SHOW PREVIEWS
* Mexico City FIF 2017 Global 9 - 11 March * Paris Franchise Expo Paris 2017 19 - 22 March Franchise * Sydney www.globalfranchisemagazine.com Sydney Franchising Expo 25 - 26 March MASTER, REGIONAL AND INTERNATIONAL FRANCHISING
FIND YOUR SIGNS FOR THE TIMES: PERFECT MASTER FRANCHISEE FASTSIGNS TAKES OFF
PREPARING TO GO GLOBAL? ALL YOU NEED TO KNOW
PAGE GLOBAL PAGE SUCESSFUL PAGE FRANCHISE 12 MEETS… 42 RESALES 56 DOWN UNDER Bill Edwards of EGS Making pre-owned Australian Rules Franchising franchises work
®
#1 Sign & Graphics Franchise Seeking International Opportunities Master & Area Developers
• Over 620 locations • Business-to-business hours worldwide in 9 countries • Low staffing requirements • Professional business • Attractive margins clientele
FASTSIGNS of San Antonio, NW
For more information, contact Mark Jameson at [email protected] or 214-346-5679 www.fastsigns.com Welcome
As we get into the swing of 2017, I can see much to look forward to in this coming year. [ CONTENTS ] Not least will be discovering what impact the new administration in Washington is likely to have on the franchising industry and the legislation governing it. More FRANCHISE ADVICE AND concrete is the full diary of franchise shows that now seem OPPORTUNITIES INSIGHT to be springing up in every corner of the world, a selection 10 CeX 7 7 POINTS TO A PERFECT of which events we’ll be attending, kicking off with a visit Buy-and-sell lights up the high street MASTER FRANCHISEE to The Franchising Show at London’s Excel in February. Mike Bidwell advises on partner Shows like these are an integral part of business growth 20 CAVAVIN selection for franchisor and franchisee alike and to help you get the Opportunities in French wine most from them, we are increasing the number of events we 12 GLOBAL FRANCHISE MEETS 22 FASTSIGNS BILL EDWARDS preview in the magazine and online, and offering a wider The fast-growing sign franchise How Bill Edwards built up Edwards range of helpful information to those attending them. You’ll Global Services find previews of franchise shows in Mexico City, Paris and 24 800PIZZA Sydney in this issue. The pizza chain that’s succeeded 18 5 MINUTES WITH From Global Franchise itself, you can expect in Dubai BRAD FISHMAN authoritative advice from experienced people on every What drives the Fishman PR guru aspect of international franchising, from promoting 36 JAN-PRO AND MAID RIGHT Two Premium Brands expanding now 28 THE BFA GUIDE TO BRITISH your brand abroad to connecting with the right master FRANCHISING franchisee. People and companies planning to master 40 RESTORATION1 Pip Wilkins on franchising in the UK franchise will find plenty of top-quality opportunities A national leader in restoration among the brand profiles featured in each issue. These franchises 42 SUCCESS THROUGH RESALES profiles offer detailed overviews of the brand along with the Buying pre-owned franchises investment numbers master franchisees 52 COYOTE UGLY Rolling out thru Europe and 45 PREPARING TO GO GLOBAL need. Brand profiles are an effective shop beyond now Gordon Drakes offers sound advice window for franchisors looking for the perfect master franchisee. 58 HOOTERS 50 ARE YOU READY FOR GDPR? Ross Gilfillan Fun neighbourhood restaurant EU data regulations considered Editor, Global Franchise 66 TAX ASSIST 56 BORDERLINE SUCCESSFUL [email protected] Growing accountancy franchise Lesley Hawks avoids misunderstandings 74 PAPA JOHNS The international pizza franchise 62 THE GLOCAL MESSAGE Global meet local by Nathen Mazri www.globalfranchisemagazine.com 64 FRANCHISING IN AUSTRALIA ADVERTISEMENT ART DIRECTORS MADE EASY SALES DIRECTOR Lee Whiteford 52 Damian Paull’s guide to doing Mark Forsyth Matt Sumner business down under 44 (0)1323 471291 DESIGNERS 82 VIEWPOINT [email protected] Adam Barford Experts’ opinions GROUP Lloyd Oxley ADVERTISEMENT MANAGER CREDIT CONTROL Richard Davies Sue Carr 44 (0)1323 471291 24 44 (0)1206 505903 [email protected] PUBLISHER ACCOUNT EXECUTIVE Matthew Tudor Callum Forsyth [email protected] GROUP EDITOR Charlotte Smith Follow us on twitter: [email protected] @globalfranmag
Published by Aceville Publications Ltd The Boatshed, Sovereign Harbour, Eastbourne, East Sussex, BN23 6JH. Printed in England © Aceville Publications Ltd
004 GLOBAL GLOBAL FRANCHISE FRANCHISE 36
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SHOWS 14 SYDNEY FRANCHISING EXPO Previews this premier Australian event
32 INTERNATIONAL FRANCHISE SYMPOSIUM Comes to London in March
54 FIF 2017 The big Mexico City Expo previewed
76 FRANCHISE EXPO PARIS 2017 All you need to visit the French show 72 76 64
GLOBAL FRANCHISE 5 800Pizza_Layout 1 03/09/2015 12:05 Page 1
800 Pizza is considered the most successful authentic Italian Investor Profile pizzeria chain in the UAE nowadays and the very first to bring THE IDEAL FRANCHISEE Although there may be a number of the art of traditional Italian cuisine to Dubai in 2007. viable franchisee profiles, 800PIZZA Management believes Our Story with 800PIZZA now being considered by many to be that it should operate with franchisees that meet the the finest Italian Restaurant in town, you wouldn’t really following criteria: believe how small it was when it all started. Mr. Alessandro • Entrepreneurs or Corporates D’Ubaldo, the mind and soul behind 800PIZZA, had been living • Have substantial F&B industry experience. in Dubai since 1999, and in 2006, he started working on a • Have relevant resources in terms of IT, Financial, HR and PIZZERIA project due to his passion for traditional and Government liaison. authentic Italian food. • Has suitable locations shortlisted and available in the countries they operate in. March 8, 2007, the very first branch was opened in Dubai, UAE • Hard-working with a desire to succeed. despite having the most dynamic name in the long and colorful • Good people skills, including business, management and history of pizza making, 800PIZZA was a gem of an customer service skills. establishment. Little more than a hole in the wall, it contained • High personal standards: excellence, honesty and integrity. the Italian owner’s pride and joy, a genuine handcrafted wood • Ability to work within a system. burning oven flown in all the way from the “The Boot” of • Stability and maturity. Southern Europe. In 2010, 800PIZZA joined hands with Belhasa • Exposed to business and businesses operation. Hospitality which resulted in a strong growth of its business. By October 2012, the joy and satisfaction that 800PIZZA brought to International Licence Fee: Upon Application all its customers were not just contained within the 40sqm branch in Al Barsha, Dubai, but had spread all over the city with Planned/Available: additional 6 branches in Dubai, UAE. Not only that, 5 franchise • Globally restaurants are already sold in Abu Dhabi, UAE, 5 in Doha, Qatar and another 3 in Ajman and Sharjah, UAE.
800PIZZA’s ardent passion and wish to share a taste of real Italian cuisine with people in this part of the globe is indeed a huge SUCCESS. With new branches opening, 800PIZZA has proven its excellence in the food industry and has surely built a brand recognized by many as the leading name in Traditional and Authentic Italian Food.
for franchise enquiry: [email protected] www.800pizza.com ADVICE
7 POINTS TO A PERFECT MASTER FRANCHISEE
Whether expanding your brand at home or abroad, finding a perfectly-matched master franchisee is key, says Mike Bidwell, CEO of The Dwyer Group
he speed of growth for a What about local cultures and customs That involves money not only for the franchisor and the reach – how will they impact the business master license to be awarded, but also of its network to points abroad? The right master franchisee for the infrastructure of a corporate IT ALWAYS AMAZES across the globe can often can finesse this kind of introduction, office, staff, marketing, legal services Tbe accelerated when the franchise development and growth for a brand. and everything it takes to get that ME THAT EVERYONE WANTS TO BE THEIR opportunity is awarded to master In theory, they might even do it better franchise opportunity out into the OWN BOSS BUT SO franchisees. Those agreements than if you tried to do it yourself, for market effectively. But it all starts with FEW ACTUALLY KNOW can grow that brand exponentially a variety of reasons. Here are seven launching and successfully operating HOW TO DO IT” in foreign countries. All it takes is qualities to look for in that perfect a pilot in the market to validate the picking the perfect master. As easy master franchisee who is up to the task: model. Adjustments to accommodate as it sounds, however, selecting the local nuances are likely. right master franchisee can be a 1. LIQUID ASSETS monumental task. After a franchisor It takes money. For the monetary 2. SUITABLE EXPERIENCE has worked hard to prove a concept, demands on a master franchisee, A great master franchisee often comes award franchisees domestically, train think back on the financial journey it to the table with a resumé that says, and support the system, build access took to get your franchise going as a “I know how to build large businesses to a vendor network and regularly blueprint. Then consider the liquid with many moving parts.” Maybe the look at ways to raise the bar, it takes assets the most basic requirement master franchisee has successfully a lot of trust to expect a master for getting started correctly. One established other franchise brands franchisee to do the very same thing cannot successfully build a franchise that are not in direct competition with in another country. network on hopes and aspirations. yours across the same geography. Or, It’s a delicate proposition that comes Before franchise prospects can maybe they operate businesses that with a lot of questions. If it worked at invest in a franchise opportunity, are not franchised operations, but home, will it work there? Is it simply a the master franchisee must invest still include management oversight, process of following the system? in making it available to the market. training and support across multiple
GLOBAL FRANCHISE 7 ADVICE
offices dispersed over a large territory. that will help them Similarly, the prospect may operate in with their business. your very industry, but perhaps they And training must are looking at a franchised business be constant. It to accelerate what they already know. should be world- There is a skill to establishing, growing class training, not and overseeing such demanding one class training, organizations, and that track record because it will exist will speak volumes to a master at multiple levels franchisee’s ability with your brand. for a franchisor. There may be 3. LEADERSHIP SKILLS training for new Franchising is a relationship business. franchisees, for It requires a leader to build a strong annual conventions, head office as well as a strong for refresher courses, franchisee team. Personalities are for meetings with top very important. Take the CEO of an performers, for peer-to- organization and examine his or her peer best practices and more. ability to lead. When putting your The perfect master franchisee brand in another country in the hands must know and support this of a master franchisee, you want with a strong home office staff, the the same qualities in that leader to selection of strong franchisees and establish that presence. the franchisees’ employees.
4. ABILITY TO BUILD A CULTURE 6. WORLD-CLASS BUSINESS Following the goal for strong leadership CONSULTING is the need to build a strong culture. Another foundational trait a master This will set the moral and ethical tone franchisee should provide is skill at for the company, ensuring that not only business consulting. It always amazes the head office team understands and me that everyone wants to be their own believes in the business, but also that boss but so few actually know how to it is communicated to the franchisees do it. The master franchisee has an business taking shape and their teams. The franchisees’ enormous responsibility to provide the in the territory. This is why the master teams will have the contact with the skills that coach franchisees on how to franchisee must have both the right end customer, and the end customer run a small business. It’s a necessary attitude as well as the skills to transform must be a beneficiary of the company service with win-win results. After all, the U.S. or home country processes into culture. This culture should be successful franchisees mean successful a similar process that meets the needs of deeply rooted and ongoing, and it master franchisees. the local culture and sometimes even the takes a talented master franchisee to local laws. One example is the different communicate it properly to all points 7. TRANSFORMING SYSTEMS FOR ways that Dwyer Group sells franchises of its growing network. A NEW COUNTRY in the U.S. versus the U.K. In the U.S. we Too many times the master franchisee have one building full of franchise sales 5. WORLD-CLASS TRAINING is told to take the system that was people – franchise developers – who Master franchisees are nothing created in the U.S. or home country and do most of their work via the phone or without their ability to build world- copy and paste it into the new country. web. The contacts they make and the class training organizations. They This rarely works as the local culture conversations they have from a distance must be able to train people. It is at the and way of doing business is a very get franchise prospects to Waco, Texas, essence of what is good and attractive important consideration. In fact, this is for a discovery day orientation tailored about franchising. People are drawn to one of the reasons master franchisees to one of our many service brands. That franchise opportunities and a chance can be more adept at expanding a is followed by more phone and email to be their own boss because they franchise concept in their country. correspondence that results in signed don’t have to build something from the They know the local culture better franchise agreements. This process has ground up on their own. They will get and will be closer to the day-to-day existed with great success for more than training to learn and follow the systems operations to see the nuances of the three decades.
8 GLOBAL FRANCHISE We tried to superimpose this Remember, how I said franchising same system for franchise sales in is a relationship business? In the ABOUT THE AUTHOR the U.K., and it failed. Simply put, the U.K., we had to understand how culture of doing business and selling those relationships were established Mike Bidwell is President MASTER FRANCHISEES franchise opportunities in the country in the local culture. After this and CEO of Dwyer Group ARE NOTHING WITHOUT (www.dwyergroup.com), was customarily different. What we different approach to orientation, THEIR ABILITY TO headquartered in Waco, discovered over time was that we had our information was given higher BUILD WORLD- Texas. With more than 2,700 to meet franchise prospects early in importance. This one change led to CLASS TRAINING franchisees across 14 service ORGANIZATIONS” the process in their hometowns, often great success in adding franchisees brands in 11 countries, The in their homes or places of business, in the U.K. Again, using a master Dwyer Group has journeyed to ensure we developed a quality franchisee to expend your concept through the various phases relationship with them in person on into a new country can significantly of franchise development their time. After we established a accelerate the process and smooth out from direct franchising to relationship with that prospect, we had many potential bumps in the road. It establishing the franchise the opportunity to sell them something. is critical, however, that you take the network at home and abroad Then, and only then, since we had time to carefully qualify your potential and with master franchisees forged a strong bond, could we invite master. Take your time, pick the right to grow those brands in them to an orientation to give them candidate, then watch your global foreign countries. details of an offering. development take off.
GLOBAL FRANCHISE 9 BRAND PROFILE
[ Ce X ] THE CeX STORY CeX is rolling out its successful technology buy-and-sell concept and is looking for area and master franchisees now
eX was founded in 1992 in territories across four continents from years buying, selling and exchanging London. The best ideas are the UK to Australia. The majority of mobile phones, games, computers often the simplest and the our stores are franchised and new and digital electronics directly from TODAY THERE ARE most profitable: CeX takes stores are opening every week. the public. This requires an intimate MORE THAN 500 CeX Cthe buy-and-sell concept and updates understanding of the products and their STORES WORLDWIDE it by trading in digital entertainment AREA DEVELOPMENT lifecycles, as prices can change fast. OPERATING IN ELEVEN products. CeX retail stores buy, sell AGREEMENTS AND MASTER New developments in technology and TERRITORIES ACROSS and exchange mobile phones, games, FRANCHISES new entertainment product releases FOUR CONTINENTS computers and digital electronics CeX operates franchise stores in the can change what was a premium FROM THE UK TO directly to and from the public. UK, Ireland and Spain. In 2014 we product into a lower-priced product AUSTRALIA” What separates CeX from wider launched an extremely successful overnight. CeX analyses product supply buy-and-sell retailers is execution. We master franchise partnership and demand all the time, adjusting trade in a focused, yet complementary in Mexico. This illustrates our prices using sophisticated tools product range. The brand is publicly commitment and strength to adapting developed over the last 25 years and acclaimed in the UK as a technology to markets globally. We are looking for have a team of over 40 experts. Our goal and entertainment specialist. CeX has experienced retail operators to partner is to be the leading worldwide retailer developed a set of bespoke computer with us and share our success globally. of second-hand digital entertainment systems that simplify the process of Opportunities have opened for area products. CeX is looking to partner buying and selling. Goods are tested development agreements and master with experienced masters and area before they are bought in and then franchises. We are also seeking single developers across the world. resold with a warranty, offering unit franchise growth in our existing customers great value for money and operating territories. peace of mind. A best in class, fully transitional website solicits orders WHY INVEST? 24/7 and seamlessly shares these out In the past couple of years we’ve been amongst the retail stores to fulfill, opening on average two new stores a further boosting income. week. We are experts in buying and Today there are more than 500 CeX selling second-hand technology; it’s stores worldwide operating in eleven in our DNA. We have spent the last 25
AS A POTENTIAL CeX MASTER FRANCHISEE YOU HAVE: A track record of business management of medium to large national businesses A desire to grow the brand via multiple outlets and the financial means to do so An existing business infrastructure that could support the development, or the experience and ability to create this Good local knowledge, relationships and expertise in the areas of real estate, government and labour regulations Franchise marketing, sales and recruitment experience and knowledge of our key product lines Individuals willing to complete six-nine months training in the UK, or Europe To discuss the opportunity further, email: [email protected]
10 global FRANCHISE WHERE IS CeX LOOKING TO FRANCHISE?
With 25 years of experience operating in 11 countries across four continents, CeX believes that the model will work everywhere with the right partners and so all locations are currently being considered. Recently CeX has launched stores in Australia, Italy, Portugal and Poland and is currently developing further sites for corporate stores, 10 REASONS TO INVEST WITH CeX while starting the process of beginning to franchise these locations. Area 25 years’ experience development agreements in these 500+ stores Worldwide, with stores opening weekly locations represent a fantastic Successful Master Franchise already operating opportunity as much of the initial development and Globally successful across four continents, in 11 countries learning has already Uniquely-focused model with little competition been done. Huge potential market as our focus is on very popular products Store location election, design and build support by experts Product selection and pricing by experts Marketing support by experts Global procurement network for business and branded supplies.
THE OPPORTUNITY
Following an extensive training and approval process, CeX will open a small number of stores within the country alongside the approved WINNER “BEST NEW INTERNATIONAL master. This serves to further deliver our training and direct support. FRANCHISE INTO IRELAND” 2012 A support network is just part of the partnership and helps to cement the ongoing relationship between the Master and CeX. We believe WINNER “CONTINUOUS this is something that differentiates CeX from other franchisors. With IMPROVEMENT AWARD” 2015 THE our investment in the Master’s territory, we ensure the optimum BEST FRANCHISE AWARDS support for growth and success across territory.
