Business is up

How is business in this gloomy economic climate?

PATRICK McMICHAEL: Business in this climate for Domino’s Pizza has proven to be very positive. As of January we announced 5.2% sales growth and since then we have launched a new menu and we have put out information that the menu is trading well for us at the moment so we are fairly pleased as a company.

We would expect in these economic times that we would see an increase in traffic as more discretionary items and food items are looked at, so overall we are happy with how we have been going.

We do have a lot of expansion planned at the moment. We have come across the last two year period where we have reached a point where it is a maturing business and there will be different growth to previously. We have mapped out the next wave of Domino’s which will see us coming into Melbourne and finalising the growth strategy in Melbourne and also looking at Sydney and where our penetration should be there. We have also mapped out our instore strategies in Sydney and for all the other capital cities, and we are also looking to expand regionally.

Obviously we are pretty excited about all that for the brand.

 

TANYA ROBERTSON: Business for us has been very good. Last year we achieved more than 20% growth on what we call “like-for-like” – that is, fully trading salons – and 29% when you include the salons that hadn’t been trading for a full year.  

Our performance so far this year shows we are on track again for more double-digit growth.

The industry that we are in, beauty, has a little bit of protection around the discretionary spend in that as a female, if you wax you are always going to wax. You are not about to start shaving again and you might spread your appointments but you will not stop. From the Franchisees perspective, every time we opened the paper it was doom and gloom and the world was coming to an end so we focused on what we did best in the first place – providing a great customer service experience. We also have a very simple business where our cost of goods is not very high,  and staffing makes up our biggest cost, so it is not very hard to focus on key business principals to make your salon successful.

The only issue for us was that franchisee enquiries have been down, which has started to change over the past three months. We are planning to open four salons by the end of the financial year – one in Canberra, one in Queensland and two in Victoria.

 

PAUL LINE: We have had an excellent year, growing 50% year-on-year. There are a couple of different business models within the business where we are half franchisor and half wholesale telco enabler. We have good growth projections for next year where we are budgeting for 25% growth year-on-year.

In terms of the franchising side of things, we have gone through a process of in-sourcing our sales and business development so that we have really gone through a learning process moving between the two arrangements. We have spent a lot of time working on our sales processes, so as a result we haven’t really brought on a lot of new franchisees in the past 12 months. There have only been 3 new stores in the past 12 months but this year we are projecting a further 12, so  there will be a 20% increase in store numbers.

We have seen the number of franchise enquiries increase, but we have found that closing those enquiries has become a lot harder. I guess we are in a fortunate position of the telco industry being fairly non-discriminatory and it is an essential service. There is a very high loyalty in this country to the Telstra brand where Telstra is the most expensive brand in the market. This means that people who two years ago wouldn’t consider changing are now thinking that if they can save a few thousand bucks for their business, then now would be the time to do it. I think the economic climate has worked more in our favour than against us.

 

JARROD MONTIGUE: We have had a fantastic time over the past 12 months where we are growing like-for-like sales at 5.8%. With all the doom and gloom that has been out there, books are still considered an affordable luxury out there and people enjoy the escape as well so it is pretty much a recession proof industry where there will always be people out there buying the discounted items right up to those purchasing the higher end products.

As far as growth goes with our franchise model we have had a consolidation period over the past 12 months where even though we have been in the franchise business since 1977 we have taken the chance to go back over our model and see if there were areas that needed enhancing or improvement. We have had what you could call a good hard look at ourselves and some of our internal systems have been reviewed, especially in our advertising and recruitment processes and also our training and induction programs. We have made some slight changes with that.

Over the past few months we have started to see some very solid inquiries coming through and the next step is to convert those into live applications. Similar to Brazilian Butterfly we have a couple of stores locked in already, subject to finance, so we are looking to get back into North Sydney at Greenwood Plaza and we have had a number of independent book stores approach us to convert into an Angus & Robertson branded outlet.

It has been a really good six months for a solid review of our systems and we are coming out the better for it.

 

ADRIAN GASKIN: We are a young franchisor, we only started franchising in 2004. The last 12 months we have increased our franchisee network by 46% and we are currently serving in excess of 12 million customers per year and turning over more than $135 million.

