing sales and their business and also in meeting our brand standards and values. They are the primary support contact connecting franchisees with our support office.
WE PROVIDE FRANCHISEES WITH TOOLS TO DRIVE THEIR BUSINESS
MARKETING Bakers Delight is a strong, distinctive brand. ‘No short cut to fresh’ is the cornerstone of the group marketing strategy. Strategic marketing support is offered in the areas of advertising, media, design, product, pricing, public relations, sponsorship, digital, merchandising and market research. Our franchisees also have the flexibility to conduct local marketing activities with our dedicated local marketing team’s support.
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS WE TRAIN FRANCHISEES TO OPERATE EFFICIENTLY
PROPERTY Our property team locates viable retail precincts and negotiates leases directly with landlords. The lease is held by Bakers Delight, who then allows franchisees to occupy the premises on the same terms and conditions originally negotiated.
PROJECTS Our projects team develop efficient bakery operations, offering a range of services that include: handover of new sites, relocations, refurbishments, lease negotiations and new site ‘turnkey’ operations.
PURCHASING Our purchasing team helps to simplify bakery operations, enabling franchisees to concentrate on operating their bakery. The purchasing team negotiates relevant supply agreements and works through distribution issues, maximising the buying power of the network.
HUMAN RESOURCES + TRAINING Our human resource and training services drive best practice and policies. Information and recommendations are offered to franchisees in the areas of industrial relations, employee relations and other relevant legislation.
INFORMATION SERVICES + SUPPORT Our group information services maintain a culture of continuous improvement and innovation, to deliver the best information service solutions for franchisees. Our service desk support line also provides a 24 hour helpline to assist with any technical information service issues.
15 A TRAINING PROGRAM FOR Success
To help our franchisees work toward the best business results, we offer a full training program.
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS NO EXPERIENCE NECESSARY Our franchisees come from all different walks of life, and many may have never baked a loaf of bread before. So, our training program is designed to teach franchisees everything they need to operate their business, including how to bake from scratch.
ONGOING TRAINING Ongoing training workshops in areas like financial management, production scheduling and staff development are available to franchisees throughout the year. These take place across the country in Bakers Delight regional offices.
ONLINE TRAINING - BREADUCATE Bakers Delight’s e-learning platform ‘Breaducate’ aids franchisees with training current and new staff. This invaluable resource lets franchisees track staff training module completion in key areas such as OH&S, marketing campaigns, and food handling to name a few.
YOUR COMMITMENT TO YOUR NEW FUTURE BUSINESS The program consists of 16 modules requiring a full-time commitment over an average of 16 weeks. Its length may vary from trainee to trainee, as the program is competency based. The program covers:
• Baking and sales training in a live bakery environment
• Monitoring and managing business operations and finances
• Local marketing and community involvement
• Wage and cost control
• Sales & production planning
• People management & workplace relations
To aid practical learning, the program runs in your state of residence in a live bakery environment with an existing Bakers Delight franchisee. Your host franchisee will give you great insight during the program and provide support once you’re operational in your bakery. Throughout the program you’re supported by a dedicated training consultant, who’ll liaise with you to help you achieve your learning goals and answer any questions.
KEY EVENTS AND PAYMENTS
Event Duration Investment Orientation 3 Weeks $3,000 + GST ‘Cooling off’ period 1 Week - Program Completion 13-16 weeks $8,000 +GST
17 OUR PROMISE. AN ESSENTIAL PART OF THE Mix
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS THE FRANCHISEE PROMISE
Our biggest asset at Bakers Delight is our relationship with our franchisees. A relationship built on mutual support and respect, governed by an agreement which sets out the rights and obligations of both parties.
THE FRANCHISOR PROMISE ✓ Provide all necessary support to ensure the successful launch of a new franchise
✓ Provide ongoing training through the competency-based training program
✓ Conduct marketing campaigns including advertising and other promotional activities
✓ Provide local marketing resources, materials and advice
✓ To make available network operations manuals
✓ Provide management, sales and administration advice
✓ Offer technical advice and information
✓ Provide access to recipes
✓ Promote a source of ingredients and other products in a ‘one stop shop’ arrangement
✓ Facilitate communication between franchisees via group meetings, formal functions, online and via newsletters
✓ Locate suitable sites and negotiate leases
✓ Plan and coordinate design and bakery set-up, providing a turnkey operation
THE FRANCHISEE PROMISE
✓ Operate the business according to Bakers Delight promise to customers: delightful product, delightful environment and delightful service
✓ Follow the Bakers Delight franchising system and comply with standards and operating procedures set out in the franchise agreement
✓ Actively participate in the business as the bakery principal
Full details of rights and obligations can be found in the franchise agreement and disclosure document, which are available to you during the bakery purchase process.