SUCCESS STORY AT A GLANCE:
Gabriel Moreno recently opened his sixth CeX Name of Franchise: CeX store along England’s south coast. “CeX brings an Established: 1992 innovative franchise model,” he says. “Moreover, the Number of franchised outlets: 262 (10 Nov 2016) with a total of 519 as flexible royalty policy and the 12 month guarantee we have Corporate stores too) Location of units: Currently in 11 countries made me feel confident enough to get involved.” across four continents The perfect CeX franchise owner, he adds, will be Investment range: Varies on territory “a self-motivated and passionate individual looking Minimum required capital: Varies on territory to stand out from the crowd and achieve success in Web: webuy.com a shifting and vibrant industry.” Contact: [email protected]
global franchise 11 INTERVIEW
[ GLOBAL FRANCHISE MEETS… ] BILL EDWARDS William (Bill) Edwards has built Edwards Global Services upon solid experience in franchising and first-hand knowledge of other countries and cultures
dwards Global Services, Inc., I realized that small, high How do you select the countries you Inc. (EGS) takes U.S. quality US franchisors that had an help franchisors to expand into? franchisors into carefully exportable business could not afford a We developed a tool called selected countries using full-time international development MY EXPERIENCE GlobalVue™ in 2001 that analyses Etrademarked processes, a global department. EGS was founded in 2001 AS BOTH A numerous parameters that clearly Associate network and experience to provide a full service outsourced FRANCHISOR AND define what it is like to do business around the world. We act as a full international department at an INTERNATIONAL in a country. Based on immense service outsourced International affordable cost to US franchisors. My MASTER research and experience we try to Development Department for our experience as both a franchisor and FRANCHISEE GIVES predict changes that may impact the Clients. With 40 years of international international master franchisee gives ME A ROUNDED development plan of an international experience, Mr. Edwards has lived me a rounded perspective as to what PERSPECTIVE AS TO licensee in a particular business in seven countries and worked on is needed to go global successfully and WHAT IS NEEDED sector in a target country. A general projects in 68 countries. the opportunities and challenges that TO GO GLOBAL GlobalVue™ comparing franchise- will be faced by a U.S. Franchisor. SUCCESSFULLY” friendly countries is published Tell me about your early career quarterly. We also have a brand From 1990-2001, I worked with the How did you grow the business? specific GlobalVue™ for each Client AlphaGraphics, Inc. global digital Starting as a single consultant that focuses on their brand’s country print group as the company’s master with one client, success with one potential. This tool allows us and the licensee in China and Eastern Europe client got me another client and Client to focus on priority counties and also as the company’s USA-based the business grew to a team of eight that have the highest potential ROI for Senior International Executive people in the US, thirty Associates their brand. growing the company’s global network and Directors overseas, activity from four to 24 countries. this year in 22 countries and ten And how do you select your U.S. Prior to my licensing and consulting small to large, private and publicly- Franchisor Clients? career, I had a 20-year oil and gas traded US franchisor clients. The EGS represents U.S. franchisors that exploration sector career with key to our success is the extremely have the following qualities: strong Atlantic Richfield and Ashland Oil qualified people who make up our senior level commitment to going while living in Alaska, China, Iran, GlobalTeam™ around the world. global, consistent unit growth; proven Indonesia, Hong Kong, Turkey and Our clients also highly value the unit margins despite the high level the continental US. I directed Atlantic perspectives and knowledge of our of US competition, strong training, Richfield’s exploration program in diverse team members. It is truly support and marketing resources; and China and established the company’s humbling to be part of this incredible the potential for a good Return On subsidiary in Turkey. Subsequently, group of people. Investment for the licensee. I founded an international oil and gas company and served as Senior What have been the most important What are the key factors, which International Development Advisor elements in its success? will determine the success of an for Ashland Oil. Our team’s personal knowledge of overseas franchising venture? what is needed to take a franchise From our team’s collective years How did Edwards Global services global successfully, what it takes of experience working in many come into being? to be an international licensee, a countries on franchises in many After my last assignment as an formal going global process and a sectors, we believe these are the international master franchisee in deep understanding of cultures from factors for successfully taking a Eastern Europe for AlphaGraphics, country to country. franchise global: a pro-active plan
12 GLOBAL FRANCHISE for entering carefully chosen countries that have the potential for a good ROI for the specific brand; an excellent record of success in their country with consistent growth and few closures; strong unit earnings results in their home country; clear differentiation from what is already in the other country in their sector; strong training, support, marketing and Intranet resources; a financial and development model that offers licensees the potential for a good return on their investment.
How healthy is the world franchising scene just now? Despite all the apparent problems in the world today, there are many countries where new franchise investment is being made and where the business parameters are conducive to success for a US franchisor to enter. Latin America, parts of Europe, the Gulf Cooperation Council countries in the Middle East and most Southeast Asian countries are seeing a high level of new franchise investment.
What are your future plans for Edwards Global Services? We are always developing new tools to fine-tune our country analysis for specific franchise brands. We are also increasing the range of global information sources that we monitor to try to predict a country’s economic and political climate for investment and the rule of law.
GLOBAL FRANCHISE 13 SHOWS AND EVENTS
WEALTH OF OPPORTUNITIES AT SYDNEY FRANCHISING EXPO The Franchising & Business Opportunities Expo hits Sydney 25th - 26th March. It’s the place to be for anyone interested in franchising in Australia and beyond
alive in the new venue at ICC Sydney. Featuring a striking contemporary design, leading technology and multipurpose spaces, ICC Sydney is located in the heart of Sydney in the active precinct of Darling Harbour IT’S THE SHOW’S on Cockle Bay. And the venue won’t 30TH YEAR, WHICH be the only new aspect of the show, IS AN EXCITING she reveals. “This year we are also MILESTONE FOR US re-launching the Franchise Advice AS ORGANISERS, Centre to give visitors quality time AND ALSO FOR OUR with financial and legal specialists, EXHIBITORS” and the seminar stage will be found right at the beating heart of the show. It’s the show’s 30th year, which is an exciting milestone for us as organisers, and also for our exhibitors. Over the years, we have seen many of Australia’s best known franchise brands launch and grow at the Expo.”
FREE SEMINARS The free seminar program runs each ustralia’s premier “Nothing can replace that face-to- day featuring inspiring franchising franchising event, the face interaction – meeting the people success stories, panel sessions with Franchising & Business behind the brands is the best way to franchisees and franchisors, as well Opportunities Expo, find a business that fits best with as expert presentations from brokers, kicksA off a busy year in 2017 with its your skills, your budget and your finance and legal experts. “I’m very Sydney show opening 25-26 March dream lifestyle.” excited about our seminar program at the brand new International In addition to the Sydney in Sydney this year,” Stacey says. “It’s Convention Centre (ICC) Sydney at Franchising and Business an incredible opportunity to hear Darling Harbour. “Whether visitors Opportunities Expo, there are more from people at the top of their game, are looking to make a bit of extra two-day events through the year to learn from them and to see what income, or a complete change of in Melbourne and Brisbane, plus drives them.” career, there will be a wealth of ideas a one-day boutique event in Perth. Poolwerx’s dynamic CEO and information available,” says Stacey says she is looking forward to John O’Brien will give a keynote exhibition manager Fiona Stacey. seeing the first show for 2017 come presentation on what he has learned
14 global FRANCHISE as he built Australasia’s largest pool of business ideas, from established and spa network with over 300 active brands such as Minuteman Press MORE SHOWS franchise territories, 330 mobile vans International, United Franchise IN 2017 and more than 70 retail stores, as well Group, Poolwerx, Jim’s Pool as a growing network in the USA. A Care, James Home Services and Perth: 7 May at Crown Perth member of the Franchise Council Clark Rubber, to up-and-coming Brisbane: 22-23 July at of Australia (FCA) Hall of Fame, Australian business concepts like Brisbane Convention & Exhibition O’Brien has been a leading player in Mobile App City, H2O Innovate, Centre, South Bank the Australian franchise industry for The Graffiti Eaters, National Drones Melbourne: 26-27 August at over 20 years as a member of FCA and Wheel Change U. For the first Melbourne Exhibition Centre, and World Franchise Council, and is time, a delegation from Taiwan will South Wharf a regular contributor at high-profile showcase 10 successful brands from franchise events such as the National East Asia, while other international facades offering views of Sydney. Franchise Convention. “The seminars business concepts include Tax Darling Harbour is a major tourist and free panel sessions are always Assist Accountants, VendHQ and attraction in its own right, featuring a highlight of the Expo,” says Fiona TapSnap. In addition, there will shops, cinema and restaurants, Stacey. “It’s a good idea to check be an appetising range of food or Sydney Harbour cruising, Sea Life the program on our website before beverage franchises from the likes of Sydney Aquarium, the National you attend, to make sure you’re in Australia’s largest franchise company Maritime Museum and Powerhouse time to hear from any speakers who Retail Food Group, international Museum. The Sydney CBD and The particularly interest you.” brand Papa Johns, newer players Star casino complex are a short like Juiced Life, Ogalo Portuguese walk away. PLANNING YOUR TIME Chicken and Fogo Brazilian There are plenty of hotels nearby Visitors to the Sydney Franchising Churrasco Grill, plus Aussie success to suit every taste and budget, Expo can check out a wide spectrum stories such as Xpresso Mobile Café including Novotel Sydney Darling and New York Slice. Harbour, Novotel Rockford Darling Harbour, Parkroyal Darling Harbour, EXCITING NEW VENUE Ibis Sydney Darling Harbour, Opened in December 2016, ICC Holiday Inn Darling Harbour, Sydney is an AU$1.5 billion Ovolo 1888 Darling Harbour, development, which is part of a Hyatt Regency Sydney and Oaks larger AU$3.4 billion, 20-hectare Goldsbrough Apartments. transformation of Darling Harbour. The ICC Sydney is at the heart of AUSTRALIAN FRANCHISING its very own harbour waterfront INDUSTRY COMES OF AGE precinct, set amongst green spaces, According to the Franchise Council of restaurants, retail and a vibrant Australia (FCA), although franchising public domain on Darling Harbour yet may have initially provided a means only a moment’s walk to Australia’s for Australians to benefit from foreign largest CBD. “I was lucky enough to products and systems, over the past attend a pre-opening event at ICC two decades it has emerged as the Sydney and I can tell you it is a world chosen format for many Australian class venue with excellent services entrepreneurs to expand and develop and facilities,” says Fiona Stacey. their business. The great majority (86%) of franchise systems operating HOTELS & ATTRACTIONS in Australia are home-grown, and ICC Sydney is a totally integrated increasing numbers of Australian venue, offering ease of access franchise systems are successfully across the complex via an internal taking their systems overseas. concourse, which is linked to a “The Franchising Expo has played number of major access points. a significant part in growing the Natural light floods foyers and breadth and depth of the franchise pre function spaces through glass industry in Australia,” reflects Stacey. “Now it’s a new year and many people are considering their lifestyle and AT A GLANCE career choices. For many, it’s time to make a new start, and there is no better place to see so many business WHAT: Sydney Franchising & Business Opportunities ideas under one roof than the Expo 2017 WHERE: International Convention Centre Sydney, Franchising Expo.” Darling Harbour, Sydney WHEN: 25-26 March 2017 WEBSITE: www.franchisingexpo.com.au CONTACT: Fiona Stacey, Exhibition Manager +63 9999 5464 [email protected]
global franchise 15
FIVE MINUTES WITH
Brad Fishman “We can provide franchisors with national media relations campaigns to attract quality franchisee leads” Global Franchise learns what drives the CEO of Fishman Public Relations
Franchisors saw public relations as a generate actually leads to somebody cost-effective way to help them attract making a life-changing decision to own potential franchisees. a business. THE FRANCHISING Why specialise in the What aspect of your work offers the INDUSTRY IS A GIANT franchising industry? greatest challenges? SEA OF OPPORTUNITY. Why not? The franchising industry is a As the owners of the PR agency, we’re NEW BRANDS ARE giant sea of opportunity. New brands are entrepreneurs. We started the company EMERGING ALL THE emerging all the time needing PR to get from scratch and put our blood and TIME NEEDING PR TO on the radar. Existing brands are always sweat into it over the past 25 years. As GET ON THE RADAR” looking for PR to grow, no matter their we grow, so does our base of employees. size. It’s non-stop. We get the chance Every move and decision we make to work with entrepreneurs and make impacts not just us, but them. We a real difference by helping them grow also know our clients are investing in their systems. us as a trusted partner to build their public reputation. These are all heavy What services can you provide responsibilities. The challenge is to keep for franchisors? Fishman Public Relations is the perspective and know that some factors We can provide franchisors with premiere PR firm in franchising, you can control and others you can’t. national media relations campaigns specializing in PR and content to raise awareness of their franchise marketing services to drive What’s the next step for Fishman opportunities to attract quality franchise sales and raise brand Public Relations? franchisee leads that convert to deals. awareness for franchise brands. We make a big deal at the agency about We also craft and execute national For 25 years, the media coverage it never becoming complacent. We’ve consumer awareness PR campaigns has secured has helped hundreds of grown to be the premier agency in designed to educate consumers and franchisors generate leads that have franchising. We continue to attract new provide Grand Opening PR support converted to deals. clients every day through best-in-class programs for new franchisees. We have service and great results. But we can’t What was your route into PR? expanded our services over the years get too comfortable, so we are always Actually, my wife Sherri is the PR to also include content marketing, innovating. I go to every franchise expert. My background is in business. which includes creating content such as industry event I can. I sit on boards. We When she started the firm over 25 franchise development blogs, e-books, are also involved in the PR industry to years ago, I saw tremendous growth info-graphics, animated videos, etc – any stay on top of trends. So when you ask potential in franchising-specific PR. type of compelling content that will help what’s next, I’m not giving away our I left the family business so I could help not only drive leads online, but educate trade secrets. All I’ll say is that whatever her expand the agency’s client base prospects as they research your brand is ‘next’ in franchising and PR, we’re on it. and manage the financial side of the and move through the sales funnel. business, allowing her to focus on media If you had to start over, what would you relations and client services. What affords you most satisfaction do differently? about your work? Bumps in the road are there for a When was Fishman PR launched? The work we do is meaningful. When reason. You learn from mistakes. It The firm was officially launched in we learn that a PR story we secured wasn’t always easy but it was our path 1991. Franchising was really taking attracted a lead that helped a franchisor that brought us to where we are. So I off as a business model, with new and seal the deal on selling a franchise, wouldn’t want to change anything. I’m existing concepts realizing that it was it’s extremely gratifying. As opposed grateful for where we’ve been and the best way to grow in new markets. to product PR firms, the coverage we where we are.
18 GLOBAL FRANCHISE
BRAND PROFILE
[ CAVAVIN ] RAISING A GLASS TO SUCCESS French wine specialist Cavavin has 32 years experience and 150 stores and welcomes enquiries from talented master franchisees
AVAVIN has been a concept, and high end presentation. French success story With over 150 stores, CAVAVIN for 32 years. This is the French leader in wine cellar story started in 1985 franchise. As an internationally Cwhen Michel Bourel, founder and expanding brand, we are looking for current chairman of CAVAVIN, partners who share our values and single-handedly opened his first spirit of business. As a CAVAVIN cellar. Through the pooling of master-franchisee, you will receive all purchases he organized, and thanks the support and expertise you need. to the logistic platform that he developed, he was soon associated FULL SUPPORT AND TRAINING with other cellar owners. The Training sessions to master both company and all CAVAVIN cellar wine knowledge (ranges and franchisees share a strong spirit upstream supply chain) and day- of entrepreneurship and have to-day operational organization. common strengths thanks to A qualified support team will help CAVAVIN’s franchise logistic and you set up your first cellar and train purchasing power. your staff. The dedicated head office CAVAVIN ‘s 150+ suppliers in wine support team will always be available and spirits are loyal partners, and to address any issue you may have, marketing programs and will help CAVAVIN is usually these supplier’s and will be on-hand for the entire support you. best client. Suppliers are selected for term of development. their exclusive and authentic products. CAVAVIN brings to its franchisees a PROVEN SUPPLY CHAIN Our French ratio for a single CAVAVIN WILL ENSURE wide range of products covering the CAVAVIN has over 30 years’ unit retail store is: YOU HAVE FULL - Year 3 reachable turnover of entire price spectrum and all customer experience in cost efficiency. We will SUPPORT FROM THEIR €1,000,000 if three efficient persons tastes, from really affordable items carefully fine-tune a full supply chain KEY SPECIALISTS and with a delivery service (super quality/price ratio) to premium solution for every market you want THROUGHOUT THE - A 30-40% growth margin (based on products. Depending on each cellar to target. DEVELOPMENT French competitive market). positioning and customer portfolio, we PROCESS” fine-tune the selection of products to OPERATIONAL SUPPORT You For a master franchisee the fit their customer base. will be supplied with tools to increase profitability including distribution In addition to the usual portfolio your efficiency, both before and after margin is at least at the same level. of French and world class wines, store opening. CAVAVIN is also open-minded when it comes to discussing customization A SET-UP CONSULTANT to match local habits, (a percentage CAVAVIN will ensure you have full MORE INFORMATION of local wines can be negotiated support from their key specialists in addition to CAVAVIN’s offers). throughout the development process. For further information please The other key success factors of the contact Olivier Mermuys, Head concept are based on a consumer- MARKETING EXPERTISE The of International Development at [email protected] friendly and easy-to-understand shop brand has an extensive catalogue of
20 GLOBAL FRANCHISE
BRAND PROFILE
[ FASTSIGNS ] SIGNS FOR THE TIMES Signage leader FASTSIGNS invites you to share in the success it has enjoyed in 2016 – and expects to exceed in 2017
t’s been one heck of a good year for FASTSIGNS. Back in January, the go-ahead graphics and visual comms Ifranchise made the announcement that it had signed no fewer than 63 franchise agreements in 2016, these agreements being made with both new and long term franchisees in North America and the UK. “In the third quarter alone, we inked 22 new agreements, including 13 locations in Western and Midwestern states, such as California, Florida, Texas, Kansas, New Mexico and Washington,” says Mark Jameson, franchise development administrator for FASTSIGNS. 2016 saw the company’s increasingly familiar red and blue logo being hoisted into position on 35 new franchise outlets. FASTSIGNS expects to open another 45 throughout 2017. On top of this and 400 U.S. and Canadian outlets it has targeted for development, the visual communications solutions signage specialist has more than 65 to their customers. Our satisfied international locations ready for franchisees are our best reference! expansion. “As part of the brand’s We are thrilled to be welcoming development strategy, FASTSIGNS so many new franchisees to the is also targeting co-brand and FASTSIGNS family.” WE LOOK FORWARD TO CONTINUING THIS conversion opportunities whereby RAPID EXPANSION AS 2017 BRINGS A STRONG print shop owners can expand their BUSINESS MODEL FOCUS ON THE NORTHEAST CORRIDOR, NEW services by adding FASTSIGNS to “Growth like this definitely ENGLAND, SOUTHERN CALIFORNIA AND BEYOND, their existing business or convert underscores the power of the INCLUDING ENTERING NEW COUNTRIES.” their business into a thriving FASTSIGNS brand and strength FASTSIGNS center,” Jameson says. of our business model,” echoes “2016 was another record year Jameson. “We look forward to MORE for FASTSIGNS,” agrees Catherine continuing this rapid expansion as INFORMATION Monson, president and CEO of 2017 brings a strong focus on the FASTSIGNS International, Inc. “Our Northeast corridor, New England, For information about network generated over $446,000,000 Southern California and beyond, the FASTSIGNS franchise in sales with strong sales growth in including entering new countries.” opportunity, contact Mark Jameson (mark.jameson@ all regions and countries. We have With careful planning and an fastsigns.com or 214-346- the highest franchisee satisfaction innovative product range, the 5679) or download an eBook ratings in the industry. Our FASTSIGNS brand has become the that explores the FASTSIGNS franchisees continue to lead the first choice of franchisees looking franchise opportunity at industry in advanced products and for a business whose products are in http://amzn.to/1FrnDJu. services and provide comprehensive constant demand and which adapts
22 GLOBAL FRANCHISE and leads changes in this energetic marketplace. As well as catering to the demands of every kind of business with a huge range of products which includes signs of all types and for every surface (including vehicles), the company offers an endless variety of graphics, promotional products and also design and marketing services. Future-proofing comes with FASTSIGNS digital product range, encompassing digital displays which convey information clearly and effectively in public spaces such KEY MANAGEMENT as transportation hubs as well as Once a candidate is accepted, their in healthcare facilities, corporate FASTSIGNS journey begins with offices, retail stores, restaurants and three weeks of brand and model countless other places. training with the key management Investors don’t need to take team in Dallas. Master franchises FASTSIGNS’ word for its success. are seen by FASTSIGNS very The company has garnered deserved much as essential components in recognition and numerous awards the machine driving the brand’s from franchising bodies: success. Master franchisees are industry or a related industry, have Franchise Business Review kept in the loop and up to speed proven management, multi-unit FBR50 Franchise Satisfaction through attendance at company and senior management experience Award 2006-2016 conventions, annual meetings and and be someone or some company other events. They are encouraged whose conduct proves satisfactory Franchise Business Review – to make visits to other countries and after thorough due diligence and Best in Category 2016 spend time understanding the unique background screening. Naturally, the Franchise Research Institute challenges offered by franchising in ideal candidate will have a passion World Class Franchise 2011-2016 that region. A typical FASTSIGNS for the brand and a hunger to help master franchisee initially owns and it grow. Interested parties will CFA Franchisees’ Choice operates one to two locations, and need have a minimum net worth as Designation 2011-2016 once they have a proven track record, determined by FASTSIGNS. CFA Awards of Excellence, Bronze the master franchisee will move on to “It’s important to join a brand Winner 2016. It is to be noted that sub-franchising. with a highly successful franchise FASTSIGNS is one of only a handful FASTSIGNS welcomes enquiries model and strong brand awareness,” of franchises approved for $21million from potential master franchisees says Jameson. “ FASTSIGNS is a in SBA financing for approved and franchisees who would like to top-rated franchise opportunity for franchise candidates take a share in its ongoing success. entrepreneurs who are considering A suitable candidate for FASTSIGNS a business with strong ties to the Ranked #1 2017 by Entrepreneur is a person or company with strong business community. FASTSIGNS magazine in the Sign & Graphics experience as a master franchisee or franchisees receive the blueprint category. area developer with other imported for success and ongoing support brands. The ideal candidate is likely and training to drive the new to have extensive experience in their venture forwards.”