Talking about the current marketplace, as a young franchisor we went out with a lot of ambitions to do things and after 18 months of franchising we stopped for 12 months to reassess how we were going to evolve. We ‘relaunched’ in August last year, which I note that a lot of franchisors have been doing in this economic climate and fortunately we did it earlier than most, and we find that the current candidates really suit our model because we really tend to push people away when they first approach us and make sure that they are making the right decisions. We insist they go away and spend times in the stores finding out what the good things are and the bad things as well. They have compulsorarily got to go and talk to other franchisees – we insist they do a full due diligence before they meet with our assessment committee to decide whether to select them or not.

Basically we have to be pretty convinced that they really know what they are talking about.

We have found with the current economic climate that people are doing that anyay, so the last 10 franchises we have put on have been very good for our system. Our ambition is to grow to 200 outlets in the next three to four years and the way we have been moving forward I don’t see it being an issue getting there. It is a different way of getting into newsagencies than being an independent operator.

Like everybody else we have been having a pretty good time at the moment, and I think as you get more experienced as a franchisor you probably make a lot less mistakes.

 

There are a lot of positive stories around the table – is this indicative of franchising overall in Australia at the moment?

 

STEVE WRIGHT: Yes it is actually – somewhat to my surprise as I expected things to be worse than what they are. Not because of the way people are managing their franchises, but more because of the way people and the media were predicting a lot of doom and gloom and it hasn’t panned out that way.

I have done a lot of reporting in the past about franchise systems around the country through our annual round of state conferences and the stories have been quite similar in most places.

However some conditions are not better in terms of a number of key elements, they are worse. One of the issues is getting bank funding.

There is some new interest from new franchisees, but they are being very careful about it, which is a good thing.

Interestingly there were a lot of people who thought trading conditions would be a lot worse than they actually are, which hasn’t panned out that way. A lot of good franchise systems took the trouble to prepare themselves last year for business to drop off and as a result their profitability looks pretty good.

A lot of businesses are reporting an increase in turnover from the stimulus package that went into the retail and services industry where there were staple purchases rather than discretionary spending. Some have had no drop-off in turnover, they have actually increased their turnover and their profitability is better because they were anticipating the worse.

Even in bulky goods, which frankly we were expecting to get hammered, there have been some really good stories. Clark Rubber, for example, closed three stores last year and two of those stores were actually making money – it wasn’t as if they were unprofitable and had to be let go. The people were in two minds about whether to continue and these are big investment stores, so they sold out. But those two stores have since re-opened. In one case it was a next door neighbour who noticed all the customers still showing up to the store and then wondering where to go now it had closed.  Now that it has re-opened the results that the new owner has achieved are better than the previous owner year-on-year.

 

Have you used the financial downturn to really re-focus on the core offer of your brand and services? Did the downturn cause you to re-focus or would you have done it anyway?

 

ROBERTSON: Our re-focus was probably because of the downturn. The salons are successful – some more than others obviously – but they all make money.

This was an opportunity to step back from the business, and look at our key drivers which we couldn’t do previously because we had such a fantastic run of business up until then.

A couple of incoming franchisees also took the opportunity to reassess, planning for the coming six months waiting to see what will happen in their current environment.  It is one of those catch-22 situations for some people where they are planning for retrenchment – if they don’t get it then they will stay where they are but if they do then they will come to Brazilian Butterfly.

There is no doubt that we have taken a step back and looked at ourselves internally. There were a few things that we needed to be more aware of as well.

 

LINE: We were looking at the business anyway. We actually started the process 18 months ago, before the real crunch hit. The process was driven more by our maturity and the life-cycle stage of the business.

We also had a master-franchisor deal where we had to extricate ourselves from that relationship. It put us in a situation where we had to re-assess everything we were doing anyway. It wasn’t so much driven by the economic climate, but having said that [in hindsight] it was very well timed and has worked out well for us.

We have had a lot of people who saw our franchise opportunity three or four years ago and didn’t come on board then and now they are actually coming back to talk to us again and I think we are in a much better place to actually deliver greater systems and assistance than we were then.

 

Have you had to work harder to maintain franchisee expectations at realistic levels? Many franchisees would also have similar worries of downturns in business.

 

GASKIN: It has been a lot easier for us because we are not a discretionary spend. Most of us have been going to newsagencies since we were being pushed in a pram, so it is part of the traditional Australian shopping experience.