19 OUR FRANCHISEES HAVE THE RIGHT Blend
Our franchisees are a diverse group of people who have varied work and life experiences before joining Bakers Delight. Despite their differences, they all share our values and are passionate about our business model. But most importantly they have qualities that we believe in.
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS DO YOU HAVE THE QUALITIES OF A BAKERS DELIGHT FRANCHISEE?
Are you:
• Passionate about Bakers Delight • Driven to success
• Focussed and committed • Both a team player and a leader
• Hardworking and ambitious • Willing to follow the Bakers Delight system
• A strong communicator • Self-disciplined
• Organised and efficient • Willing to learn
Go to bakersdelight.com.au/franchising, and view franchisee testimonials to discover their journey to becoming Bakers Delight franchisees, or visit one of our bakeries.
21 DOING RIGHT BY OUR Community
WE ARE THE LOCAL BAKER
We believe that communities are the fabric of life, which is why our bakers take a little extra time each day to support and engage with those around them. Every day, our bakers support communities across the country providing delicious, freshly baked bread and snacks to local schools, sporting groups and charities.
BREAD DONATIONS
At Bakers Delight, we pride ourselves on baking bread from scratch every day for our customers. At the end of the day any leftover product is donated to charities as part of our commitment to supporting the local community. Donations are possible due to the relationships built between each bakery and their local community, with each bakery providing product to support those in need.
ANY LEFTOVER PRODUCT IS DONATED TO CHARITIES
BCNA
Bakers Delight has been in partnership with Breast Cancer Network Australia (BCNA) since 1999. Each year during the ‘Pink Bun’ campaign, all our bakeries donate 100% of the sale of Pink Finger Buns, with the aim of raising more than $1m for BCNA. Money raised helps BCNA fund its work in providing support and assistance to women whose lives have been affected by breast cancer.
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS 23 OUR RECRUITMENT Process
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS STEP 1. STEP 2. APPLY DISCOVERY DISCUSSION Upon lodging an enquiry we An opportunity to get to know encourage you to submit an application one another via a brief phone to commence the recruitment process screening
STEP 3. STEP 4. FIRST MEETING BAKERY ORIENTATION You will meet with our local Regional By attending a two day orientation Manager to learn more about becoming a you will experience your future franchisee career in a hands-on environment
STEP 5. STEP 6. FINAL MEETING APPROVAL A final meeting will offer you an Once you’ve completed the opportunity to ask any final pressing recruitment process you will be questions approved to commence your training
25 TURN DOUGH INTODough YOU CAN CHOOSE A BUSINESS STRUCTURE THAT SUITS YOUSSARY
PURCHASE AN ESTABLISHED BAKERY
Established sites include:
• Trading history with an established customer base
• Existing equipment & fit out
• Support with business handover and transition
• Head lease negotiated and managed by Bakers Delight
Existing site
Franchisee fee $5,000 - $50,000 +gst
Bakery purchase $50,000 - $1,000,000 +gst
Training $10,000 +gst
*The purchase of an established bakery will include any remaining term on the current Franchise Agreement, however Bakers Delight will request that the Franchise Agreement term is topped up to be 10 years at commencement, at a cost of $5,000 plus GST per year required.
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS PURCHASE A NEW BAKERY
New sites include:
• Head lease negotiated and managed by Bakers Delight
• New equipment at negotiated cost
• Full turnkey design & construction of bakery managed by Bakers Delight
• Operational and marketing support for bakery opening
New site
Franchisee fee $50,000 +gst
Bakery fitout, equipment & start up costs $500,000 - $550,000 +gst
Training $10,000 +gst
KEY PAYMENTS
Under the franchise agreement a number of recurring or isolated payments are, or may become, payable by the Franchisee to the Franchisor or an associate of the Franchisor.
Payment Figure Due Date
Royalty 6.5% of Net Sales +gst On the Friday of each week Advertising contribution 2% of Net Sales +gst On the Friday of each week Transfer fee A minimum of 4% of the sale price of Payable by existing franchisee at or the franshisee’s business prior to settlement of sale of business Franchise rewrite fee Currently $50,000 +gst for 10 years At or prior to expiry of previous franchise term
Your level of investment will vary depending on whether you decide to open a brand new Bakers Delight or decide to purchase an established bakery. Opportunities to purchase within the Bakers Delight network are shared with you during the franchise recruitment process.
ACCREDITATION
As an established franchise system we are accredited with a number of banks across Australia. As a general rule, a bank may lend up to 60% of the value of the purchase price; the purchaser is then required to fund the balance through cash or equity in assets. Ask our franchise recruitment team for more information.
27 INFORMATION STATEMENT FOR PROSPECTIVE FRANCHISEES
THINKING OF BECOMING A FRANCHISEE?
IT’S IMPORTANT TO CONSIDER THE RISKS AND THE REWARDS.