GLOBAL FRANCHISE 23 BRAND PROFILE
[ 800PIZZA ] OWN A SLICE OF 800PIZZA! When it comes to Italian cuisine, why offer customers anything less than the real thing?
00PIZZA is committed to oven flown in all the way from the QUALITIES AND SKILLS offering traditional and ‘The Boot’ of Southern Europe. The operating values associated authentic Italian food, In 2010, 800PIZZA joined with the 800PIZZA brand are clear true to Italian culinary hands with Belhasa Hospitality, and succinctly expressed: ethical 8heritage through the use of high- which resulted in strong growth behaviour: simply doing the right quality ingredients, traditional of business. By October 2012, the thing; relationships: developing recipes and wood-fired baking. joy and satisfaction Mr. D’Ubaldo’s mutual trust and respect by validating The brand is considered by many brainchild brought to all its customers both customers and employees; pizza aficionados to represent the were not just contained within the learning: always growing, researching best in Italian restaurants in every 40sqm branch in Al Barsha, Dubai, and developing; success: operating a city where it has found a home; but had spread all over the city, with profitable and well-run organisation. yet it started from the humblest an additional six branches in Dubai Although there may be a number of of beginnings. Mr. Alessandro as well as five franchise units sold in viable franchisee profiles, 800PIZZA D’Ubaldo had been living in Dubai Abu Dhabi, UAE, five in Qatar, and management believes that it should since 1999; and in 2007, his passion three in Ajman and Sharjah, UAE. operate with franchisees that meet the for traditional, authentic Italian Alessandro’s ardent passion and wish following criteria: food (and the lack of places in which to share a taste of real Italian cuisine to enjoy it around him) inspired with people in this part of the globe Be entrepreneurs or corporates him to create a pizzeria of his has indeed proved to be a huge success. Have substantial F&B own. 800PIZZA opened its doors With new branches opening all the industry experience on March 8th in Al Barsha, Dubai time, 800PIZZA has demonstrated its – a modern, dynamic, forward- excellence in the food industry and Have relevant resources in looking name for a tiny gem of an has surely built a brand recognized terms of IT, financial, HR and establishment. Little more than a by many as the leading name in government liaison hole in the wall, in fact, it contained traditional and authentic Italian food. Be hard-working, with a desire the Italian owner’s pride and joy: a Could you play a part in taking the to succeed genuine, handcrafted wood-burning story further?
24 GLOBAL FRANCHISE HOW TO OWN A SLICE OF 800PIZZA
800PIZZA serves multicultural, middle-to-high income customers. The size of a typical 800PIZZA is between 450 sq.feet and 2,500 sq.feet. To find out more about ALESSANDRO’S becoming a franchisee with 800PIZZA, email franchising @800pizza.ae, or visit www.800pizza.com ARDENT PASSION AND WISH TO SHARE A TASTE OF REAL ITALIAN CUISINE WITH PEOPLE IN THIS PART OF THE GLOBE HAS INDEED PROVED TO BE A HUGE SUCCESS”
and fragrance. Only the finest Italian Have suitable locations shortlisted OUR FOOD, FRESH AND TASTY ingredients are used at 800PIZZA: and available in the countries they 800Pizza pizzas have a slightly burnt Parmiggiano Reggiano from Reggio operate in crust, a trademark of authentic wood-fired baking and something Emilia, Italy; Buffalo Mozzarella kept Possess good people skills of which the company is incredibly in its own milk and freshly imported including business, management and proud. The pasta is made at the from Caserta, Southern Italy; customer service skills time of ordering, and no pre-cooked Buffalo Ricotta; Pecorino Romano; Provolone Piccante; Scamorza Have the highest personal or pre-boiled pasta is used, and dishes are made entirely fresh, from Affumicata and Gorgonzola cheese. standards: excellence, honesty We bake our pizza toppings in our and integrity scratch. The dough is freshly made each day, according to 800PIZZA’s woodfired oven, including delicious Be able to work within a own recipe, combining a special combinations such as fresh red and system and blend of hard and soft flour imported yellow peppers, zucchini, eggplants, directly from Naples in Southern potatoes… the list goes on! And Demonstrate stability and maturity Italy, which produces the unique nothing is frozen, everything is Possess some relevant knowledge pairing of crunchiness and softness. freshly made each day. in the food and beverages field — and The dough is left to prove for over 12 have a strong desire to succeed hours to achieve maximum lightness
GLOBAL FRANCHISE 25 ®
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THE BFA GUIDE TO BRITISH FRANCHISING
In the wake of the highly successful Franchising Show in London, chair of the British Franchising Association Pip Wilkins offers an overview of UK franchising for those now seeing the UK as an ideal opportunity
practices, business procedures, franchise agreement terms and the support offered to franchisees. FRANCHISING HAS The size and stature of these SINCE FLOURISHED founding members and the bfa’s early INTO AN INDUSTRY work on business ethics restored THAT NOW HAS credibility to the franchise business OVER 900 BRANDS model, and with the economic boom of IN A MULTITUDE the 1980s and 1990s, many new brands OF DIFFERENT came into UK franchising and remain SECTORS” there today. Franchising has since flourished into an industry that now has over 900 brands in a multitude of different sectors. Long-gone are the days when it revolved around cars and catering, and nowadays its eclectic mix of RANCHISING UK tandem with huge growths in businesses includes everything from Putting it mildly, it’s been population, economic output and hairdressing to photography, pet care a challenging time for social change, and began to appear to children’s sport coaching. There’s business in the UK in recent internationally including in the UK something to suit your passion, Fyears. With the country’s economy for the first time. whatever it may be. having experienced its most severe As with any business boom, the Franchising has never been in better downturn for generations, it would quality of businesses in the area health than it is now. The authoritative be easy to overlook the UK as part of varied greatly, with some companies annual research into the state of the international expansion plans. For running with great business models industry, the bfa/NatWest Franchise franchisors in particular, that would and ethics, and others out there Survey, has shown both short and be a significant mistake. to make a quick buck. Eight of the long-term growth trends to be very That’s because despite the largest franchise brands in the UK at strong in the sector, including prior performance of the economy as a the time decided they needed to do to, and since the economic downturn whole, franchising has never been in something to differentiate their own in 2008. better health here after a remarkable ethical business practices from those These figures combine with period of growth. In 2015 the companies with bad ones, and as a impressive trends going back to before contribution of UK franchising was result, in 1977 the British Franchise the turn of the century, uninterrupted thought to be £15.1 billion, an increase Association (bfa) was formed. by the recession, which consistently of 46% over the past 10 years. The The founding member companies show around 90% of franchisees total number of people employed in of the bfa were ServiceMaster, Dyno- reporting profitability and less than franchising in the UK in 2015 was Rod, Holiday Inns UK, Kentucky 4% of franchise businesses failing for 621,000, of which 321,000 were in full Fried Chicken, Wimpy International, commercial reasons each year. time employment. This equates to an Ziebart GB, Prontaprint and Budget Those statistics compare favourably increase of 70% over the past 10 years. Rent a Car. With no previous set to figures estimating that between standards in the UK, the industry half and two-thirds of all independent HISTORY OF FRANCHISING thus created its own regulatory start-ups close within their first three IN THE UK body and accredited a company’s years. It’s clear that the advantages In the 1950s and 1960s, the popularity suitability for membership on inherent within a franchise business, of franchising really took off, in strict criteria related to operational including economies of scale and
28 GLOBAL FRANCHISE support of a large brand combined to their UK operations. Export with local marketing and business into international territories can owners, make them particularly robust be broken down as 30% operate and statistically much more likely in Europe, 8% in the US, and 17% to succeed. operate in other locations worldwide. Of those who do not currently operate LONG-TERM GROWTH internationally, one in nine would ABOUT THE AUTHOR For more than 20 years consecutively: consider doing so in the future. Pip Wilkins is the BFA’s CEO. She 1. The proportion of franchisee outlets ENTREPRENEURIAL SPIRIT has more than 16 years’ experience in the franchise sector, and is that close due to commercial failure is One side-effect of the downturn less than 5% annually (2015: under 1%) well-known and highly regarded in has been to increase the number of franchising for her dedication and 2. Around 90% of franchisees each people looking to self-employment depth of knowledge. Pip regularly year report profitability (2015: 97%) (redundancies and wage freezes have speaks at events and seminars both been commonplace). There are now domestically and internationally, EASE OF BUSINESS a record number of SMEs in the UK as well as writing for national, local The UK is known as a relatively easy and the idea of starting a business and franchise press. The British place to set up and run a business, has never enjoyed greater visibility. Franchise Association (bfa) is the and franchising is no exception There has been accordingly greater voluntary self-regulatory body for the UK franchise sector. The Association compared to the rest of Europe/the recognition of franchising in the media, with the sector’s PR at its promotes ethical franchising practice world. There is no franchise-specific in the UK and helps the industry strongest-ever levels. legislation in the UK, and no FDDs. develop credibility, influence and Full and fair disclosure is expected, favourable circumstance for growth. and the bfa’s Code of Ethics is widely BRANCHING OUT The UK is an ideal platform into referred to for legal guidance. The DIVERSITY further European markets later rise of domestic brands has helped Whilst nearly a third of franchise down the line. Cultural and linguistic give the franchise sector greater systems can be run from a home office, ease with many other countries awareness and credibility and allows nearly 60% of units involve a shop or make it the perfect bridge into both domestic and global businesses other retail premises. It’s a vibrant further potentially lucrative (and to happily co-exist in the market. and dynamic community: with the pro-franchising) markets such as Whilst 80% of franchises operating expansion seen in the last decade in France, Germany and Turkey, a route in the UK are home-grown, 38% particular, the number of business that global franchisors have been of franchisors award the master sectors and individual brands have taking in recent years. licences or control the franchising both risen exponentially. units outside the UK in addition THE BRITISH FRANCHISE ASSOCIATION Since its formation in 1977, the bfa has been centrally involved with discussions with EU policy-makers speaking at the UN on franchising matters. It has stringent accreditation criteria for membership, allowing those brands with ethical models to stand out from the crowd. The result is a thriving community with a genuine desire to share success and knowhow, and support others with the challenges they face. The framework is well-established for international brands to enjoy significant success in the UK market, and there’s a strong history of them doing just that. From traditional, world-famous brands to those newer to the scene, the path is well-trodden and paved with success stories of thriving businesses. For information on any aspect of franchising in the UK, visit the bfa’s website, www.thebfa.org.
GLOBAL FRANCHISE 29 ADVICE
DISCLOSURE DOCUMENTS
Disclosure documents arm you with the financial backstory you need before signing a contract, says Emma Lusty
s the old adage goes, franchisees before the franchise in smaller jurisdictions, is that bad failing to plan is planning is sold. As such, it is likely that, news travels fast and so, if there is a to fail. Franchisors who wherever you expand outside of the badly behaved franchisor trying to sell FRANCHISE are contemplating a UK, you will need to consider what franchises, prospective franchisees are DISCLOSURE programmeA of international expansion are the registration and disclosure likely to be able to find out about it. DOCUMENTS will have taken advice and consulted requirements in those jurisdictions. CONTAIN with experts regarding the structure FRANCHISE LITIGATION INFORMATION that their expansion should take and LEGITIMATE BUSINESS Franchise disclosure documents CONCERNING THE about how to fund their expansion For franchisors looking to expand generally contain information FRANCHISOR AND plans, for example. into countries with disclosure concerning the franchisor and its ITS FINANCIAL One matter that is often overlooked requirements, the additional work financial status and history. There will STATUS AND during this initial planning stage associated with selling franchises often be a breakdown of the minimum HISTORY” is the requirement for franchise- may seem disproportionate. investment requirements and initial specific registration and/or disclosure This is compounded by the fact and continuing fees payable by documents which often need to be in that, internationally, disclosure franchisees and details of any previous place (if they are necessary) before requirements vary greatly so a “one size or on-going litigation with which the a franchisor can sell a franchise fits all” approach cannot be adopted. franchisor is involved. A discerning and, in any event, before a franchise However, with the right advice and prospective franchisee will be able to agreement is signed. This oversight is guidance, local to each jurisdiction, obtain much of this information by common for franchisors who are based the disclosure process does not have to conducting its own research and asking in the United Kingdom because we do be, although it often is, a complicated, the right people the right questions not have any registration or disclosure expensive or time consuming exercise prior to buying a franchise, but a lot requirements for franchising in and there are many benefits to having of the data that must be provided by the UK so these matters are not disclosure requirements. franchisors will not be freely available necessarily on a UK franchisor’s radar. Franchising is an efficient and so the disclosure document is useful Once you have established into effective way to expand your business in ensuring that franchisees are aware which countries you wish to expand, both in the domestic market and of both the good bits and the bad bits you will need to take advice from internationally, however, the concept about its franchisor’s history so that local advisors regarding the local does sometimes attract bad press. they can make an informed decision franchise laws and, in particular, There are many horror stories about about whether or not to invest in a the local registration and disclosure businesses which fraudulently particular franchise. requirements. Local franchise and deceitfully make their victims As long as franchisees actually associations will usually have a wealth believe that they are investing their read the disclosure document that of easily accessible information along money to become a franchisee of a is provided, the requirement for with a database of affiliated lawyers legitimate business, but, instead, those franchisors to make disclosures does and other advisors with specialist victims are purchasing phantom, seek to ensure that franchisees conduct franchise knowledge. non-existent franchises. The theory at least some due diligence into the As the concept of franchising has is that a registration and disclosure franchise that they are acquiring, rather grown, many countries, in addition to regime will discourage franchisors than naively assuming that they are the United States, have implemented from being involved in such fraudulent investing in a solid business concept and franchise laws. There are now over and criminal activity which not only proven system. This should mean that 30 jurisdictions outside of the US benefits franchisees but also the there is less franchise litigation arising with specific disclosure requirements wider franchise community and the as a result of franchisees becoming which require franchisors to deliver reputation of the concept of franchising disillusioned when their franchise does a disclosure document to prospective as a whole. The reality, particularly not perform as expected or when they
30 GLOBAL FRANCHISE find out that something is not as they investment which will form the thought it would be. foundation of successful businesses The downside to strict disclosure for both franchisee and franchisor. and registration requirements is that The requirements do not always they can be seen to be a barrier to using evidence that the system works in a franchising as a method of international franchise model which is a key factor for expansion and even as a barrier to a prospective franchisee to consider. expansion into certain countries at all. In the UK, as I mentioned previously, An example of this is the “2+1” rule in we have no registration or disclosure China which requires franchisors to requirements or even any specific operate at least two company-owned franchise laws and franchising operations for at least a year prior to continues to go from strength to selling franchises in China. Fortunately strength. The British Franchise the “within China” part of this rule has Association holds its members to very been removed! Many countries require high standards of ethical franchising franchisors to have been trading for a which ensures that badly behaved number of years so new start-ups cannot franchisors will find it increasingly franchise in those countries. difficult to dupe prospective franchisees, ABOUT THE AUTHOR The perceived benefit of these rules regardless of whether or not franchisors Emma Lusty is a senior to franchisees is that they can see that are required to make specific disclosures associate at Hamilton Pratt a franchisor has a successful trading to prospective franchisees before signing (www.hamiltonpratt.com), a history before they part with their hard franchise agreements. So perhaps a specialist franchise law firm earned cash and, not only that, but tough franchise disclosure regime is not providing leading edge legal franchisors can show that their system the be all and end all after all. advice to the franchise sector. and brand works and is a worthwhile
GLOBAL FRANCHISE 31 SHOWS AND EVENTS
BFA IFA EFF INTERNATIONAL FRANCHISE WEEK 13th – 17th March, Royal Garden Hotel, London
unique event in the worldwide success and the problems the world. Franchisors need to come to franchising calendar, they have encountered. this Symposium to learn how to avoid International Franchise Aziz Hashim, IFA Immediate mistakes in different countries.“ Week 2017 brings Past Chair, Managing Partner, NRD John Pratt said of the symposium, togetherA 40 of the National Franchise Capital, LLC, will be our first keynote “International franchising is an option Associations from around the world, speaker on Thursday 16th March. to be considered by all franchisors and together with franchisors, franchisees, During this session, Aziz will discuss there would be no better way to start professional advisors, and suppliers his journey into franchising and how than attending this conference.” from those countries. franchising provided him the platform Day two will see keynote speaker With global expansion being a for development from starting with Paul Thompson, Founder of Water milestone in development for many one location, to be one of the top 200 Babies, give his experience in a session businesses, more and more franchises franchise operators in the US. He will on global expansion. Paul said, “It is a are looking to go international. The also cover areas such as the power of great honour to be invited to speak at the bfa IFA EFF International Symposium appetite to expand globally is seen all franchising around the world, how to use in March. This represents a truly over the world and franchising is the franchising for global growth, and how to be a power leader of a global brand. exciting opportunity for the franchising perfect model to support that ambition. Brian Smart, Director Europe, community to come together and share The franchise model’s structure International, bfa, will talk about their knowledge and expertise, at a time of a local business owner, combined preparing to expand your business of unprecedented growth.” with a proven system, support, brand internationally, covering selecting Andrew Brattasani, HSBC, and and economies of scale of the network the right country for your brand, Christophe Humbert, LCL Bank, as a whole is a powerful mix. and ensuring you have the correct will cover the different options that are Today more and more franchise strategies in place. available to you from banks to help with businesses are international. Many Interactive sessions also include your international expansion. This will home-grown franchises have already a ‘How to enter the EU Market’ from cover funding your franchisees and also made this leap, and with 38% now Farah Rose, International Franchising the ongoing relationship it is important franchising outside of the UK it Centre, and Emile Spruijt, CEO, to maintain with your bank. is a path that many are following. Straetus International BV, discussing The two days will conclude with One in nine brands are considering the different franchise structures a panel session on ‘The Changing franchising internationally in the that can be used when it comes to Face of Franchising from around the future, and 20% of our franchisors are international expansion, and also world’. Brian Smart, Director Europe, the master franchisees of businesses how to tackle language barriers and International, bfa, Josh Merin, from outside the UK. This can be legal requirements. Director of International Affairs, US, very positive for the UK economy, as Worldwide trends in regulation Chantal Zimmer, Executive Director, it means that much of the revenues will also be covered in a panel session FFF, Carol Chopra, Executive Director, generated by the franchise businesses that includes Mark Forseth, V.P. EFF, and Andrew Nugroho, Chairman, in the UK remain in this country. & Asst. General Counsel, Marriott APFC, will share their experiences as The bfa IFA EFF International International, Carl Zwisler, leaders of the industry. Discussing how franchising has developed throughout Franchising Symposium in London Principal, Gray Plant Mooty, their careers, the challenges they faced, on the 16th & 17th March aims to be a Olivier Binder, Granrut, Anders , Advokatfirman Nova, and the challenges they see that others one-stop shop of information, where Fernlund John , Hamilton Pratt and may face in the future. people can leave feeling confident that Pratt Nicola Broadhurst, Stevens & Bolton. They Other topics included range from they have received the knowledge to will be discussing the most recent legal the future of digital marketing to the expand their business internationally. developments from around the world. nuts and bolts of different markets. The Symposium will showcase Anders Fernlund commented on the Join interactive roundtables discussing speakers from the US, Europe and the legal aspect, “Strange regulations topics such as: the UK, sharing the realities of their regarding franchising pop up around
32 global FRANCHISE itt ew n H Gavi
att Pr John
THERE ARE n o ps PLENTY OF om Th OPPORTUNITIES Paul TO NETWORK INCLUDING OUR GALA DINNER.”
im Managing franchise resales sh Ha Aziz Use of social media for recruitment e os h R Franchising in the UAE Fara Brexit – will it make a difference? Training – Do it yourself or use an external training provider? With interactive and expert-led sessions for you to join over the two Territory mapping days, it is an event not to be missed. Using franchise exhibitions to For more information and to download FURTHER INFORMATION recruit franchisees. the full brochure, visit www.thebfa. It won’t be all work and no play! There org/internationalfranchising, contact WHAT: International Franchise Symposium will be lots of opportunities to network, the bfa at [email protected] or WHERE: Royal Garden Hotel, Kensington, London including our Gala Dinner on Thursday call 01235 820 470, and keep an eye on WHEN: 16th & 17th March 2017 16th March. This will include our after our social media channels for exciting WEBSITE: www.thebfa.org/InternationalFranchising dinner speaker, Gavin Hewitt, BBC updates in the run up to the event. CONTACT: 01235 820 470 News’ Chief Correspondent. We look forward to seeing you there!
global franchise 33 Business is personal.