Certainly we have got to be smarter and ensure that our supplier relationships are the best they can be to give our franchisees an advantage, but that is something we are working on consistently.

For us we drew back to have a look at our model and there was a recognition that the economic climate was going to deteriorate. That is why we withdrew our franchise fee and looked to evolving our model to how we would take over existing businesses and convert those to a franchise business and somewhat unusually for the franchise industry we leave a fairly solid investment in the business. Inevitably our franchisees tend to be buying existing businesses so there are figures that can be substantiated and then you can layer in our supplier advantages.

 

The main issue is that we are not a discretionary spend or a luxury.

 

ROBERTSON: That’s true. In the beauty industry the luxury items would be the facials and the massages which are more discretionary and certainly anecdotally we are hearing that people have stepped back from those services.

But waxing and nails are still seen as quite essential because it is a process that you [need to maintain] once you start and you find the money for it.

I think where we had to pay attention with our franchisees was those where knee jerk decisions were being made that were not good for the business or the brand. We needed to show that the figures are actually showing something different and we were showing strong growth.

If everyone had been affected then it would be a different story, but there are always one or two outlets where it is outside influences and we have had to have conversations to explain why [the situation exists].

 

MONTIGUE: We have had a similar situation where we made a conscious effort at our conference in September last year to really hit home how important those basics are in business. We talked about the basics of customer service and making sure you have a clean and presentable store – just really basic things.

There wasn’t much conversation about the doom and gloom with most of our franchisees, although I am sure it was playing on the back of the minds of some of them who were thinking there would be a good Christmas with the stimulus package and then it would be downhill from there. In fact it has been the opposite and we have reinforced the statement that franchisees need to keep doing the basics and connecting with the local community and you will find that when times are tough, people are creatures of habit and they will go back to where they have had great experiences before and they will keep coming back.

 

LINE: To pick up on Steve [Wright’s] point about the negativity, it was almost a PR job where we had to tell our franchisees ‘look guys, things aren’t actually as bad as they are saying’. We have also done things like blogs on our website openly talking about the economic climate and the things that are really happening in our business and those in the economic environment.

As much as anything it has been a PR  exercise to keep people’s spirits up but it is a very fact-based message. If you are doing the basics in your business then it will see you through tough times, but you can’t take your focus off those fundamentals.

 

WRIGHT: Franchising as a rule is not about very exclusive services or products. It is about delivering things that are able to be delivered in a uniform way across locations and geographies so that you can get economies of scale and you can do quality control and ease of access to build brand familiarity.

You will struggle to find a franchise brand which is exclusive or at the top end of the price range, because usually they are about value and innovation and a niche. Telcoinabox is competing with one of the biggest marketing machines with all the inertia going for it, but because it is an ubiquitous market because you can copy the system and offer a niche which can be reproduced easily then there is good business to be done there. But they are not going to charge Telstra prices because they would be driven straight out of business.

The thing that is working really well for franchises is that people recognise that and it encourages loyalty. The customer gets a certain experience and they will go back if the experience is good and the value is there.

Franchising has been doing better business than the corporate community and certainly better than the small business sector generally because of those reasons.

 

LINE: This crisis has certainly been a great antithesis to the inertia that has existed by moving people out of their comfort zones in many different ways. That has been good for certain businesses.

 

What challenges are facing the franchise sector now?

 

MONTIGUE: Bank financing is certainly one. In our sector potential franchisees are being very selective and there are certainly more options available. There are also a lot more reasons for people to be more cautious as they make these decisions too.

 

McMICHAEL: A lot of the franchisees I am talking to are interested to know the evolution of the brand and where it is going. From the Domino’s perspective, prior to the economy being where it is now, several years ago we were putting record numbers of stores on the ground and we had just gone public so we recognised that we needed to be looking at the future.

We spent a good two or three years searching the soul of Domino’s Pizza and thinking about what we were going to look like in 2010 or 2011. We have recently launched our three year strategic plan which timed in well with the downturn in the economy and really sets our franchisees on the path for the next evolution of our company. As I am talking to potential franchisees they want to know if we have a plan and what the brand will look like in the future, what changes are being looked at and what effect those changes will have on the business moving forward. It is a challenge if you don’t have a strategic plan but it is positive if you do have it and you are able to share it.