This document is not a complete guide to franchising, it is a starting point.
It should be combined with your own independent legal, accounting or business advice and the disclosure document provided by the franchisor.
Entering a franchise is a big decision. Before you do so, you should:
• Conduct due diligence - this means researching the franchise system and talking to current and former franchisees.
• Get advice - get legal, accounting and/or business advice from professionals with expertise in franchising
• Read all the documents - carefully study the disclosure document, franchise agreement and any other documents provided by the franchisor
• Know your rights - make your own enquiries to ensure that it’s the right decision for you. The Franchising Code of Conduct sets out the rights and obligations of the people involved in a franchising relationship. It can be found at comlaw.gov.au
You should also consider taking a specialist franchising or business course before making a decision to enter a franchise agreement. There are free, online education courses available for prospective franchisees.
Some courses can be found here franchise.edu.au/education.html
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS WHAT IS FRANCHISING?
Franchising is a model for doing business. When you enter a franchise agreement, the franchisor controls the name, brand and business system you are going to use. The franchisor grants you the right to operate a business in line with its system, usually for a set period of time. There is no guarantee you will be able to keep your franchise business after the initial period of the agreement ends.
Franchisors and franchisees must comply with the Franchising Code of Conduct, which exists under the Competition and Consumer Act 2010, as well as consumer and company laws. The Franchising Code sets out minimum requirements for a franchisor to provide specific information to you. A franchise agreement, once entered into, is a legally binding contract that sets out the terms of the franchise.
WHY CONSIDER FRANCHISING?
A franchise can offer particular benefits over other types of businesses. For example, franchises may have an established product or service and an existing reputation and image. It may also give you access to the franchisor’s experience and knowledge in the industry, planning, marketing skills and operating procedures. Some franchise systems provide support, some do not.
You should carefully think about whether the franchise system you are considering suits your business experience, skills and needs.
UNDERSTANDING THE FRANCHISING RELATIONSHIP
Two important features of franchising are that the franchisor has established the business system you are using and that most franchise systems rely on each franchise maintaining consistency. For those reasons, franchisees are usually required to strictly comply with the operating procedures set down by the franchisor.
As a result, you may be limited in the changes you can make to the franchise system without the agreement of the franchisor.
You will usually also be bound by confidentiality obligations. This includes limits on your rights to use the franchisor’s intellectual property or business system outside the franchise.
Most businesses adjust to meet changes in the market. The franchisor might make changes to the franchise system at any time but does not have to discuss them with all franchisees.
UNEXPECTED EXPENSES
In franchising, as in any business, unexpected expenses may arise. Events such as a natural disaster or a change in the law or Australian standards can impact your business. You need to have a business plan that takes this into account when working out the funds you will need for the future. You should also make sure you have the type of insurance which is right for your situation.
During the life of your franchise agreement, a franchisor might also decide to update computer systems or introduce new uniforms or change the appearance of the franchise system. These changes might not have been thought about when you entered the agreement. Those costs would normally be paid by the franchisee under the agreement.
29 THE RISKS OF FRANCHISING
Statistics suggest franchises have a lower failure rate than other businesses, but franchising is not risk free. Franchising is a business and, like any business, there is the potential for a franchisor or franchisee to become insolvent. If this occurs this may have significant impacts on your business, for instance, you may no longer be able to use the franchise system’s branding.
Some of the things you should think about:
• How much working capital or extra funds you need for the first year or two while the business is getting established
• Consumer demand for products or services is not the same in every geographical area and a franchise system might not be successful in every area
• As a franchisee, you may not have an exclusive territory
• Your franchisor may have the ability to compete with you online
• As a franchisee, you won’t necessarily have the choice of where you buy the products you need to run the business, even if you believe you can get those products for a lesser price somewhere else
• An agreement may allow the franchisor to terminate the agreement even if there hasn’t been a breach by a franchisee
• Some locations are better for some businesses than others (i.e. consider a shopping centre versus a main street)
• The economy has its ups and downs
• Whether the business is a fad or should it pass the test of time
You may not have an automatic right to renew your agreement once the initial term is over. You should think about what happens at the end of the agreement:
• Will you be able to recover your outlay and make a profit during the term of the agreement?
• What are your rights and responsibilities around renewing your franchise agreement?
• What are the rules about you selling your business?
• Are there any restrictions on you starting a similar business if you want to?
The Australian Competition and Consumer Commission (ACCC) administer and enforce the Franchising Code. For example, the ACCC can provide information on how supply arrangements work in a franchising relationship.
FURTHER INFORMATION
Further information on franchising can be found at accc.gov.au, or by calling the ACCC Small Business Helpline on 1300 302 021.
THE RIGHT INGREDIENTS TO CREATE YOUR OWN BUSINESS SUCCESS Notes
31 1300 309 759 bakersdelight.com.au/franchise