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BRAND PROFILE
[ PREMIUM FRANCHISE BRANDS ] SUCCEED WITH AN AWARD-WINNING GLOBAL FRANCHISE PLATFORM Premium Franchise Brands is a leading franchisor of commercial and residential cleaning services through its Jan-Pro and Maid Right franchise brands
ABOUT MAID RIGHT has grown rapidly since its inception well as seasoned cleaning industry Maid Right® Franchising LLC, in April 2013. Adopted from JAN- executives. Today, the international a subsidiary of Premium Franchise PRO’s successful model, local company structure is comprised Brands LLC, delivers superior owners focus on serving clients and of master and unit franchisees. cleaning services for homes. strengthening client relationships, Jan-Pro, a subsidiary of Premium Founded in April 2013, Maid Right while master franchisees provide Franchise Brands, regularly receives has established franchise locations clients, marketing support, training accolades from around the world. across the United States and Canada. and development. See more at: http:// Jan-Pro utilizes a two-tiered Maid Right’s owner-operator business maidright.1851franchise.com/info/ franchise system which creates model and branded processes ensures index.html#sthash.AYH02jrj.dpuf multiple franchise opportunities its residential clients get a long-term suited to different types of service commitment from established ABOUT JAN-PRO business owners. cleaning crews as well as access JAN-PRO was founded in 1991 by to professional-strength cleaning Jacques Lapointe in Providence, WHY JAN-PRO? products and new technologies in Rhode Island, with a desire to JAN-PRO offers both master their homes. For more information offer the highest-quality cleaning and unit franchise opportunities. about franchising opportunities, techniques and systems available. Master franchisees can tap into please visit: www.maidright.com Currently, the JAN-PRO team is a rapidly growing industry that /franchising. comprised of business leaders with generates total sales of $155 billion experience around the world, as globally with a recession-resistant WHY MAID RIGHT Maid Right, which incorporates the best practices of sister company AT A GLANCE: JAN-PRO, the leading franchise in the commercial-cleaning industry, Name of Franchise: Maid Right Franchising Established: 2013 Number of franchised outlets: We are a master franchise concept and have 40 master franchisees and 200+ unit franchisees Location of units: We are in North America primarily: Denver, Reno, Atlanta, Miami, Dallas, Houston, Portland, Minneapolis, Southern NJ, Westchester County, NY, Fairfield County, CT, Calgary, AB, Oakville, ON, Vancouver, BC, Houston, TX, Cincinnati, OH, Dayton, OH, Phoenix, AZ Investment range: Unit franchise opportunity ranges from $1,600-$40,000 and regional master franchise opportunities range from $218,000-$396,000 Minimum required capital: Unit franchisee needs $2,500 liquid capital, master franchisee needs $250,000 liquid and $1,000,000 net worth minimum Web: www.maidright.com www.maidright.1851franchise.com Contact: [email protected] 678-336-1786
36 GLOBAL FRANCHISE business model. Unit franchisees Successful track record of business can enjoy a low-risk way to start and/or sales management experience. their own business. JAN-PRO is consistently recognized as a major Liquid assets or access to initial JAN-PRO force in the commercial cleaning start-up funding of $250,000+ RANKED #1 IN industry. This includes: Preparedness to either already COMMERCIAL CLEANING BY Sales of over $400 million reside in, or relocate to, a selected metropolitan market. ENTREPRENEUR Nearly 8,000 franchisees FRANCHISE 500 internationally Unit franchisees can reach out IN 2017.” to master franchisees in their area Awards for industry-leading or request a consultation to learn practices, fast growth more about business ownership JAN-PRO provides master and opportunities. unit franchisees alike with the See more at: http:// systems, support and training they janpro.1851franchise.com/info/index. need to succeed. Master franchisees html#sthash.js0iEzpN.dpuf must possess:
AT A GLANCE:
Name of Franchise: Jan-Pro International Established: 1991 Number of franchised outlets: We are a master franchise concept and have 140 regional master franchisees with 8,000 unit franchisees in 16 different countries. Location of units: We are in every state in the US except North Dakota, South Dakota, Iowa, Hawaii, Montana,Wyoming, Alaska and Maine. We are also in Saudi Arabia, Canada, Mexico, Nigeria, South Africa, Poland, Peru, Panama, UAE, India, South Africa, England, Bahamas, Dominican Republic, Australia, and New Zealand Investment range: Unit franchise opportunity ranges from $950-$50,000 and regional master franchise opportunities range from $152,500-$768,000 Minimum required capital: Unit franchisee needs $1,500 liquid capital, master franchisee needs $100,000 liquid and $500,000 net worth minimum Web: www.jan-pro.com www.janpro.1851franchise.com Contact: [email protected] 678-336-1786
GLOBAL FRANCHISE 37
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[ RESTORATION1 ] THE OTHER EMERGENCY SERVICE Restoration1’s CEO, Gary Findley, talks restoration franchises and why this one has become a national leader
estoration 1® is a its footprint and has anchored itself as 500®, the world’s first, best and most recognized national the fastest-growing and most-trusted comprehensive franchise ranking. leader in the emergency emergency mitigation and restoration Recognized by entrepreneurs and restoration industry franchise in North America. Since franchisors as a top competitive Rfor mold, water, fire and smoke taking the helm at Restoration 1 tool of measurement, the Franchise damage, handling jobs of all sizes in January of 2016, my focus has 500® placed Restoration 1® from across the nation for residential and primarily been on developing a #383 in 2016 to #96 this year for our commercial properties. We have been strategic direction for the company exceptional performance in areas a trusted name in home remodeling and its network of franchisees. With including financial strength and and restoration since 2008, and my vision, integrity, and passion the stability, growth rate, and brand power. started in Pompano Beach, Florida. In company added over 75 locations Having been in franchising for over 2016, I was offered and accepted the in 2016, exceeding my target of 100 25 years, representing over a dozen position as president and moved the locations by end of the year. brands, I look for these five major company headquarters to Waco, TX. Restoration 1® was recently ranked factors in purchasing a franchise: Restoration 1® continues to expand in Entrepreneur Magazine’s Franchise
40 GLOBAL FRANCHISE weekly to analyze restoration services available. We and strategize for even offer 24/7 emergency services! the growth of their Addressing the issues early on can individual Restoration make a big difference to the extent WE WORK DIRECTLY 1 franchise. Our ethics, of the damage. WITH THE HOME professionalism, Starting 2017 we will be adding OWNER’S INSURANCE quality, and to our services: content cleaning, COMPANY OR Low investment availability are carried out at each of reconstruction, and a national ADJUSTER TO KEEP our franchise locations. Our team is catastrophe team, which already IT AS SIMPLE AS Low overhead committed to giving franchisees the began operating this year. We will be POSSIBLE. WE HELP High margins support system they need to succeed adding new operating software for our OUR CUSTOMERS in these same areas. Restoration 1 franchisees to assist them in becoming THROUGHOUT THE No brick and mortar franchisees can reach full potential more profitable. In addition to these PROCESS, CAUSING with our superior training, technical things we will continue to add to our THE LEAST AMOUNT Recession resistant support, and in-territory support. We staff industry experts with years in OF DISRUPTION IN Over my many years of franchising offer old-fashioned service in a high- this industry and who will add to THEIR LIFE” and numerous opportunities of tech environment. our core team. helping people choose a business, The main way in which we differ The restoration business is an these are key elements I would look from our competition is that we estimated $60 billion a year industry, for in a business today and which have represent the individual home or providing emergency restoration been instrumental in my personal business owner. We work directly with industry for mold, water, fire, and decision making. Not every good idea the home owner’s insurance company smoke damage. We all know disasters makes a good franchise and not every or adjuster to keep it as simple as don’t wait for a convenient moment franchise is a good idea. Three things possible. We help our customers to strike, but we want to have a make a great franchise system: your throughout the process, causing the Restoration 1® business available support, your staff, and the success of least amount of disruption in their life. when they do. Our goal is to find your franchisees. If franchisees aren’t We treat the home or business as if it a master franchisor to bring this happy, nobody’s happy! were our own. Customers always come exciting profitable concept to the U.K Our ideal franchisee is a driven, first. We offer a free full inspection and this year and to have a total of 500 service-focused, passionate evaluation. While not all inspections locations in North America over the entrepreneur, and professional looking or evaluations will result in jobs, we next four years. For more information to own their own business, military can give the client free advice on about Restoration 1®, please visit or civil service workers. We have the best way to handle their specific www.restoration1.com. many people coming out of corporate situation. At Restoration 1® we put America with little or no experience people before profit. in the industry who have been very In addition, regardless of how AT A GLANCE: successful following our proven extensive the damage is, Restoration business model. 1® has the equipment and the Name of Franchise: Restoration 1 We equip our franchisees with a techniques to repair and restore the Established: 2008, leadership change in 2016 – 12-day training program that fully property. Customers are amazed added over 75 locations prepares them to offer their services as at how quickly and thoroughly we Number of franchised outlets: 105 soon as they return home. In addition, work to get their properties back to Location of units: across the U.S. continued education is offered their pre-damaged state. We only use Investment range: $77,950-$175,100 throughout the year. We also provide high-quality materials and operate Minimum required capital: 50,000 superior support from the home above code requirements so that our Web: www.restoration1franchise.com team and a designated experienced customers can relax, knowing that Contact: Gary Findley, [email protected] field consultant to meet with them their properties are receiving the best
GLOBAL FRANCHISE 41 ADVICE
SUCCESS THROUGH RESALES
Buying a resale franchise can be a route to success at a bargain price, says Johnny Sellyn
A FRANCHISE RESALE CAN GIVE YOU SOME SOLID INFORMATION YOU MIGHT NOT GAIN FROM A NEW ONE… THERE CAN BE SUBSTANTIALLY LESS RISK AT A LOWER COST”
magine that you just saw a You are dazzled and in a bubble of little love and care, you find that many beautiful new neighborhood contentment when common sense just require some cosmetic attention: with lots of on-trend new takes over and you finally ask the a little paint, some landscaping and homes being constructed. It agent about the price, which turns the ability to see beyond the obvious. Icatches your eye and you immediately out to be much more than you can You realize it may take a bit more decide to stop and have a look afford. He explains that you can lock time to check out the inner workings around at the model homes. As you yourself into a long-term loan while of the home’s systems such as the walk through the models, you see you work to increase your income to plumbing and heating, but you also contemporary counters and cabinets, afford the house. He tells you that in know that this construction has a new type of tile flooring that looks several years time, the home will be already weathered many storms. You like wood, and the hot colors of the a good investment but all you can see see a few improvements that you year on the walls. The real estate ahead of you is spending most of your could easily make because you have agent points out the accent tile in the time working and not getting to spend experience in such matters. bath imported from Italy and the cut- much time in your new home! It doesn’t take much to see that glass pendant lights that cast special You decide to take another path this scenario is another way to look shadows at night. and look at previously-occupied at franchising. Many people are homes. Although some of them need a drawn to trendy new franchises
42 GLOBAL FRANCHISE that are pasted all over the internet work as hard, may have had illness oriented they are, judge how well and media, which causes a kind of in the family or want to retire. maintained are the facilities, ask feeding frenzy; everyone wants one. What does this mean to a around the community to see what People want to be in on the next big franchise buyer? It means that if the reputation of the business is thing. They think perhaps that their you view the life cycle of a franchise and find out other information that franchise is so popular that they can resale in the same way, then it makes might make you feel secure in buying do almost everything wrong and perfect sense that someone would the business. In short, there can be still succeed. want to sell a successful business, substantially less risk at a lower cost. However, the reality is quite one that isn’t as shiny or new, or one Buying a franchise resale may different. Although there are still that is just too much of a burden require less financing, may give those 'golden' franchises that pop for them to manage. Their loss can you better access to financing (you up and are very successful (albeit be your gain. In many situations, can show the bank a track record), maybe in the short run), the cost of the owner has been less involved and you may be able to show the buying a new franchise may be too in the business (may even be an bank that you have talent/training/ high for your lifestyle so that you absentee owner), does not have the credentials that make you ideally will be taking a bigger risk than you skills necessary to keep up with the suited to re-energize the business can handle. You will also not know, times or has just plain lost their and create a very profitable business. no matter what the franchisor tells motivation. This gives a resale buyer In many cases it is easier to make you, just how YOU will adjust to an ample opportunity to use their a positive impact on an under- owning a new franchise where the own enthusiasm to create success performing business than it is to responsibility for attracting new and rejuvenate the business. maintain the high level of sales if customers, establishing systems, A franchise resale can give you you buy a business that is already at hiring all the employees, and signing some solid information you might its peak, when you have the added vendor contracts falls on your not gain from a new one. You will pressure of always having to keep shoulders. Although new franchises be able to see solid financials (not it there. Paying less for a business usually come with training, it is still estimates), view the actual location that needs some TLC means you can very different when an owner is and see traffic patterns, meet the implement the improvements and involved in day-to-day operations. employees and see how service- benefit from them yourself!
RESALE PERCEPTION So why is the perception of buying a resale often one of 'what’s wrong with it?' Most new entrepreneurs go into a business thinking that no one would ever sell a successful business, one that is making money. There is a general feeling that if a business is doing well than no one should want to leave it. The reality is very different and also has implications for those starting any business. Different people are in different stages of their lives. Just as in a product life cycle, there is a curve where a product grows, peaks and then falls off. In early years, people want to work longer hours, are more career driven and yearn to get ahead. By mid-life many are busy raising families, shuttling kids back and forth and still trying to secure their future. By later years, many have decided that they just don’t want to
ABOUT THE AUTHOR Johnny Sellyn is the CEO of Franchiseresales.com
GLOBAL FRANCHISE 43 International Franchise Week hosts Franchising Symposium 16th & 17th March 2017, Royal Garden Hotel, London Today more and more franchise businesses are Discuss topics from the future of digital marketing international. In the UK, 20% of our franchisors to the nuts and bolts of different markets. Get are the master franchisees of businesses from up to date on worldwide trends in regulation with outside the UK. Of our home-grown franchisors, some of the leading franchising lawyers regarding 38% now franchise outside of the UK. One in nine opportunities and challenges facing franchising in brands are considering franchising internationally the future. Join interactive roundtables discussing in the future. The appetite to expand globally topics such as managing franchise resales, use is seen all over the world and franchising is the of social media for recruitment, franchising in the perfect model to support that ambition. UAE and Brexit – will it make a difference?
Our bfa IFA EFF International Franchising This is an event not to be missed. For more Symposium in London on the 16th & 17th March information, contact the bfa at will give all our delegates an opportunity to find [email protected] or call out more about global expansion and meet the 01235 820 470. Keep an eye on our social media people with the skills and experience that make it channels and website for exciting updates in the happen. run up to the event.
The Symposium will showcase speakers from the We look forward to seeing you there! US, Europe and the UK sharing the realities of their worldwide success and the problems they www.thebfa.org/IFW have encountered. ADVICE
PREPARING TO GO GLOBAL
Gordon Drakes guides you through the maze of considerations involved in going global
HY CHOOSE new income streams and expensive and competitive domestic FRANCHISING? relationships with new customers market. An early symptom of Brexit Markets for goods without the need for significant has been to reward UK businesses and services have capital investment and an extensive which are able to repatriate becomeW increasingly globalized and management infrastructure. foreign earnings. for many successful businesses, there comes a point in their growth cycle WHY GO INTERNATIONAL? HOW TO STRUCTURE AN where the demand for their products Done in the right way, the execution INTERNATIONAL FRANCHISE and services outstrips their ability of a businesses’ international The key to success is obviously to meet that demand from their own franchising strategy can become a having a strong business concept, capital and human resources. core asset of the business, helping which can be operated as a franchise Franchising provides a tried and to secure the long term future of system and successfully adapted tested means of extending a business’ the business as a global brand and to the target market. However, that reach into new markets, allowing hedging the impact of economic risks alone is far from sufficient to optimize rapid expansion and the in the domestic market. Indeed, a a business’ chances of success. It is generation of number of established UK brands necessary to ensure that the overall rely increasingly on the international structure adopted is one that suits the business to drive growth, given individual business. Basically, from the low rates of growth a legal point of view, there are five seen in saturated, options when it comes to structuring an international franchise; Master franchising - the franchisor grants a third party the right to operate the business themselves and/or grant sub-franchises to third parties within a substantial territory. The master franchisee effectively becomes the franchisor for that territory, operating the business and recruiting, training and managing a network of sub- franchisees. This may be appropriate where the concept is suited to multiple units and low levels of entry cost. Direct franchising - the franchisor grants a third party the right to operate a single site
GLOBAL FRANCHISE 45 ADVICE
business themselves. This may be HOW TO CHOOSE THE THE LEGAL CHALLENGES appropriate where the concept is not RIGHT STRUCTURE OF GOING GLOBAL suited to multiple units (international Certain types of businesses are suited Whatever structure is adopted, THE BEST WAY schools, luxury retail or fine dining to certain types of structures, as the international strategy must be TO PROTECT restaurants, for example) or where indicated above, but there are a few designed to identify the regulatory CONFIDENTIAL a franchisor prefers to have a direct other points to consider which can and legal hurdles at any early stage. INFORMATION IS TO relationship with multiple operators guide the decision making process. Brand protection - businesses KEEP DISCLOSURE in a single territory. For example: should invest prudently to ensure that TO A MINIMUM Multi-unit developer franchising - What resources do you have? each target market will be underpinned UNTIL THE PARTIES the franchisor grants a third party If your business has a large reserve by registered trade marks, design rights HAVE ENTERED INTO the right to exploit a designated of manpower that is experienced in (if appropriate) and domain name THE FRANCHISE territory by opening outlets and/or franchising matters and plenty of registrations. This is a costly exercise, AGREEMENT” providing services themselves. The cash to throw at the project, direct but the cost (financial and loss and developer therefore needs to have franchising might be safer and more opportunity) of dealing with pirates considerable financial and other cost effective in the long run in certain and cyber squatters or claims from resources. This structure is used jurisdictions. If you have much more local third parties with prior rights far commonly in retail franchising. slender resources, then it may be outweighs the upfront protection costs. Sub-ordinated equity or joint that a master franchise or multi-unit Pre-contractual protection - venture franchising - this is often used developer approach suits you best. before the parties sign the franchise together with a multi-unit developer What is the target market? agreement, they will inevitably structure where the franchisor wishes Understanding the size and make exchange sensitive information. to own a shareholding in the developer. up of the target market is crucial. Businesses should only disclose this This may be for a number of reasons What is likely to work for a small information under the protection of including where there is a need to and geographically close market like a robust confidentiality agreement. obtain third party investment. To Ireland, may well not be appropriate However, the best way to protect facilitate this structure, the franchisor for a large regionalised and distant confidential information is to keep and a third party create a special market such as China or India. It is disclosure to a minimum until the purpose vehicle (“SPV”) and enter vital to prioritise target countries parties have entered into the franchise into a joint venture agreement or realistically; both in terms of potential agreement. The Manual is the crown subordinated equity agreement. The scale of the market, but balanced by jewels of any franchised brand, and new SPV acts as the developer and ease or difficulty of market entry this document should not be disclosed the franchisor grants the developer and support. until the franchise has been signed. In the right to exploit a designated Who is your ideal partner? addition, it is the franchisor who will territory by opening outlets and/or If you are aiming for a large blue chip incur legal costs leading up to signing providing services themselves. The partner, it is likely that the multi-unit the franchise agreement, so at the stage key difference between a joint venture developer or sub-ordinated equity/ of either signing the confidentiality and a subordinated equity structure joint venture route will be most agreement or agreeing heads of terms, is the level of control and day to day appropriate. However, if the partner the franchisor should request a deposit, involvement of the franchisor in the is a smaller, more entrepreneurial which will deducted for any upfront fee management of the SPV/developer. organisation, a master franchise under the agreement or, in the absence Joint ventures tend to require more approach may be more appropriate. of an agreement, it is refunded less the involvement of the franchisor whereas It is vital to establish a partner franchisor’s costs. subordinated equity structures are recruitment process which International regulation - designed for minimal franchisor selects the right candidate for the franchising is regulated in a significant involvement (save over a few key brand business. The first few international number of countries that have protection/standards issues) but with franchisees will be ambassadors for franchise-specific laws, whilst others an option for the franchisor to buy back those who follow – for better or impose a complex and challenging the entire issued share capital of the for worse! regulatory environment through more SPV at a later point in time. Is there enough of a margin for general commercial laws. These laws Management franchising - the you and the partner? regulate the franchise sales process, the franchisor grants the property owner It is important to understand how content of the franchise agreement and the right to operate an outlet at a given your business can make money out of some require that the documentation location. Generally, the property owner international franchising. Is it related be filed on a public register. will engage a management company to the supply of goods? Is it linked These compliance issues can impact to operate the business on their behalf, to the ongoing supply of support/ on commercial timelines for doing which could be a local company or central services? Is it merely attached deals and opening sites should be an affiliate of the franchisor. This to the use of the brand and know- identified at the planning stage. structure is very common is the hotel how? Different answers will lead to Regulation of the sales process - & leisure sector. different conclusions as to the most countries such as the USA, Canada, appropriate structure. Australia and China require set form
46 GLOBAL FRANCHISE pre-contractual disclosure. Key Registration requirements - some disclosure issues include the how jurisdictions require the franchisor ABOUT THE AUTHOR and when the disclosure must be to register only relevant details, made, mandatory cooling off periods whilst others require registration of Gordon Drakes is a commercial before the deal can be finalised and all the documentation. In developing lawyer specialising in franchising the scope of the content of the sales markets this is to enable the at the European law firm, and disclosure documentation. The government to monitor franchisors Fieldfisher. Fieldfisher’s multi- consequences of a failure to comply doing business in the market whilst sector, global franchising practice with disclosure requirements vary. in more developed economies is top ranked in the UK and Non-compliance generally entitles (such as the USA and Spain) it is to globally by the legal directories the franchisee to walk away from ensure transparency and maintain and four of the team (including Gordon) are ranked as leading the agreement without restrictions a certain level of quality. In some practitioners by Who’s Who Legal provided it acts within a reasonable countries, there are multiple Franchise 2016. www.fieldfisher. period of entering into the agreement. registration requirements. For com/expertise/franchising The franchisee can also sue the example, franchisors in China who franchisor for damages. Some sell franchises in just one province, jurisdictions also impose fines for must file the information at the an experienced legal counsel who failure to comply. local office of the MOFCOM of that has walked down this path before Regulation of contractual terms province, whereas for cross-province and can manage the international Franchise-specific laws in certain franchising the papers have to be filed compliance on your behalf can be countries impose mandatory with MOFCOM itself. Franchising is the difference between success and contractual terms in the franchise also regulated by a variety of general failure. It is also crucial that the agreement. These often include a laws such as the duty of good faith, business has “bought into” franchising minimum term, a duty of good faith, anti-trust law, unfair competition at the board level. Once the strategy restrictions on termination and law, agency law and consumer law and structure are in place, rolling restrictions on post termination, non which must be taken into account. out a franchise internationally can competition clauses and so on. These be a relatively low risk/high reward mandatory provisions may impact CONCLUSION venture, and one which over time on the proposed business model and There is no one-size-fits-all solution will generate significant income and change the terms of the commercial to international expansion. Such ultimately a paradigm shift in the way deal on offer. ventures need to be carefully the business operates, evolving from a structured to reflect the needs of domestically-focussed business with the business, the target market an international presence into a truly and the franchise partner. The global brand. most appropriate structure needs to be determined at the outset as restructuring an international franchise is a complex, costly and time-consuming exercise. Choosing to work with
GLOBAL FRANCHISE 47 Helping others has never been so rewarding BrightStar Care is coming to the United Kingdom We are currently offering Master Franchise opportunities in the UK for well-qualified candidates. Our commitment to the highest standard of in-home healthcare provides our franchisees with multiple revenue streams resulting in the highest disclosed average unit revenues.