 

LINE: You definitely need to be talking about your plans. You can’t stay in desperation mode at all, you have to be talking about your brand and staying focused on it.

 

McMICHAEL: The key is also to do that when you are trading at your very best. That is the point, you need to make that decision at your very best point because if you are going down and making that decision on the back foot then it won’t work.

 

MONTIGUE: I would agree that there are a lot of people asking about the brand. We have had a similar experience where people have been very keen to find out what our plans were and the direction for the future.

ROBERTSON: The other problem from our perspective is that we tend to attract a slightly younger franchisee. We are an investment of $200,000 to $250,000 so while we are not top-end we are not at the low end either.

For someone who is 25 to 35 to have that sort of cash is getting harder, so we are looking at other ways of getting the right franchisee into our brand. We don’t want to go down the track of lowering franchise fees, It’s looking at those people who are a great manager or have a real have a passion for it but just can’t get the money together – they might be able to get some of it but not all of it. That is the challenge in that we need to get the right people as well.

We are not a typical ‘investment’ franchise, you can still make money if you put a manager in but it is better if you really work it and will manage it yourself. If you haven’t got the right staff and you can’t do it yourself then you will be in trouble.

 

LINE: Finance is definitely a challenge for most of us. We are a very low cost franchise compared to others sitting around the table but even at that level it is tough.

We are working with the banks to get our accreditation which we don’t currently have, but even that presents challenges. When we are talking to the bank they are talking about fixed and floating charges and what is needed for security and the potential debt down the track. You start getting into some negotiations with the banks and those conversations can be quite challenging because there is not a lot of flexibility from the banks with regards to some of those issue. We had never considered getting accreditation because we didn’t think we would need it at our level. Now we have re-evaluated that because we do need it and it is an essential part of our strategy going forward.

Finding the right people, whether you are in good times or bad times, is critical.  When you have that personal touch that is when you can really make some money and that all comes down to smarter marketing strategies, better use of media, smarter recruitment processes, better profiling of people coming into your business.

 

GASKIN: We have accreditation with banks and we find it relatively easy to make sure that we have the right calibre of people applying. But our accreditation is pretty well 50% of the entry fee.

We are finding that banks are not a big issue for us but that accreditation has been very important in addressing that issue. The more accreditation you have then the harder you will work with the banks and the better the calibre of people you have applying through you.

 

McMICHAEL: We have put a lot of effort into our selection process bringing on the Nathans profiling system and fully integrated that throughout the whole process. We have three different levels of interviews to bring in the correct franchisee.

The Nathans team came in and did a full round of training with our franchise team and our operations team which was really along the line of developing the interviewing and selection process.

We also work with the incoming franchisee looking at their business plan and the projected cash flow across the first three years really makes sure everyone is on the same page.

If we get that right and the benchmark scores for the incoming franchisee are all correct, by the time we go to financing we are not finding that there are any issues. There are no surprises there, we have vetted the franchisee correctly and the business plan has been done properly with the franchisee and franchisor having ownership of that plan. I know that scares a lot of franchisors signing off on business plans, but we feel that if we don’t do that then that is where the risk comes into it. If we have completely separate expectations then that is where disputes form later down the track and the ability to achieve common goals becomes less achieveable.

 

When Wealth Creator conducted this roundtable in 2008 it was just after the Franchise Code had been introduced and there were still a few teething issues with it. Have those concerns died down now?

 

GASKIN: One of the things we have looked at closely is the disclosure of rebates. Our system is one where we give 100% of our rebates back to the franchisees. They pay a royalty which is transparent but all the rebates get given back. All the agreements we have with our suppliers are intrinsic on a confidentiality agreement. So a supplier attracts an inordinate rebate but the last thing they want is for someone to leave the franchise system and demand the same rebate. Obviously there must be security of that knowledge.

I understand that is now again under question however?

 

WRIGHT: It is something that has been suggested at the latest review, but I don’t think it is a top order issue.

It is also a competitive issue for other systems operating in the same industry where if you disclose, for example the marketing value and what the wrebates are and how it all works then essentially you are describing your marketing policy, so there are some pretty obvious reasons why open disclosure of that is not a good idea.