Getting started is easy. Call us at: 877 689 6898 Or get your Franchise Information Kit at: brightstarfranchise.com/global ADVICE
ARE YOU PREPARING FOR GDPR?
The EU’s General Data Protection Regulation comes into effect in May 2108 and its implication could be far-ranging, says Geoffrey Sturgess
n 25th May 2018 the EU’s such information directly from including safeguards, security General Data Protection enquiries and pass it on to their measures and mechanisms. Regulation (GDPR) franchisees. Less commonly they Some organisations will need to comes into effect across carry out processing of customer data appoint a Data Protection Officer. Oall the EU and EFTA member states, on behalf of their franchisees. They This is very unlikely to apply to replacing the Data Protection Act always hold the personal contact franchisors or franchisees, however in the UK (DPA), the Federal Data information of their franchise or franchisors should consider Protection Act in Germany (BDSG) master franchise principals. giving a senior member of staff the and similar data privacy laws in The key changes brought about by responsibility for implementing all those states. It will be enforced GDPR are: GDPR changes. by local data protection agencies It now covers data controllers and courts and provides for fines based outside the EU if the Data controllers must notify for defaulters of up to 4% of global processing relates to the offering of supervisory authorities of a personal turnover or, if higher, EUR 20m. It has goods or services to data subjects in data breach within 72 hours of huge implications for international the EU, or the monitoring of their becoming aware of the breach, unless and national franchisors. behavior that takes place in the EU. it is unlikely to result in a risk for the GDPR tightens and extends the rights and freedoms of individuals. rules governing the processing Penalties are increased. of personal data by organisations The requirement for data subject but processing still means doing Both data controllers (the consent is much increased. anything with it and personal data owners of the data) and those that process it for them will have a new GDPR applies directly to both data still means any information about an controllers and processors. Processing identifiable living individual. It could obligation to document their data processing activities so that they carried out by a processor on behalf be just an email address. Franchisors of a controller needs to be governed commonly obtain customer or are able to demonstrate compliance with GDPR. That documentation by a contract which needs to specify customer contact information from that the processor should only act franchisees and maintain a central will have to be comprehensive and regularly updated. on instructions of the controller, the database. Sometimes they receive relevant staff would be under a duty Data Processing Impact of confidentiality, necessary security Assessments should be carried out and organisational measures will be FRANCHISOR ESSENTIALS when the processing is likely to in place, that processing activities result in a high risk for the rights may only be sub-contracted with the Give a senior member of staff responsibility for and freedoms of the individual. prior consent of the controller, that implementing GDPR changes. For example it includes medical the processor will assist the controller Consult with master franchisees/franchisees on information or racial information. in making sure he complies with the how to do so and changes to franchise documentation The assessment should contain necessary obligations in relations and procedures. a description of the processing to data subjects and to data breach Produce a data processing “statement” setting out operations to be undertaken by the reporting, return or erase any personal what you do and why. processor, an assessment of the data on request by the controller at Stop processing unnecessary personal data. necessity and proportionality of the the end of the service contract, and Introduce new consent procedures and processing operations in relation make available to the controller and record keeping. to the purposes, an assessment of the relevant supervisory authority all Don’t forget that franchisees too will be data the risk to the rights and freedoms necessary information regarding the controllers and will need to be helped to comply. of data subjects, and the measures processor’s processing activities. This envisioned to address the risks would, for example, apply to a hosting
50 GLOBAL FRANCHISE contract. Many hosting contracts are non-compliant. Controllers are required to provide information to data subjects about the controller and the proposed processing. In most circumstances they must obtain the consent of Franchisors and their franchisees the data subject to the processing. are likely to be joint controllers of Notices need to be provided to data much of the data—as each is using subjects, and consent obtained, even it for its own purposes, not on FRANCHISORS AND when the personal data was supplied behalf of the other. GDPR requires THEIR FRANCHISEES by someone else. Franchisors will an arrangement between them ARE LIKELY TO BE probably need to update procedures setting out their respective roles JOINT CONTROLLERS and operating manuals so that and responsibilities. This suggests OF MUCH OF THE franchisees are required to give such the need for amended franchise DATA—AS EACH IS notices on behalf of the franchisor contracts or specific data processing USING IT FOR ITS before passing the data and evidence agreements. OWN PURPOSES, of the consent to the franchisor. The requirement to obtain consent NOT ON BEHALF OF to processing from data subjects is THE OTHER” FRANCHISORS’ TO-DO LIST: much strengthened. Consent means the “freely given, specific, informed Assess personal data held and unambiguous indication of the by franchisor, country master data subject’s wishes” in a statement franchisees and franchisees and its or by a “clear affirmative action”. It flows around the ‘group’. is suggested that this spells the end Identify any personal data that it is of the “tick (or un-tick) box if you unnecessary to hold. don’t want…..”. Furthermore, the data ABOUT THE AUTHOR subject will need to be informed of Redesign information systems to all the processing to be covered by Geoffrey Sturgess is a avoid collecting unnecessary data. his/her consent and the length of consultant solicitor at Warner Goodman in Southampton and, Update privacy notices/consent time that the processing is likely to continue. Records will need to be kept as well as being an international forms and their delivery mechanisms. technology contracts lawyer, showing who has consented to what. is their nominated franchise Establish what processing requires GDPR has serious implications consent and design systems for specialist and the person for most businesses doing business responsible for their BFA obtaining consent. in the EU, not least for franchisors, Affiliate status. He is also their but this is not yet generally realised. Establish identity of any data data protection expert and Having regard to the time it can take processors and consider relevant advises clients on data privacy to introduce new procedures and contract terms. compliance in the UK and contract clauses into a franchise elsewhere. geoffreysturgess@ Produce a data processing network, Franchisors would do well warnergoodman.co.uk. statement setting out what, how etc. to start preparing for it now.
GLOBAL FRANCHISE 51 BRAND PROFILE
[ COYOTE UGLY ] A WORLD FAMOUS CONCEPT TRANSCENDING CULTURES AND LANGUAGES! The Most Famous Bar on the Planet continues its aggressive growth across the globe
fter a highly successful Global Franchise magazine asked who owns other bars, restaurants, and 2016, the Coyote Ugly Justin Livingston what it’s like to karaoke bars. He had good experience team looks ahead to open bars in such diverse markets and wanted to bring a very American- an epic 2017, with new and how they adapt to different style concept into the market to create internationalA franchise agreements cultures? Coyote Ugly has bars open something different and unique,” says and new bars opening all over the in seven countries to date, and the Livingston. After the rigorous Coyote world! Owner and founder Liliana Global team was able to learn a little Ugly training and opening program, the Lovell and Justin Livingston, VP about what went into each of the last bar is now a stand-out in the Kyrgyz of Global Development had time to three openings. culture and is having lots of success! catch up in Cardiff, Wales, during their third opening in three months BISHKEK, KYRGYZSTAN TOKYO, JAPAN overseas, and first in the UK. “It’s A developing county, Kyrgyzstan Coyote Ugly had an amazing time thrilling to be at these international gained its independence after the opening their first bar in the land of the bar openings,” says Lovell. “It’s break-up of the Soviet Union in 1991 rising sun. Opening in the Roppongi amazing to see how far we’ve come and Coyote Ugly was only the 7th area of Tokyo which is known for its from a small (but awesome), single U.S. brand to enter the market. “We food and entertainment, Coyote Ugly bar in New York City.” The famous found a great franchisee in Bishkek appeals to a culture that is no stranger bar is expanding to all parts of the globe, with its most recent openings in Bishkek-Kyrgyzstan, Tokyo- Japan, and Cardiff. Momentum has continued to build in recent months and there is no signs of the rapid growth slowing down.
YOUR INVESTMENT
A brand so famous, they made a movie about it! The most famous bar on the planet is now the hottest franchise in the world! Key markets still available but won’t last! A support and training program developed by a legend in the bar industry after 20+ years of operations.
52 GLOBAL FRANCHISE to American concepts. “There Singapore, Hong Kong, Malaysia, are available. Coyote Ugly is looking LED BY OWNER, were a few things about Japanese Germany, Canada, Mexico and to expand the brand with franchisees FOUNDER, AND culture we had to adjust to, mainly more. “With major cities like who embrace the culture of Coyote ORIGINAL COYOTE around staff communication and London, Sydney, Shanghai, Ugly Saloon and share their vision of LILIANA LOVELL, roles,” owner, Liliana Lovell says, Bangkok, Montreal, Cancun, Rio, offering the Coyote Experience to the COYOTE UGLY IS “but the girls learned the dances and many more, there are amazing market. Owners will benefit from the A WELL-OILED faster than any other bar we’ve ever opportunities for Coyote Ugly all history of a world-wide legend in the MACHINE WITH ONE trained! They have a talented staff of around the world,” Livingston says. industry and tested business model. OF THE STRONGEST dancers, singers, drummers and DJs The concept is seeking amazing Think you may have what it takes SUPPORT AND and of course, they are all amazing partners to add to the franchise to own the Most Famous Bar on the TRAINING SYSTEMS bartenders with huge personalities! family who have the experience and Planet? Do you want access to the IN FRANCHISING” The Japan bar was a great showing desire to enter or expand into the bar/ knowledge, systems, and leadership of some serious girl power behind nightclub industry at the top with a of the world leader in the bar/ the bar.” powerhouse brand like Coyote Ugly. nightclub industry? Do you want to The Saloons thrive in major cities be a part of the upcoming aggressive CARDIFF, WALES with high tourism and high numbers expansion of the Coyote Ugly Saloon The most recent opening of 2016 was of local patrons. brand? If you’d like to talk about the in historic Cardiff, Wales. The first Led by owner, founder, and original details and see if we are a good match Coyote Ugly in the UK, the bar is in Coyote Liliana Lovell, Coyote Ugly for each other, you should visit the The Square, an historic building in is a well-oiled machine with one of website at www.coyoteuglyfranchise. the heart of the city that originally the strongest support and training com and request information to functioned as the Philharmonic systems in franchising. This unique Justin Livingston, Vice President Theater. With a major renovation, concept is able to provide systems of Global Development at justin@ the bar was transformed and the and methods for running the coyoteuglyfranchise.com. Coyote Ugly parties began with a world-famous brand but also the ticketed Grand Opening event where flexibility to adapt to local cultures all proceeds were donated to support and traditions. The robust training AT A GLANCE: breast cancer research. “Coyote Ugly and operations system includes full was very well received and the epic training of owners, managers, and Name of Franchise: Coyote Ugly Saloon venue has continued to fill every staff, assistance with site selection Established: 1993 night since opening, with locals and and procurement, store design, Number of franchised outlets: 15 Franchised, tourists alike coming to experience brand and marketing guidance, and 10 Corporate Owned the Coyote Culture! It’s a great entry unrivaled ongoing support. Location of units: United States, Germany, Wales, to the UK market!” Livingston says. The total investment in a Coyote Russia, Ukraine, Kyrgyzstan This recent surge in the brand’s Ugly Saloon franchise is between Investment range: $500,000USD to $1,900,000USD expansion is just the beginning, $500,000USD and $1,500,000USD Minimum required capital: $250,000USD as Coyote Ugly is in development dependent on location/market, size, Web: www.coyoteuglysaloon.com conversations with potential and condition of the unit. Single and Contact: Justin Livingston, franchisees in China, Thailand, multi-unit franchise partnerships [email protected] Tel: 720.442.7777
GLOBAL FRANCHISE 53 SHOWS AND EVENTS
MEXICO CITY: WORLD’S BUSIEST FRANCHISE EXPO This upcoming Mexico show is the essential event for anyone aiming to expand into Latin America
ne year not so long ago he quickly added, “Because I already “It’s probably the highest-attended during Franquicias sold a master license!” franchise expo in the world – more Feria Internacional, the The two men shared a laugh and than 44,000 visitors last year – and International Franchise at the end of the day Portesy saw the visitors are often experienced OExpo in Mexico City, an exhibitor him standing outside the hotel. franchise owners. Many of them stopped Tom Portesy, president of “Remember I told you I sold a master are not coming to their first rodeo. MFV Expositions, the show producer, license?” he said to Portesy. “I’m They know what franchising is and said, “I’m done.” The expo was waiting for the guy to pick me up. all about. They believe in it. And only underway for two hours, so He wants me to tour his stores they’re looking for their next Portesy was stunned. around Mexico City and then we’re opportunity.” That next opportunity “I didn’t know what he meant when going to his house for dinner.” might be found March 9-11, 2017, he said, I’m done,” recalls Portesy, Turned out this buyer already owned at Franquicias Feria Internacional, whose company has organized the a master license for a U.S. retail World Trade Center, Mexico City. Mexico City expo for more than 25 chain and he was looking for one Details, including how to register, years. “He looked like he was about more. The next morning Portesy are at www.fif.com.mx. to pack up and leave the show, but we visited the exhibitor at his booth were just getting started.” Portesy because he wanted to know what A BRIDGE TO LATIN AMERICA asked him what was wrong, and the happened. “Done deal,” said the The evolution of Franquicias fellow said, “I’ve been doing these exhibitor with a huge smile. Feria Internacional is unlike any shows a long time and I know a good “That story isn’t unusual when other franchise expo in the world. show when I see one, and I’m ready to we’re talking about the Mexico City It began as a bridge between the leave this one right now.” Fortunately, franchise expo,” Portesy explains. USA and Latin America. “In the early years,” says Portesy, “the Mexico City expo was specifically for U.S. brands. We thought if we could take U.S. franchises into Mexico, the Americans would sell master franchises and those master franchisees would continue to exhibit every year and the expo would draw buyers from Latin America.”
U.S. EXHIBITORS INCLUDE Cantina Laredo, Cool River Café, Coyote Ugly Saloon, Crunch Fitness, Firehouse Subs, Great American Cookies, Hot Dog on a Stick, Marble Slab Creamery, The Melting Pot, Rockin’ Jump, Signarama, Subway
54 global FRANCHISE While all of that happened, Aguilar says, “The attorneys and exhibitors familiar with the expo something else happened, too, which consultants have done a tremendous say it’s non-stop talking to qualified dramatically increased the size and job of helping local business people investors with the knowledge and significance of the expo. “The country become franchise owners and VISITORS COME financial resources needed to roll of Mexico loves franchising,” says operators. They teach them the legal BACK TIME AND out a franchise brand. “It’s one of Jude Aguilar, MFV’s director general necessities, but they also provide AGAIN BECAUSE my favorite expos,” says Portesy, in Mexico City. “Mexicans have not business guidance. They go out of THERE ARE SO “because it’s so big and so busy, and only done a good job of developing their way to provide their expertise, MANY NEW everyone comes away satisfied. The American concepts, and concepts from and as a result we have a very fertile CONCEPTS” exhibitors practically lose their voices other countries, but they’ve created franchise environment. We learned after talking to so many people, and their own franchise concepts, too.” a lot from those early exhibitors the visitors come back time and Today, in fact, the indigenous that came from the U.S., but now the again because there are so many Mexican franchises vastly out-number Mexican franchisors and franchisees new concepts.” the American franchises exhibiting at are teaching everyone else how to the expo. “Visitors come to our expo succeed in Mexico. And that’s the way from many countries to discover an it ought to be.” opportunity that they want to develop, and in many cases that opportunity THE WORLD ARRIVES will be a local Mexican franchise,” IN MEXICO explains Aguilar. Today, exhibitors come from many countries to be discovered at INFRASTRUCTURE FOR Franquicias Feria Internacional. FRANCHISING Scan the exhibitor list at www.fif. As a country, Mexico has done a com.mx and the countries include masterful job of creating a supportive India, Italy, Spain, Australia, Canada, environment for franchising. “The Hong Kong, Austria, Britain, Qatar, Mexican Franchise Association and more. American franchises deserves all the credit,” says are in abundance, too. In fact, the Aguilar. “Early on, the founders of American franchises exhibit under the association, and members of a U.S. pavilion in conjunction with the government, recognized the the U.S. Department of Commerce. importance of teaching people “In Mexico,” explains Portesy, “the about franchising, and then Commerce Department arranges providing programs to encourage one-on-one appointments for the the development of franchises. American exhibitors. This is a huge FURTHER INFORMATION Franchising became a means advantage for both the exhibitor and to an end in Mexico.” While the the visitor. Many of the visitors are WHAT: Feria Internacional de Franquicias (FIF) association provided education and existing master franchisees. They WHERE: World Trade Center Ciudad de México infrastructure, it also depended on know how franchising works and WHEN: 9, 10, & 11 March 2017 WEBSITE: www.fif.com.mx franchise attorneys, who were also in they love it. Now they’re looking for CONTACT: Richard Brunsman, MFV Expositions many cases franchise consultants, to a second or third brand.” +1 201.881.1606, mobile: +1 407.310.4168 show local business owners how to Franquicias Feria Internacional [email protected] structure a franchise. occurs only once annually, but
global franchise 55 ADVICE
BORDERLINE SUCCESS
International expansion can cause a world of misunderstandings, as Lesley Hawks discovered when Skyzone took on the world
stablishing a franchised incessant questions. Finally, one Our partners devised a very smart, business across member of the group sensed our practical solution – installing a international territories frustration and spoke up, explaining massive, automated drape system that TAKING A presents a variety of that their business culture pretty could section off a portion of the park Eunpredictable challenges. Franchising much requires them to question at designated times so female guests FRANCHISED BUSINESS ACROSS is a successful business model everything and they were enjoying can enjoy the experience without INTERNATIONAL because it enables partners to take the experience! being seen by men, and scheduling an BORDERS REQUIRES a proven, profitable system and Cultural anecdotes aside, taking all-female team of employees during A DEDICATED, replicate it in multiple locations, but a franchised business across those times to assist and support those CREATIVE AND new challenges present themselves international borders requires a guests. They’ve also designed family HIGHLY CAPABLE when implementing a business model dedicated, creative and highly capable time and separate hours for men TEAM TO OVERCOME in countries with unfamiliar laws and team to overcome a wide array of to jump, ensuring everyone has an A WIDE ARRAY OF cultures. These challenges take many challenges. When establishing our opportunity to enjoy the trampolines CHALLENGES” forms, from potentially embarrassing, first locations in Central America, under local laws and customs. but often amusing quirks in business our team had to re-imagine what When we expanded the brand etiquette to major obstacles in an ideal location could be. We were into the European market, we were implementing the franchised business accustomed to massive industrial again confronted with an unexpected model across borders. spaces in our home territory, but we challenge – a registration issue As Sky Zone has grown from its had to adapt to smaller footprints prevented us from using the Sky home territory in the United States to for our parks due to the availability Zone name! Our team went to work, locations spanning four – soon to be of real estate in our target markets. re-imagining our concept to develop six – continents, we’ve had our share This, coupled with the cost of a new brand, which we could tailor of learning experiences and amusing importing materials from the U.S., to align our attitude, visuals, and gaffes. While hosting potential drove us to reexamine how we can activities to suit the tastes of the partners from new territories for build the parks at a competitive European market place. The team meetings at our headquarters, we rate while maintaining the look and had to create a new identity that frequently display their national flags feel of Sky Zone’s brand. It required captures the feeling of freedom our in our lobby. Recently, we hosted a us to reconsider how we source a parks instill in consumers as they visiting developer and proudly hung variety of materials, from the special soar through the air and design a new a sizable replica of his country’s flag. socks customers wear to jump on logo that extends that emphasis on Noticing some awkward glances the trampolines to the materials we freedom. The result is our new sister between him and his associates, I use to construct our parks. We had brand, Freedome, which launched finally discovered the flag was upside to identify local suppliers for some in the UK in October 2016. Through down and they were too polite to tell materials and find more efficient ways careful consideration and creative us. The lesson, of course, was classic: to import other materials to the region effort, the Freedome team was able to pay attention to the details! through a US-bonded warehouse, overcome the registration issue and Beyond silly gaffes, meeting with which reduced costs. produce a unique experience for the diverse groups of international market place that maintains the core business people frequently provides BIGGEST ISSUE concept which has made Sky Zone a opportunities to learn many We faced an entirely different set of success in other territories. Freedome potentially awkward lessons. We cultural challenges when we entered also incorporates everything Sky Zone thought a teleconference with one the Middle East. The biggest issue has learned through its first decade of our foreign partners was going we encountered there was allowing as a franchised business, including poorly, as the exhausting conversation women to jump on the trampolines features such as the new, interlaced stretched through several hours of with a high level of privacy. trampoline system that eliminates
56 GLOBAL FRANCHISE the need for padding between admissions process by electronically franchised business, an experienced trampolines. We also added sprung verifying the customer has reviewed team can apply imagination and walls for acrobatics and parkour and the safety information and completed creative solutions to make the concept incorporated exciting new features a waiver. This technology also even stronger. By knowing the core beyond trampolines, such as climbing will allow customers to easily find elements that make your business walls, a Ninja Warrior-style obstacle themselves in pictures taken by our successful and working closely with course and a zip line area. Freedome’s park-wide photo system, which will be international partners to identify parks will include the latest in available for purchase. logistical, legal and cultural obstacles, wearable technology in the form of While international expansion a franchised concept can grow to smart wristbands that streamline the presents a variety of challenges for a become a truly international brand.
ABOUT THE AUTHOR Lesley Hawks is VP of International Development at Skyzone. Email: lesley.hawks @skyzone.com Web: www.skyzone.com or call +1 (562)760-1611
GLOBAL FRANCHISE 57 BRAND PROFILE
[ HOOTERS ] MAKING PEOPLE HAPPY SINCE 1983 One of America’s best-known family, HOOTERS continues to expand globally. Here’s the latest and greatest happening…
ooters has evolved the look of our restaurants, which will viewing, and of course to enjoy the over the years and is also become part of the success DNA world class hospitality from our aggressively growing for Hooters. Hooters Girls. worldwide, so we HOOTERS HAS FOOD Hdecided to catch up with Mark WHO ARE YOUR CUSTOMERS? WHAT IS THEIR AVERAGE SPEND? THAT PEOPLE CRAVE Whittle, Chief Development Officer We have a very diverse customer base Hooters has food that people crave and AND DRINKS THEY for Hooters, to get the latest and that includes young and old, male drinks they love, at prices that won’t LOVE, AT PRICES greatest about the iconic brand. and female, children and families. break the bank. Our average check is THAT WON’T BREAK Of course, over the years, scores of just under $17 USD per person. THE BANK. OUR WHAT’S THE RECIPE WHICH HAS celebrities have made the trek into AVERAGE CHECK IS MADE HOOTERS AMERICA’S many Hooters restaurants around HOW BIG IS HOOTERS RIGHT NOW? JUST UNDER $17 BEST-KNOWN RESTAURANT? the world. Our customers choose Currently, we have a total of 434 USD PER PERSON” The combination of great food, to frequent Hooters because of our restaurants around the globe. There an inviting atmosphere, and our fun and exciting atmosphere, our are 197 corporate locations in the world-famous Hooters Girls is the high quality and diverse menu, the United States, as well as 151 domestic secret recipe for Hooters success. vast selection of cocktails and other franchise locations. In addition We continually evolve, whether it’s drinks, the impactful AV systems Hooters has 86 restaurants outside adding new menu items or updating in our new restaurants for sports of the United States in Europe, South
58 GLOBAL FRANCHISE Africa, Russia, Central and Latin America, Australia, and Asia.
WHY IS THIS AN EXCITING TIME FOR HOOTERS? With over 110 commitments for future franchise development around the world, Hooters is poised to rapidly accelerate its growth. In fact, Hooters has more than doubled the space of its corporate new restaurant openings in the US and expects to open over tomorrow, the first twenty (20) franchise locations question I’d ask him is around the world in 2017. We are WHICH AREAS DO YOU WANT TO ‘Who is going to operate building new restaurants in existing EXPAND TO IN THE FUTURE? the restaurant?’ and if markets, but are also opening up Hooters will continue to expand in its he couldn’t give me an Hooters in brand new countries as current markets, but is also excited answer, I’d ask him to get well, such as Lithuania, Cambodia, to grow new markets as well with the an operations partner Bolivia, Indonesia, and Spain in 2017. right franchise partners. Key markets secured, then we could for new franchisee recruitment talk about Hooters. HOW DID IT ALL BEGIN? include Europe, the United Kingdom, In 1983 on April Fool’s Day, six South Africa, Australia, China, New WHAT IS AN IDEAL businessmen, known as the “Hooters Zealand, Korea, Brazil, Chile, Peru, SITE FOR A RESTAURANT? Six,” created the concept of Hooters in Puerto Rico, and the Caribbean. In terms of markets, Hooters is Clearwater, Florida. After finding the predominantly looking at places with perfect Hooters Girl, Lynne Austin, WHAT MAKES HOOTERS A populations of at least 100,000 or 125,000 at a Jose Cuervo bikini contest and a GREAT OPPORTUNITY FOR with an upper-middle income base, a sketch of the logo completed by one of FRANCHISEES? high preponderance of daytime activity the wives of the Hooters Six, the concept There are multiple factors that make and a strong residential base surrounding began to take shape. Expectations were Hooters a great franchise opportunity, the site. In addition, Hooters prefers so modest at the time that the simple including our world-renowned brand sites that are within close proximity to fact the doors opened was deemed recognition, uniquely differentiated regional shopping, cinemas and/or sports worthy of a toast. Since then millions guest experience, high quality and arenas to help drive evening and late have been liberated from the ordinary diverse menu with full bar, world night traffic. Some of the most successful at this “neighborhood restaurant” famous Hooters Girls hospitality, Hooters restaurants are located in the concept. Hooters stresses great food and and compelling unit level economics. hearts of large downtown areas. beverages, a relaxed atmosphere with One of the great things about selling guest-obsessed service, distinctive curb this concept is that you never have to WHAT CAN YOU OFFER appeal, and, of course, the world-famous overcome a brand-awareness hurdle. IN FRANCHISE SUPPORT Hooters Girls. These elements combine Whether here in the U.S. or abroad, AT HOOTERS? to make Hooters the place for all types everyone knows Hooters and most Hooters is proud of its commitment of people: celebrities, sports figures, and people have a genuine fondness for to franchisee support, and this anyone who enjoys food and FUN! the brand. support covers all aspects of the business from initial site selection, WHEN DID YOU START WHAT DO YOU LOOK FOR IN A design and construction assistance, FRANCHISING? MULTI-UNIT FRANCHISEE? operational training, long term business Although Hooters first opened in 1983 There are a few key traits that Hooters development support, and marketing the first franchise opened later, in 1986. looks for in a potential franchisee and menu guidance and support! candidate, including strong financial HOW MANY FRANCHISED capitalization, five or more years of OUTLETS DO YOU HAVE AND restaurant experience, and knowledge WHERE ARE THEY? of the market to be developed. We want AT A GLANCE: Hooters currently has 237 franchise our associates and our franchisees to Name of Franchise: Hooters of America locations, including 151 in the United be passionate about the business and Established: 1983 States and 86 in other countries. the concept, and to have a desire to be Number of franchised outlets: 237 Currently operating in 28 countries, with people. This is a people business Location of units: Worldwide Hooters has locations in many key and we happen to sell food. Introverts Investment Range: 1.5M - 3M USD markets around the globe, including don’t seem to be successful, or, if you’re Minimum required capital: 1.5M USD restaurants throughout Europe, South an introvert by nature, you need to have Web: www.hooters.com/franchising Africa, Russia, Australia, China, and the outgoing sort of people working Contact: [email protected] or (770) 799-2258 North, Central, and South America. with you. If Warren Buffett called me
GLOBAL FRANCHISE 59 ADVICE
HOW TO INTEGRATE YOUR P.R. STRATEGY
Jamie Izaks offers three ways to use an integrated PR mix to further franchise development
or ambitious franchisors content on all channels. Consumers REINFORCE THE PITCH THROUGH seeking to initiate cost- today are flooded with information SOCIAL MEDIA effective franchise lead at every turn in the road, so make Once your candidate is hooked, CLEAR AND generation campaigns, an sure that all outreach efforts lead to has made an initial inquiry and has CONSISTENT Fintegrated public relations strategy standing out from the crowd, both in begun the due diligence process, it’s MESSAGING IS should be considered as the core of message and creativity. almost certain that they’re looking CRITICAL – YOUR creative content across several earned Let’s take a look at each of these through your social media channels TARGET AUDIENCE and owned media channels. PR channels and discuss how they to see what’s out there. Consider your SHOULD BE ABLE TO Integrating the three chief can be best utilized together for the social media assets an opportunity EASILY UNDERSTAND components of the public relations best franchise lead generation results. to present your franchise’s vibe, YOUR CONTENT ON mix – media relations, content culture and marketing approach – ALL CHANNELS” marketing and social media – will HIGHLIGHT YOUR BRAND’S not to mention the loyal following augment your brand’s intended goals: PERSONALITY it commands. Be attentive, creative getting your message in front of One of the best ways to draw in and take the opportunity to tell your your ideal franchisee prospect and franchise leads is to communicate franchising story. Your prospect solidifying a call to action that will your brand differentiators – that is may fall off the tracks if your brand increase the likelihood of you to say, showcasing what separates misrepresents itself with a sub-par making a sale. your brand from the competition. social media strategy. Clear and consistent messaging is Information is at your leads’ For ideas on how to convey your critical – your target audience should fingertips, and it’s your job to use brand’s vibe to franchise leads, be able to easily understand your every possible tool in your possession think about what causes you to to reach the right people with the stop scrolling on Facebook, Twitter right message – that’s where publicity or LinkedIn to take a second 6 WAYS TO ENHANCE comes in. look – generally, there’s a visual or BRAND RECOGNITION Think about what makes your multimedia element that catches brand unique – maybe you do a lot your eye. Now put yourself in the Here are six foolproof ways to community outreach, you have shoes of your target and ask yourself help your brand stand out from an outstanding giveback program what they want to see – try posting the crowd. or your product is adored by a photos of your franchisees engaged Tap into the emotional specific demographic because of with their communities, or of your components of your your customer service. All media home office doing fun things together. founding story placements – whether it’s local, Generally, people respond positively Encourage franchisees to join regional or national print or online to photos of people versus pure local business leadership groups press, television or radio segments graphics, so bear that in mind when Contribute to different media – should work toward the goal of planning the visual elements of your as an industry expert explaining your brand differentiators social media campaigns. Tell the story of your most to your ideal customer. successful franchisees to A particularly effective angle to CONTINUE THE DIALOGUE inspire others take when using secured publicity to Now that you’ve reeled in your lead with Franchisee testimonials generate franchise leads is leveraging targeted earned media and kept their demonstrate belief in the the personal stories of your existing interest with engaging social media, context set of star franchisees. Your leads the quality of your brand messaging Integrate messaging across will visualize themselves in the shoes becomes increasingly vital. ‘Content multiple cost-effective channels of the franchisee, attaining success marketing’ is a loaded phrase and it can through your franchise system. come in many shapes and sizes.
60 GLOBAL FRANCHISE In conjunction with media relations with the press and social media efforts An integrated PR strategy has and social media efforts for our is critical. Add elements such as photos, the power to shift your franchise franchise clients, we utilize ongoing slideshows and videos from your PR development into high gear. Get consumer blogging and storytelling campaign into your content marketing to your growth goals with a public drip email campaigns to further the for consistency. relations approach that includes brand’s reach. These content marketing The avenues for franchise brands media relations, social media and channels are a fantastic way to take in aggressive growth mode to take content marketing all functioning advantage of today’s cost-effective with content marketing can be in concert together. It will help you multimedia opportunities to drive overwhelming, but here are a few develop your lead flow and complete brand awareness and SEO. Top-notch to consider: the conversions your franchise writing skills, graphic design know- concept commands. E-newsletters with compelling how, video editing expertise and branded graphic appeal that all-around creativity come together merchandise recently-secured press to craft messages that create repeat coverage and franchising blog entries business and brand equity. While the idea of blasting out brand Video testimonials from your messaging to people on an email list franchisee stars is not new, there are ways we’ve found An online news center complete that are more effective than others with current blog entries and recent in engaging the audience. Based on press items (also a fantastic tool for studies that show how people read amplifying SEO efforts) and digest information, we keep the content short (between 200-300 A seminar or webinar series with words), utilize dynamic imagery and sign-up landing pages rich with break up text with subheads. We have compelling imagery, links to brand ABOUT THE AUTHOR information and testimonials also found that people respond well to Jamie Izaks is the president statistics, and we link to news articles, At this stage, you have permission to and co-founder of All Points research studies or other quantitative market to your leads. This is the time Public Relations, a U.S.based information to corroborate our points. to remain focused on your cadence of public relations agency focusing Additionally, timing blog posts and communication and to have a collection on the franchising industry. e-mails (with subjects consistent with of content to re-affirm their decision to http://allpointspr.com/ what you’re posting on social media) move forward with your franchise.
GLOBAL FRANCHISE 61 ADVICE
THE GLOCAL MESSAGE
Franchising internationally makes understanding the local market crucial, says Nathen Mazri.
APPLICANTS SUBMIT THEIR APPLICATION WITHOUT HAVING A CLEAR STRATEGY FOR THE BRAND”
Glocal” may be a great new classic glass bottle reinforces ideas. Often, it is wittiness at its peak. example of a fancy marketing the heritage of the Coke branding. Its aim is to find a single message, word, but it’s one which Coke’s universal message succeeded which will achieve brilliant brand may not be universally on all ‘glocal’ levels because its brand communication in the Glocal market. “understood. In fact, all it means authenticity was powered by a little In their book, The 22 Immutable is a global brand penetrating local creative-efficiency and heritage. Laws of Branding, authors Laura markets with different attitudes Nothing spoke more of Coke’s drive Ries and Al Ries claim that to be and behaviors. How can a global for brand authenticity than the slogan successful on a global scale, brands brand or franchise succeed in local it used throughout the 1970’s, “It’s the must respect the following laws: markets? The answer is simple: Real Thing.” Law of credentials - brand brand authenticity. When Coke Creative efficiency is a science leadership. The brand must be the best realized it was losing grounds against which even has its own formula: in its category, and the most authentic its nemesis, Pepsi, Coke decided to creative communication = (solution revamp, restructure, and reformulate x cost x time) + single message. Law of category - a brand must be the new product with a “new classic” To put this simply, creativity is a the first in its own category, as Heinz is positioning strategy. This created problem-solving solution which is first in tomato ketchup authenticity for the brand. Today’s employed to produce cost-effective
62 global FRANCHISE Law of quality - brand quality is in a local dish made with French fries In today’s cluttered, mobilized the perception of the buyer. High price and cheese curds topped with a light economy where we are exposed to is a contributing factor brown gravy. Franchisee-owners more than 3,000 messages a day, must consider how to adapt their one of the most effective strategies Law of consistency - a brand cultural behavior towards a product to use is direct digital marketing. is measured in decades, not years. category, whether that category To exploit this to its maximum Markets change, but brands shouldn’t is tomato ketchup, video rental potential, the master franchisee Law of singularity - a brand must or cupcakes and understand the must know where customers are create a single idea in the mind of customer perception towards online and on mobile and create the customer every category. maximum exposure using those In Saudi Arabia, major franchisee platforms. Mr.Sub, a Canadian QSR Now that we have an understanding outlets such as Starbucks, which has been selling premium how a brand can succeed in any McDonalds, Dairy Queen and other subs in Toronto since 1968, sub- market, we can apply the same international chains are segregated franchised its master franchise for philosophy and branding strategy to between men and women. A product Middle East territory to Veyron franchises – which are distribution that may work well in one market Investment, which opened outlets in licenses of intellectual property may not work as well among Dubai Healthcare City, International on a global scale. Franchisors’ demographics that differ in matters City, and will have opened up to five main concerns are to offer brand such as gender, age, race, income more outlets by the end of 2016. governance and brand viability in level, and nationality. Advertising Sam El-Masri, President of Veyron local markets for maximum profits. must pay attention to cultural Investment realized that 25% of It often happens that when applying differences, too: for instance, a the total revenue is generated from for a master franchise of a particular billboard ad on Tahleyah St. in online food delivery websites such territory, applicants submit their Riyadh may not show an image of a as talabat.com and 24h.ae. application form and business plan female if she is not fully covered. To Therefore, Mr Sub created a digital as well as supporting documents be sold in Saudi Arabia, female skin marketing strategy to maximize its without having a clear communication or body parts must be edited and exposure on these major platforms objective/ strategy for the franchisee coloured in black. The marketing P’s via email marketing, homepage brand. What may work in USA may (place, promotion and people) are banners, skyscraper banners and not work in Saudi Arabia, and the most crucial aspects affecting a other advertising opportunities, vice versa! brand in any region. increasing brand awareness by more Franchisee owners must think than 50% among the website users, CULTURAL BEHAVIOR as brand owners. They must not on monthly basis. Cultural marketing is crucial in order act as local operators but as brand to reinforce the brand values in a thinkers. It’s a great responsibility traditional way that resonates well to own a particular international ABOUT THE AUTHOR with the local market. McDonalds franchise in your own country, Nathen Mazri is marketing is exceedingly creative in launching but it is of course crucial that the and brand director for cultural product innovations, such as standards set by the franchise Veyron Investment. For McArabia with pita bread in Middle system are maintained and that more information, visit East. In Quebec, Canada, you can the brand is also grown on a www.veyroninvest.com replace your fries with poutine, glocal level.