It is available for the ACCC to investigate at any time anyway, so the mechanism for it to be scrutinised is there.

The government is still in the process of responding to a review of the franchise code and that is likely to focus on some enhancements to disclosure, as opposed to dramatic changes. I think the likelihood of it being a response which adds significant compliance for franchise systems is unlikely.

However one can never anticipate too much.

There are still a couple of things that raise some interest, such as the concept of good faith laws and regulations for negotiation. Otherwise there are some positive changes such as disclosure  and mediation and perhaps even some government help in those areas. We are lucky in this country that there is good low cost mediation that gets results. That saves a lot of people a lot of time spent with lawyers, so if that can be further improved that would be great.

 

After this period of volatility, what comes next in the evolution of your business?

 

GASKIN: For Supanews we have gained some excellent momentum through this time which will stand us in good stead. But again I think that may be traced back to the period where we put franchising on hold to let our system evolve.

I only see good things coming. I see us able to achieve that expansion towards that 200 store mark within the next couple of years. If the economy improves and people get their confidence back up then we will only move forward.

Having said that we will not change our basic philosophy. We will still make sure that every franchisee is a good franchisee – you are only as good as the last franchisee put on the ground. Part of our system demands that our incoming franchisees go back and talk to the last six franchisees, so if we have done something wrong then we crucify ourselves. It makes us work harder to ensure our decisions are correct.

At the end of the day we make our final decision on selecting a franchisee by looking at them and saying ‘when we have a disagreement 12 months down the track, are we going to have enough mutual respect that we can move forward?’ and if we don’t believe we can then it doesn’t go any further. If we think we can then they are successful.

No matter how well we try and do things there will always be some disagreement and you have to have that mutual respect.

 

MONTIGUE: Similarly to what Adrian said, through Angus & Robertson we have had a good period of consolidation and there has been a good chance to review our systems and processes. We are in a much better place than we were 12 months ago and it is a really exciting time now.

One advantage we have had over the journey is a very good brand credibility in the marketplace – it is a brand that is instantly recognisable as a good place to go for books. Obviously one of our directives is to really enhance that profile in the franchise community, where I feel that we haven’t done a good job of that. I still get enquiries today from people who weren’t even aware we are a franchise.

Another avenue I am very keen to explore is that we have actually got a larger portfolio of company stores than franchise stores. There is certainly a plan to convert some of those company stores into franchises. There are 117 store managers who are potential business owners and franchisee owners which is a resource we haven’t tapped into.

One of the things I did not so long ago was to put a correspondence piece out to these stores saying that some of these managers have been with us for 10 to 15 years who would be obvious candidates for franchisees.

I have had a great chat to some of them, even some of those who are still in the dream phase and may be 20 to 25 years old and dream of running their own business one day. The next step is to work out how we as a franchisor can help them achieve those goals.

Through our accreditation with the NAB at the moment, even putting some of our managers in the right direction with some business planning advice and financial planning is a start along the path to see how far they can go. We are also looking internally at how we can help them through maybe waiving the franchise fee – anything is possible at this stage.

There are 117 options out there and if we can convert between 2% and 5% then that is a great start. Obviously there is also a great succession plan we can tell our employees as well, that one day they start off as a casual employee or store manager and then wind up running the store.

 

WRIGHT: What has been the motivation to switch to a higher mix of franchisee versus company stores?

 

MONTIGUE: Obviously there is a direction within the company to do that but over the journey there used to be more franchise stores than company stores as well. The majority of our franchise stores are very profitable and I would like to think that the growth would continue with the conversion of some of these company stores.

 

GASKIN: Let’s not kid ourselves – in the main franchise stores are more profitable than corporate stores, aren’t they? You have that ownership factor in there.

 

LINE: I think at Telcoinabox we also have a very positive mindset going forward. The last 12 months have been good for franchising in a lot of ways because there has been a shakeout of the more opportunistic franchise groups that haven’t survived. That has been aligned to the much greater education of franchisees and greater due diligence from shopping around for different options and people generally being more cautious.

I see that as being a very good thing for our business and for anyone else who feels they have a good business. When times are good or bad a good business will always do well.

In terms of franchisees coming into the business I know the past couple of years have seen several people attracted to the ‘franchisee lifestyle’, but I think that might change a little bit as people become a bit more hard nosed and more focused on return on investment and actual results.