global franchise 63 ADVICE
FRANCHISING IN AUSTRALIA MADE EASY
A clear explanation of franchising down under, by Damian Paull of the Franchise Council of Australia
More than 470,000 people are employed directly in franchising IN COMPARISON TO THE US, THERE Sales turnover of the ARE SOME LAWS entire franchising sector was THAT MAKE estimated at $146 billion FRANCHISING 90% of franchise brands MUCH MORE originated in Australia EFFICIENT IN AUSTRALIA” The great majority of franchise systems operating in Australia are home grown, and increasing numbers of Australian franchise systems are successfully taking their systems overseas, with New ranchising in Australia is ‘business format’ mode has developed Zealand being the most popular amongst the most well- into a highly significant and dynamic choice due to similar consumer established, mature and business activity which has expanded patterns, and proximity. Secondary progressive businesses to include virtually every product and choices including the United States Fsectors in the economy. It is a service business. As in North America, of America, United Kingdom, Europe recognised and reputable way of doing the tremendous growth and popularity and Malaysia are also very favourable business, with a steady year-on-year of business format franchising has locations due to the sheer potential growth reported by the Asia-Pacific transformed franchising from a for growth and population, however, Centre for Franchising Excellence. specialised marketing technique into a due to China/Hong Kong’s ever- Franchise systems are present highly competitive, innovative vehicle increasing economic slowdown, there in most industry sectors, and the for expansion of retail product and is no surprise that the decline in the economic impact of franchising is service industries. number of franchises migrating to substantial and growing. Franchising that region continues. has revolutionised retailing in Australia, GROWTH OF FRANCHISING IN and provided small business owners AUSTRALIA with the competitive resources to Statistical surveys compiled by the compete against the large corporations Asia-Pacific Centre for Franchising TOP SECTORS TO that dominate Australian retailing. Excellence have been sponsored by BUY INTO: Franchising in Australia the Franchise Council of Australia commenced in a significant way in the every second year since 1998. Retail early 1970’s under the influence of the This survey reveals: franchised US fast food systems such Food service (includes fast as KFC, Pizza Hut and McDonald’s There are approximately 1,120 food, coffee etc) which commenced operations here at business format franchisors in Support services (Cleaning, the time. The growth of franchising Australia in 2016 gardening, etc) since that time has been remarkable. There are an estimated 79,000 Over the last two decades franchising units operating in business Health and fitness in Australia in its contemporary format franchises
64 GLOBAL FRANCHISE WHAT KIND OF FRANCHISING? SAME SAME… The retail industry in Australia continues to dominate and perform Both countries extremely well in a franchising require that business model. The number of brands some sort of have seen a decline, however the audited financial number of franchise systems have statements be grown internally, which continues a included in trend that began in 2010 reflecting the disclosure a maturing sector. document. Here’s a quick break down of Both countries use disclosure in effect, the franchisor must continue the segments: as the major means to regulate to make disclosures to franchisees. franchise sales. 26% Retail trade: made up of Resolve your issues: In Australia, 283 brands BUT DIFFERENT… it is mandatory to use mediation in disputes. In the US, there is no such 18% Accommodation and food Many established franchise brands requirement – although mediation services (office services, domestic, in Australia use someone called has become more popular of late industrial and commercial cleaning, an Area Manager or Site Selection to resolve disputes for minimum gardening etc) made up of 166 brands Manager or other middle person damage for both parties. 10% Other services (personal to sell franchises or to perform The ACCC has an active program services, pet grooming, auto service/ certain of the obligations of the of enforcement. In the US, the Federal repairs, IT services etc), which franchisor. In the US, this structure Trade Commission’s enforcement includes 109 brands. is becoming more popular, however, actions are rare. At the state level, the registration requirement makes enforcement actions are more FRANCHISE LAW– THE GOOD, use of this three-level structure in the common, but generally infrequent THE BAD, THE UGLY US very expensive because the sale as well. In comparison to the US, there are of area rights is considered the sale of some laws that make franchising a franchise, which means that there In the US there is no private right much more efficient in Australia. will be two registrations (one for the of action for a violation of the FTC’s For example, there is no registration area rights, and one for the sale of the disclosure requirements. That is, of franchise sales in Australia. The franchise itself). only the Federal Trade Commission franchising regulations in Australia can bring an action if there is a In the US, once a franchise sale are heavily influenced by federal law, violation of its disclosure rule. is closed, there is no obligation on whereas franchising is looked over by In contrast, a violation of Australia’s the franchisor to continue to make both state and federal law in the United Code of Conduct could result in disclosures to the franchisee. By States. The ease in which this works an action by the ACCC or by contrast, in Australia, as long as at applies to both the cost of buying a private individuals. franchise, and enforcing the law. least one franchise agreement is still
5 REASONS TO FRANCHISE IN AUSTRALIA 1. It’s a flourishing sector. According to the survey, Australia’s 2016 sales turnover for the entire franchising sector was estimated at $146 billion. 2. Access to finance. With tried-and-true successful Australian business operating systems, plus the added bonus of brand power, lenders can feel more confident supporting a franchise model with proven systems in place. 3. Expansion. Work with experts that provide you safe site selections and provide you with an extensive database of locations that would be successful to franchise in. 4. Regulations. The Australian Franchising Code of Conduct means that you can have respectful and safe dealings for both parties that enter into any franchise agreement.
GLOBAL FRANCHISE 65 BRAND PROFILE
[ TAXASSIST ACCOUNTANTS ] A WORLD OF OPPORTUNITY – MASTER FRANCHISE OPPORTUNITIES TaxAssist Accountants’ business model includes small business-friendly shop fronts and it’s a strategy that has added up to success. Enquiries from master franchisees wanting a share of that success are welcomed
o you have the desire Since 2009, we have been growing THE FRANCHISE MODEL to grow a substantial the brand internationally and we Our business model is a accounting network have exciting international franchise straightforward one: franchisees WE HAVE EXCITING through franchising? opportunities, which are primarily take on small business and personal INTERNATIONAL DTaxAssist Accountants is an award- available in Australia, Canada income tax paying clients with FRANCHISE winning franchise, which offers a and New Zealand. As part of our relatively uncomplicated work, OPPORTUNITIES first-class accountancy service to ambitious plans, we will soon be whilst being based in shop front AVAILABLE IN small businesses and self-employed offering opportunities in the US. premises. The shop fronts create AUSTRALIA, CANADA individuals in the UK, Republic of a customer-friendly experience, AND NEW ZEALAND” Ireland and Australia. Established DEVELOP YOUR stripping away the intimidation of in the UK in 1995, our global OWN NETWORK traditional accounting practices network has grown to more than Master Franchisees bring local and are specifically designed to 230 franchised areas servicing over tax and accounting experience appeal to the small business market. 70,000 clients, with a fee bank of and TaxAssist provides the award- Franchising provides you with more than £47 million. This has now winning brand, systems, training the benefits of proven training, put us 21st in the Accountancy Age and support to allow you to develop systems and support provided by Top 50 league of UK Accountants, a network of 50-60 accounting firms the franchisor. You will also enjoy the only accountancy franchise to within your territory, using our the benefits of being part of a well- be recognised in the league tables. proven model. established network of accountants who have a community spirit of WHO WE ARE LOOKING FOR sharing and supporting one another. WHY MASTER FRANCHISE WITH At TaxAssist Accountants, we only Terry Murphy, master franchisee TAXASSIST ACCOUNTANTS award master franchise rights to for two territories in Australia Largest franchise network of accountants in the individuals or organisations that said: “TaxAssist Accountants UK and Ireland meet our specific criteria: offers a distinctive brand and clear More than 20-year proven history We are looking for: approach to business development, as well as a great level of support Receive award-winning brand, systems, training Qualified accountant or part of an to both our franchisees and their and comprehensive support established accounting firm Earn from awarding TaxAssist Accountants clients. We see it as a win-win franchises across your territory Solid financial foundation situation for all concerned.” Dedicated and experienced International Entrepreneurial mindset For more information, call David support centre team Passion for the brand Paulson QFP, Senior Manager Strong brand name and recognition International Franchise Development Local business experience Comprehensive online operations manuals and on +44 1603 447402, or visit management information systems Strong leadership skills www.taxassist.net/international.
66 GLOBAL FRANCHISE SINGLE UNIT FRANCHISE OPPORTUNITIES Run your own accounting practice and build a profitable business and valuable asset for your future. With TaxAssist Accountants, you will have access to professional training and full support for you and your practice and access to a community of other accountants who have all walked the path into building an accounting you can focus on a group of WHAT OUR FRANCHISEES SAY practice in their area. clients, in a buoyant sector, who Liverpool-based franchisee, Avendra have traditionally been neglected. Narayan: “I could not be happier WHY TAXASSIST Our aim is to strengthen our with the way my business is growing. ACCOUNTANTS? network with franchisees who Following TaxAssist Accountants’ An exclusive franchise territory follow our business development shopfront business model has worked strategies in order to build a superbly as having a highly visible Proven shop concept sizeable accounting practice. business encourages walk-in clients. Fully integrated accounts and tax These strategies are based on The shop concept, combined with the software suite best practice and powerful high referral rate from clients who Ongoing training program and marketing techniques that can have been impressed by the level of development (technical, marketing, accelerate the growth of each service they have received, means software, administration) franchisee’s business. that my business continues to grow.” Operations manuals Chatswood-based franchisee, SUCCESSFUL FIRST YEAR Panbo Ye, said: “Since joining in Technical advice helpdesk and IN AUSTRALIA July 2016, my business has gone technical updates We celebrated our first successful from strength to strength. The National and local lead generation calendar year in Australia with a TaxAssist brand name, training and services, including 10 free leads special open day in Sydney. The event support have been excellent and was hosted by franchisee Colin Lua in Marketing, publicity and combined with my ambition and his Sydney shop – the newest addition brand building drive have proved to be a winning a to the network – and generated much combination. I am really enjoying Initial stationery and marketing interest among the local business every element of running my own materials including your own community, as well as those interested business combined with offering a personalised website in becoming part of this latest chapter first-class service to my clients.” A comprehensive support in the TaxAssist success story. Since Sydney-based franchisee, Colin website with practice management the launch of TaxAssist Accountants’ Lua, added: “Small businesses need and business development tools, Australian network in March 2016, a flexible, convenient all year-round templates and guides Terry and his team have recruited tax and accounting package, which three franchisees, including opening I’m delighted to be able to offer here By servicing the needs of small two shops and the conversion of in the Sydney CBD”. businesses, subcontractors and Terry’s existing four offices to For more information, the self-employed, as a franchisee TaxAssist Accountants. contact Terry Murphy, Director on 1800 625 429, or visit www.taxassistfranchise.com.au.
AT A GLANCE:
Name of Franchise: TaxAssist Accountants Established: 1995 Number of franchised outlets: 210 (UK), 22 (Republic of Ireland), 6 (Australia) Location of units: UK, Republic of Ireland and Australia Investment range: Master Franchise AUD$300,000 - $400,000, Single Unit Franchise AUD$77,000 Minimum required capital: Master Franchise $300,000, Single Unit Franchise $77,000 Web: www.taxassist.net/international Contact: [email protected]
GLOBAL FRANCHISE 67
Fishman_Layout 1 02/03/2015 15:18 Page 1 SAVE THE DATE
MARCH 8-10, 2017 New Park Resort, Park City, UT
Learn more at FranchiseUnconference.com / 215.825.3100 BRAND PROFILE
[ BURN BOOT CAMP ] THE FITNESS FRANCHISE SWEEPING THE NATION Burn Boot Camp offers safe, comfortable environments for mothers seeking health and fitness, a USP that’s proven highly successful
s the health and wellness $13 million for the upcoming year. sector continues to With the mission of providing a gain popularity, North comfortable environment where Carolina-based fitness women can work out and improve conceptA Burn Boot Camp is quickly their lifestyles, Burn Boot Camp becoming a prominent force in filling strays from typical boutique a large void in the fitness industry— concepts. Members are not required providing a comfortable place for to register for camps in advance different formats, e.g. HIIT training, mothers and women to exercise to reserve a spot, but rather enjoy suspension training, etc. Burn Boot and become healthy. Providing a fit flexibility in selecting camps that Camp has a very stringent recruiting community for moms and women, fit with their schedules. The fitness program for trainers, with every the boutique fitness concept creates concept also provides a convenient session led by a NCCA accredited an atmosphere where like-minded environment for women, ensuring certified personal trainer who creates women can come together, build a worry-free workout; all sessions new, innovative programs daily so confidence and inspire one another before 5 p.m. are only available to attendees never do the same workout through fitness. Well on its way to women, and childcare is available for twice. Straying from competition by becoming one of the fastest growing mothers free of charge while they’re teaching clients more than just how franchises nationwide, Burn Boot on-campus. to work out and eat healthy, Burn Camp surpassed the $1 million Each camp involves at 45-minute Boot Camp runs on the following threshold of system-wide revenue circuit-style workout comprised five pillar philosophy to help clients sales in September 2016 and projects of 72 different styles and 15 achieve success:
72 GLOBAL FRANCHISE Mindset – To change the body, you they loved to do – work in fitness. Offering a viable franchise much first change the mind and adopt Previously playing for the San opportunity to be part of the booming a proper mental state. Francisco Giants, Devan lived with $27 billion fitness industry, Burn host families, helping him quickly Boot Camp is seeking aspiring WITH 47 Nutrition – The decisions made in realize how oblivious many American entrepreneurs to augment the LOCATIONS the kitchen play an important role in families were to health and nutrition. company’s exponential growth. A low- CURRENTLY the results achieved. Following his tenure with the Giants cost investment in the fitness industry, OPERATING OR IN he sought out a career in sales, only franchisees can expect an investment Burst Training – The most VARIOUS STAGES to immediately realize this was not of approximately $120,000. Each effective way to burn body fat, burst OF DEVELOPMENT, the career path for him. He renewed facility has a retail center and online training involves interval training THE BRAND HAS his personal training certification store selling equipment, supplements, with body weight only. ALREADY AWARDED and within three months created a etc. to provide a recession-proof Strength Training – Building 214 FRANCHISES women’s boot camp program that business with multiple revenue lean muscle mass allows the body ACROSS 24 STATES eventually matured into Burn Boot streams. While potential franchisees to burn more calories at rest, shape AND ANTICIPATES Camp. With no clients the first are not required to hold a background the physique and ultimately keep 1,000 LOCATIONS two days, Devan set out to promote in fitness, ideal prospects have a strong unwanted fat off. BY 2021” his program and change his life – desire to own a business, as well as Positive Environment – generating 800 clients in just one being passionate and committed to A positive, encouraging and short year. the company’s mission to help women motivating environment is breeding transform globally. ground for success and confidence. EXISTING MARKETS After realizing the potential for growth, Additionally, Burn Boot Camp the concept began franchising in THE FITNESS FRANCHISE developed an original supplement February 2015. With 47 locations SWEEPING THE NATION line with the help of scientists and currently operating or in various stages nutritionists, After Burn, for clients of development, the brand has already Name of Franchise: Burn Boot Camp to ensure they’re maximizing their awarded 214 franchises across 24 Established: February 2015 workout and potential results. states and anticipates 1,000 locations Locations: 47 The brand was founded in 2012 by 2021. The brand’s development Awarded Locations: 189 by high school sweethearts and strategy focuses on partnering with Location of Units: United States husband and wife duo Devan and entrepreneurs to further develop Investment Range: Morgan Kline, who both hold existing markets and break into new 60,000 – 110,000 personal training certifications and territories across the country. Key Minimum Required Capital: 100,000 currently lead the brand as CEO and growth markets include Atlanta, Web: www.burnbootcamp.com CFO, respectively. Burn Boot Camp Miami, Tampa and Texas, in addition to Contact: was born after the realization that efforts to obtain a license to franchise [email protected] they could help people by doing what internationally in Mexico and Canada.
GLOBAL FRANCHISE 73 BRAND PROFILE
[ PAPA JOHN’S ] PAPA JOHN’S – #1 IN QUALITY A focus on high-quality ingredients combined with attentive service has brought Papa John’s the footfall which has enabled it to expand overseas with notable success
uality is our foundation “There’s a lot of opportunity left for and distinction – we’ve growth, even though we are a global always had better chain, said “Papa” John Schnatter, ingredients and always Founder, Chairman and CEO. “There Q will. Papa John’s, the are a lot of choice markets that need world’s third-largest pizza delivery potential Papa John’s franchisees. company, continues to set the bar high You know what the saying is....you can among quick-service restaurants and strike while the iron’s hot or you make pizza chains. the iron hot by striking it.” Our global story remains strong. As we work towards becoming Papa John’s is now in over 40 countries the largest pizza delivery company, and territories with a plan to add three there are plenty of opportunities to to five additional countries per year. grow with us internationally. We have The Papa John’s team is looking to a proven, simple and streamlined expand in Europe, North Africa and operating system; world-class South America. franchise support and business
74 GLOBAL FRANCHISE consulting; proven franchise model By comparison, a McDonald’s During the past year, Papa John’s with excellent profit potential; and requires an investment of approximately International has announced new stores high-quality, great-tasting products $1million, while Taco Bell requires a and new development deals in Colombia, PAPA JOHN’S IS THE customers love. minimum investment of $1.2 million. Egypt, Mexico, Russia, the Netherlands, FIRST NATIONAL Papa John’s also has some of the France, Tunisia, Spain and Israel. Papa PIZZA DELIVERY BETTER INGREDIENTS, BETTER industry’s leading incentives including John’s has approximately 1,000 new CHAIN TO ANNOUNCE CUSTOMER SERVICE a low franchise fee, reduced royalties stores in development globally that are THE REMOVAL OF ALL expected to open during the next six years. We continue to implement our gold during the first four years and food ARTIFICIAL FLAVORS With that in mind, Papa John’s standard ingredients worldwide to credits to name a few. Not to mention, AND SYNTHETIC International is targeting expansion make sure all our pizzas taste the Papa John’s ranks #4 in Entrepreneur COLORS FROM THE across Eastern and Western Europe in the same. This costs a little more but it’s Magazine’s Top 200 Global Franchises. ENTIRE FOOD MENU” worth it in the long run to help us live Papa John’s also provides initial following countries: Belgium, Germany, up to our BETTER INGREDIENTS. training for the operator for 6-8 weeks France, Poland, Czech Republic, Slovakia, Romania, Ukraine, Greece, Austria, BETTER PIZZA brand promise. and continues to provide ongoing Estonia, Hungary, Lithuania, Latvia, Papa John’s dedication to quality is training for the operator and team. Bulgaria, Denmark, Sweden. reinforced by its financial investment The brand offers a streamlined online Come see for yourself what makes of over $100 million dollars annually application process and clearly outlines Papa John’s different. Become part of our to provide superior product to its the requirements, incentives, potential Pizza Family - 120,000 team members customers. Papa John’s is the first US and international development worldwide that make Papa John’s national pizza delivery chain to locations and franchisee testimonials at BETTER INGREDIENTS. BETTER announce the removal of all artificial http://www.papajohns.com/franchise/. PIZZA promise come to life every day. flavors and synthetic colors from the So, if you have a passion for quality and entire food menu. This includes flavor GLOBAL EXPANSION you want to be on a winning team, Papa enhancer MSG, preservatives like On the global development front, Papa John’s may be right for you. BHA and BHT; cellulose and partially John’s International, Inc. continues to hydrogenated oils; artificial flavors and grow. Below are some key highlights of synthetic colors and the High Fructose our European and global growth efforts: ABOUT PAPA JOHN’S Corn Syrup. United Kingdom. Papa John’s has According to the 2016 American Headquartered in Louisville, Kentucky, Papa John’s nearly 350 restaurants operating in the International, Inc. (NASDAQ:PZZA) is the world’s Customer Satisfaction Index (ACSI), United Kingdom. Papa John’s ranked first among QSR- third-largest pizza delivery company. For 15 of the In January 2016 Papa John’s pizza brands in customer satisfaction Spain. past 17 years, consumers have rated Papa John’s announced the signing of a development and product quality, while also ranking No. 1 in customer satisfaction among all national agreement to open over 100 restaurants second overall among limited service pizza chains in the American Customer Satisfaction in Madrid and the surrounding area. Index (ACSI). Papa John’s is the Official Pizza restaurants. This year’s recognition The brand celebrated the opening of its Sponsor of the National Football League and Super marks the 15th time out of the previous first restaurant in Madrid, Spain in early Bowl LI. For more information about the company 17 years that the Louisville-based pizza May. This effort is led by Drake QSR who or to order pizza online, visit Papa John’s at chain led the pizza industry in overall owns over 45 successful Papa John’s www.papajohns.com. Also visit us on Facebook customer satisfaction. restaurants in Chile and decided to open a at www.facebook.com/PapaJohns, Twitter at twitter. new market in Madrid. com/PapaJohns, YouTube at youtube.com/user/ A BETTER FRANCHISE A consortium of papajohns, Instagram at instagram.com/papajohns, OPPORTUNITY The Netherlands. five Papa John’s franchisees in the U.K., and Pinterest atpinterest.com/papajohnspizza. Papa John’s has some of the industry’s led by Mr. Tony Kalsi, has the exclusive Looking to be a part of something Better? Learn lowest start up costs – you can open a development rights and opened the first more about franchising with Papa John’s at Papa John’s for less than $300,000. Papa John’s in the Netherlands during the papajohns.com/franchise summer of 2016.
GLOBAL FRANCHISE 75 SHOWS AND EVENTS
FRANCHISE EXPO PARIS 2017 One of Europe’s strongest franchising events, Franchise Expo Paris opens its doors 19th to 22nd March
f you wish to become your Come and discover the best ONE DAY, ONE THEME: own boss and you feel ready to opportunities for you and your establish your own business, business! Franchise Expo Paris Sunday 19th : New life, I become then the best place to start is the marketplace for your entrepreneur. Iplanning is Franchise Expo Paris future. More than 3,600 franchise How can franchise help me develop 2017, the international franchise candidates from 87 activity sectors my business? Testimonies, experts’ show. This 36 year-old show has will gather in Paris to explore advice and meetings. already opened up the doors of franchising’s possibilities. Monday 20th: Franchise retail. business to countless numbers of All you need to franchise and how professionals worldwide. Where MASTER FRANCHISING best to develop your network. and when? Save the date! Porte de Franchise Expo Paris 2017 is ready Versailles, from 19th March to 22nd to welcome 2,900 international Tuesday 21st: I’m over 30 and I 2017. Come and join us and meet the attendees and 97 nationalities would like to be my own boss. representatives of 460 brands from representing 110 international Open doors to fresh ideas! We believe 23 countries! concepts. 55% of the international in your project. The franchise world is expanding visitors have a franchising or master Wednesday 22nd: Women worldwide. An ever-increasing franchising project. The international & entrepreneurship. number of investors and franchisors dimension of the show will broaden Everything you need to know before are embarking on the franchising your view of franchising, and may setting up your business and the adventure. Why? Because the benefits encourage you to take that extra step know-how to help you become a of setting up a new business following and start franchising overseas. successful entrepreneur. the proven expertise of an established brand are incomparable, and FOUR DAYS TO CREATE YOUR New! We know that time matters, worth having a deeper look at. The OWN BUSINESS and we want you to best organize your Féderation Française de la Franchise, Enter with project, exit as your own business meetings. If you have a busy keeps interested parties up-to-date boss – this dynamic show is the best day, why not visit the show on a pleasant with the latest franchise news. place for meeting worldwide investors. Paris evening? We have arranged a
76 global FRANCHISE special late opening on Monday 19th. the show will be pleased to welcome you until 9pm! don’t miss this chance: Franchise Expo Paris really is the place LEARN FROM THE to be. TESTIMONIES OF Attend the conferences, ask the HUNDREDS OF experts, meet new partners: every day, a FRANCHISEES THAT franchise school conference explains the HAVE SUCCESSFULLY key concepts of franchise, while other EMBARKED ON THE country-specific conferences will help you better understand the different ways FRANCHISING ROUTE of handling a business abroad. TO SUCCESS” Find among 100 workshops the ones that can answer your questions, and benefit from the knowledge of worldwide investors and CEOs by listening to their experiences. Learn from the testimonies of hundreds of franchisees that have successfully ENJOY YOUR STAY IN PARIS This marketing or invitation code embarked on the franchising route Finally, of course, Paris is not just will allow you to order your free badge to success. business. La Ville Lumière is a must- and visit our show as a guest fp17y25. Attend the awards ceremony, which see, unique place of art, history, and don’t miss the opportunity to discover will reward the boldest and most cuisine! Take this opportunity to visit the franchise world in a stimulating innovative franchisors and franchisees. an incredible city: and professional environment: the right What are the secrets of their success? opportunity is just waiting for you. discover their experiences and choices, The alluring, romantic Eiffel Tower, If you have any questions, or just draw inspiration for your own activities beautiful at daytime or at night. to find out more about us and our and business projects. international event, visit our website The Notre Dame Cathedral, the Ask yourself the right questions and www.franchiseparis.com historic heart of the city, a masterpiece explore the stands on the show. The Your contact for the show: our staff is of architecture. exhibitors will be pleased to share their ready to welcome you, and our business knowledge, and here you will surely The Louvre Museum, home to service is at your disposal: contact us at find your way how to set up your own some of the best works of art in the [email protected] franchise: with over 460 brands and whole world. Franchise expo paris 2017 is ready. 3,6000 visitors, it’s just a matter of are you? choosing the option that best suits your The Champs Elysées: the best business plan! firms in the world are situated all A wide variety of services are offered along the boulevard. FURTHER throughout the four days of the show. Montmartre, enjoy beautiful INFORMATION There’s a nursery for your children, a scenery from the top of Paris. business center, and much more. Need WHAT: Franchise Expo Paris advice to best organize your trip and What are you waiting for? Time to WHERE: Parc des Expositions Paris stay? Franchise Expo Paris helps you prepare for your visit to the capital city Porte de Versailles find the best deals: on our website, of franchise. Visit, meet, learn and share! WHEN: 19-22 March 2017 you will find a dedicated page for hotel Franchise Expo Paris is the place where WEBSITE: franchiseparis.com/ reservation and flight offers, so that all you can start big. CONTACT: you will have to think about is enjoying [email protected] your stay.
global franchise 77 Only Franchise internationally?
OLDEST & LARGEST IN IFA membership enhances As an IFA Member you 1. credibility in international 6. will gain access to the THE WORLD franchise circles. most relevant information, research and publications The International Benefit from educational including Franchising World Franchise Association 2. programming on cross magazine and IFA’s Insider (IFA) is the oldest border franchising at and SmartBrief newsletters. and largest franchise major IFA events and association in the world. online. IFA offers best Access and introductions in class educational and 7. to domestic franchise professional development associations in more than opportunities covering 40 countries. 95% all major aspects of franchising as well as IFA advises the US Trade Of consumers live outside professional certification 8. Representative and of US borders and IFA’s through the Certified Department of Commerce reach and resources span Franchise Executive in an official capacity the globe. Program. to ensure that trade 3. agreements are conducive Network and share best for US companies using practices with the most the franchise model GROW experienced executives in internationally. INTERNATIONALLY international franchising. 4. 9. IFA advocates for free enterprise and rules based Joining IFA can help Advance your international franchise development trade and investment your company grow for franchised business. internationally. through exposure on IFA’s franchise portal, in its IFA works to shape a International Franchise favorable regulatory Opportunities Guide, and environment for franchising SPECIAL MEMBERSHIP discounts on exhibiting around the world with at the International partners including the US PRICING Franchise Expo. government and domestic 5. franchise associations. IFA offers special Find expert help in any 10. membership pricing area of international IFA mounts regular ($1,500 annual dues) franchising you can franchise trade missions for companies that do imagine by working with with the US Commercial not franchise in the IFA’s Supplier Members, Service to offer its United States. including the leading members a high-level, franchise lawyers, brokers, cost effective vehicle for consultants and more. market exploration and development.
What are you waiting for? Time to grow beyond your border at www.franchise.org/join-ifa 10174a TFC-GFMAGADVERTS_10174aADVERTS12/09/201611:37Page1 Do You Want to Markets? into New International Expand Your Business For more information contact us now - í that will: the advisors Use í í The International Franchising Centrethe advisors, has track network and í record helping of businesses like yours succeed in new markets. Email: Tel UK: Web: Tel Int: Help you identify markets and attackthe best Find and master franchisees partners youthe best Ensure your operational and legal structure is watertight Guide youto international franchising success. [email protected] 01904 561598 +44 (0)1904 561598 theinternationalfranchisingcentre.com
10174A ADVICE
PEOPLE POWER
It’s a truism that your most important resource is your people, says HR expert, Gemma Tumelty
n franchising, as with any business, people are our greatest assets. The employees of the LOCAL ADVICE WILL franchisor, the franchisees MOST EASILY BE Iand their staff all have their role to AVAILABLE FROM play in maintaining the relationship AN INTERNATIONAL with the most important people of all, FRANCHISE the customers. It therefore stands to CONSULTANT BASED reason that recruiting and training the IN YOUR HOME right personnel throughout a franchise MARKET” business is a critical factor in both growth and brand sustainability. Yet too often franchisors are so desperate to recruit and grow their network that they skip steps, ignore warning signs and hope for the best. It’s been said that in the past that if they had a pulse and a franchising. Indeed it is often quoted negative publicity and also disruption wallet, they were good to go. Needless by franchisors as being their biggest to relationships which have been to say that’s a recipe for disaster. challenge. Finding the right people at fostered with clients. In any organisation, the most the right time to become franchisees is However, getting recruitment effective recruitment of staff is a hard enough for any system, regardless wrong with an employee is, whilst complex and thorough procedure. The of the level of competition between frustrating and incurring unwanted first step is to advertise the post, selling franchisors for franchisees and the costs, not usually the end of the the business and the opportunity extensive compliance requirements in world. And while bad franchisee and being clear on skills needed. some countries. recruitment does not always cause Next is sifting through applicants But the pressures which lead to major problems, the stakes are usually and interviewing on the basis of mistakes should not be excused or higher when it is a business owner knowledge, attitude, skills, experience given in to. No matter how onerous who has responsibility for part of your and alignment with the culture and finding the right people may be, the brand reputation. And the necessary values of the organisation. You may mistakes that poor recruitment intervention required by the profile that potential employee, you can result in will be infinitely more franchisor, alongside the risk of brand may conduct interview exercises and energy-zapping, time-draining and damage and even court action, is in tests and you would then background costly to your business. Franchisees my opinion usually more damaging to check and ask for references. should also remember that bad your business. Why on earth then would you do any recruitment of employees can be a What a distraction from your differently in recruiting a franchisee costly mistake, too. Estimates vary business and your work to support the to entrust with your brand and business as to the exact impact on the bottom good franchisees! All the time, energy model? The shortcut to business line of a business, but it certainly goes and money wasted could have been ‘success’, selling a franchise to anyone further than the fees you have wasted better spent elsewhere. So don’t chase who is keen and interested, may bring with a recruitment agency. Other risks the money now, think long-term, immediate rewards but it’s hardly the include theft or embezzlement by a about whether you want and trust this way to build a brand which establishes disgruntled member of staff, damaged person to be your business partner confidence and credibility. employee relations and morale among under your brand, possibly risking all I recognise that recruiting franchisees those who remain, lost productivity, the blood, sweat and tears you have is one of the most difficult aspects of litigation, public scandals and spent building it up to what it is today.
80 GLOBAL FRANCHISE THE RIGHT PEOPLE What you need above all, is for your franchisees to fit with your values and your culture. You need them to understand and believe passionately in the brand and their ability to contribute to it and be successful in their own right. A good franchisee needs to be a go-getter, a self-starter but also compliant and systems-oriented, they need to trust the model and want to FRANCHISEE build it. Franchisees need to realise SUPPORT that they are not buying a job. Owning Many of the a franchise means running a business concerns that and if you ask anyone who has set up franchisors as a sole trader or a one-man-band, it is should bear in mind far from risk-free and is rarely, if ever, when choosing their a get rich quick scheme. franchisees apply to Managing expectations is one of franchisees who are taking the most crucial things you will do as a on employees, so I won’t franchisor. You don’t want to dampen spend too much time detailing their dreams or take the wind out of them again now. However, it is their sails but, at the same time, make worth remembering the much-used sure you do not store up problems for saying that ‘culture eats strategy for yourself later on. In your keenness to breakfast’. You can have all the plans sell, do not over-promise. The risk of you want but if every single person doing so is that, when your franchisee within the organisation does not live Master franchisees under-delivers on unrealistic aims you and breathes the culture, then the must be able to develop the sales and allowed to build up, confidence is lost business will suffer. In a franchise service standards of your business in and the relationship between franchisor organisation you will have direct this new territory, uphold your vision and franchisee becomes irreparable. employees in the head office and then and brand image, and also identify Depending on the business and the employees of the franchisees. franchisees in their territory that franchise system they may need to So as a franchisor, it is worth thinking will do the same. Master franchisees be qualified in a certain skills set or about how you support the franchisees should possess strong management have professional qualifications. If to induct and train their staff in the skills. Experience in the specific no qualifications are needed, are you brand, in the culture and make them industry is desirable, as is experience clear on your desirable skills set and feel part of the wider organisation. in franchising – one of these is personality profile that are needed to Do you make sure that your essential and I would certainly advise maximise their chances of success? franchisees are treating their staff you to find someone with both. It’s all part of your brand, after all. fairly, pay them correctly and ensure The role of a master franchisee Why not conduct a research project their workplace health and safety? requires ambition and business skills. of your top-performing franchisees If not, it’s high time you did. Protect It requires someone who can help and create a benchmark of the type of your brand and the employees within drive others to build their business, person who would be more likely to it by supporting your franchisees to real people skills, the ability to manage succeed in your model? This might also stay on the right side of the law. and motivate, problem-solving skills help in crafting your key messages for So what about franchisors who as well as knowledge of recruiting and recruitment advertising, speaking to have developed their businesses to marketing. However, the excitement the people you most want to sign up. such an extent that they are looking of launching into a new country, the to branch out into new territory relatively narrow pool of qualified and altogether, and looking to find a master cashed up individuals or organisations ABOUT THE AUTHOR franchisee to help them do so? Taking with the desire to invest in your brand your successful and well-developed may cloud even the most sensible Gemma Tumelty is managing franchise brand international via franchisor’s judgement. director of The HR Dept, the UK’s a master franchisee is a big step I write this as the managing director largest network of HR professionals. requiring a lot of people, time and of an organisation that is currently The company has 61 licensees providing outsourced HR support money resources, and whilst this is seeking the right partner to launch to local businesses in 82 territories a potentially exciting and profitable our brand into our chosen market, around the UK and Ireland and it is venture, get it wrong and the brand Australia. As with any franchisee/ set to expand into Australia. www. damage and cost to the business can franchisor relationship it’s important hr-professionals.co.uk once again be huge, potentially ruining to have clarity from the beginning over it for good in that country. expectations and goals.
GLOBAL FRANCHISE 81 VIEWPOINT
PIP WILKINS NED LEVITT
Ned Levitt, a partner at Dickinson Wright Pip Wilkins, bfi chair, LLP, Toronto offers discusses the merits advice on how to of the Prospect evaluate a franchise Franchisee Certificate opportunity
ranchising as a model to expand an existing areful consideration and thorough due business is something that has been successfully diligence is critically important in the used in the UK by many brands. The model’s purchase of a single franchise. For the structure of a local business owner, combined YOU WILL NEED TO purchase of master franchise rights (the Fwith the proven system, support, brand and economies of Cright to sub-franchise to others) there is another layer FULLY UNDERSTAND scale of the network as a whole is a powerful mix. THE COMMITMENTS, of complexity, challenge and risk. Commonly, the As a result of this, some extremely successful businesses STRUCTURE, investment needed for such a purchase is fairly high to have used franchising as a way of expanding into new TIMESCALES very high. Accordingly, the consequences for a failure in markets abroad. In the UK, we have seen a number of AND COSTS” this scenario are substantial. successful brands from abroad establish themselves here The master franchisee usually plays the role of the through franchising, such as Home Instead Senior Care, franchisor in their territory, which can be a region, McDonalds and other big names on the high street. This can state, province or the entire country. However, be very positive for the UK economy, as it means that much the division of responsibility between the master of the revenues generated by the franchise businesses in the THE DIVISION OF franchisee and the franchisor can differ from system UK remain in this country. RESPONSIBILITY to system. The master franchisee in many instances Similarly, many British companies use franchising when BETWEEN THE MASTER shoulders all responsibilities of the franchisor in the expanding into foreign markets, such as VIP Bin Cleaning FRANCHISEE AND THE territory. In other situations, the franchisor provides and Water Babies. Marks & Spencer is also a good example FRANCHISOR CAN specific resources or performs specific functions, such of a UK business which has been very successful using DIFFER FROM SYSTEM as training new franchisees. Once it is known who is franchising for many of its overseas outlets, even though it TO SYSTEM” going to do what, then and only then can the split of doesn’t within the UK. front end franchise fees and ongoing royalties between When looking at taking on a franchise from an overseas- the franchisor and the master franchisee be determined based business, as with all franchises, you need to do with any degree of fairness. All too often, the franchisor your research on the company, the market and your own has a pre-determined idea of what they want from the capabilities. Interviews and meetings with the franchisor master franchisee without proper regard for the cost are a part of the process with any franchise, so if you are of running a franchise system in the territory well and dealing with a business coming over from abroad, you profitably for everyone. need to know if you will be dealing with the business Other issues for the prospective master franchisee directly from their home country or a master franchisee include: is the term sufficiently long to ensure that a based in the UK. reasonable return on investment can be achieved? Is You may find that you have an opportunity to look at the yearly quota for selling sub-franchises reasonably becoming a master franchisee, which means you will be attainable? Will the master franchisee have to adhere acting as a franchisor to a defined area – possibly the UK strictly to the franchisor’s form of unit franchise in its entirety. Again, you will need to fully understand the agreement in all circumstances or will there be some commitments, structure, timescales and costs. flexibility? Will the master franchisee administer a Do make sure you check the brand’s standing in their regional advertising fund for the territory or will it all own country – if they are operating from another country, be controlled by the franchisor? If there are critical it is worth looking to see if they are a member of their home inventory items, who supplies them to the franchisees, country’s franchise association. If you are dealing with a the master franchisee, the franchisor or third parties? master franchisee or a franchisor in the UK, you would It is quite common for franchisors to charge initial want them to have bfa membership. franchise fees for master franchise rights. The As you look at these different opportunities, you may see purchaser of these rights should scrutinize such fees a business that could give you the platform to change your to be comfortable that they make sense, both from the life and give you a whole new challenge and outlook. point of view of return on investment and how they compare to other franchise opportunities.
82 GLOBAL FRANCHISE exit with new business opportunities Enter the expo with investment 19-22 projects march 2017 PARIS PORTE DE VERSAILLES John Investor Master 36 000 Franchisee entrepreneurs
1 000 Lionel DINDJIAN To become Directeur Général Mail Boxes Etc. Master Franchisee 460 franchise brands
Follow us @Franchise_Expo Order your badge at Franchise Expo [email protected]
Take part in the world largest franchise event and connect with more than www.franchiseparis.com 460 brands from 87 sectors and 23 countries. Meet the most successful concepts looking for partners on every new market. Attend international development YOUR CODE: FP17Y25 dedicated workshops. The international franchise market place
An event: Organised by:
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