Lifestyle was a great idea when it was boom times and it all sounded fabulous. But in this climate people are more interested in knowing if they put their money into something that they will get it back.

 

ROBERTSON: Our key focus is going to remain on growth and growing the Brazilian Butterfly brand. We are at 20 salons now and we want to push to 30 in the next 2 years. The focus in the last 12 months has been on getting the franchisee base right and getting the systems in place so they can focus on their business and we can grow the brand.

We have solid businesses out there that we can show as examples. Like Adrian, incoming franchisees must talk to existing franchisees. If they come to the second interview and they have not done that then I don’t go any further with the interview.

As a company our biggest challenge is managing that growth in a constructive way.

 

McMICHAEL: The mindset at Domino’s is very positive. We have a mature system and a pretty high store count and we are well into our new strategic plan for the evolution of our company. A lot of it is simply focusing on what we do best to make sure our customers get the best product with the best service and our offer is the best it can be.

Part of that plan is looking at our image and where we see ourselves in the future. We just put a plan on the ground for the new 2020 model and we are seeing good reviews from that and positive sales.

We feel that our franchise community is very positive at this point in time which is based on that plan and we feel that as we evolve in that plan we will reevaluate what our next strategy will be. As far as our targets for recruitment go, we will continue to expand in all markets in Australia. We have isolated where that growth is and we will be talking about how that growth will play out when we announce our results.

Overall we have a really positive outlook for our future growth.

WRIGHT: We will be focusing on two main areas which are education and lifting standards across the board.

In the course of the inquiries last year we said that education was a key to getting past some of the problems reported to those inquiries. From a franchisee perspective it is about entering the sector with your eyes wide open, understanding it better on arrival and thereby having a better relationship with your franchisor. For franchisors it is about understanding the importance of good recruiting practices and policies because an organised approach to that side of the business has really lifted in the past 12 months.

We have taken it upon ourselves to try and actually help potential franchisees with seminars in every capital city. We run seminars in conjunction with the ACCC about getting into the system with your eyes wide open and those campaigns are starting to get some traction. The ACCC is very pleased to see that the sector is taking this responsibility upon itself. Ultimately better educated franchisees means better relationships with franchisors which in turn means more profit and everyone is happy. It has real commercial drivers. We are also working with vocational and educational institutions to develop programs so that there is a longer pathway for people rather than just getting some basics and that is the end of it.

A possible benefit for franchises out of this downturn is the disenchantment that people have with big business might rub off in a positive way for franchising.

Franchising is a very compliant cycle of business and it has some really good in-built disciplines that stop some of the excesses you see in the corporate world from happening. It has got big businesses and it has for twenty years, but you have never heard of the head of a franchise company heading overseas with shareholder funds.

I think that is because of the way it is set up and the regulations it adheres to. It pays taxes and there is not much chance for a cash economy in franchising. There is also a mutual profitability that goes on between a franchisor and franchisee and that puts a natural break on excesses.

 

Taking part

Jarrod Montigue

Position: Angus & Robertson national franchise manager

Founded: 1977

Number of outlets: 174 (57 franchise, 117 company-owned)

Annual turnover: $60 million (franchise stores only)

Headquarters: Melbourne  

Growth targets: 100 stores in regional Australia

“One of the main benefits that Angus & Robertson has is an incredibly strong brand recognition in the market. Part of that is through history because Angus & Robertson was actually one of the pioneers of franchising in Australia where our first store opened in 1977 in Hurstville in Sydney.

We have franchisees who have been in the business for 25 years and the number of stories they could tell could have them writing their own books, to be honest.

Another strength we have is that we are enhancing our franchise offering and franchise model. Over the last six months we have put a lot of work into our training and induction programme, and also we have taken the opportunity to look at our marketing plan and strategy as well.”

Patrick McMichael

Position: Domino’s Pizza Enterprises Australia and New Zealand franchise development manager

Founded: 1960

Number of outlets: 322 (in Australia)

Annual turnover: $591 million

Headquarters: Brisbane

Growth targets: All states in Australia

“We offer a worldwide-accepted brand, which is a market leader in Australia. There is a long track record of success with operating franchise stores and company stores, which gives franchisees confidence in the system. We not only sell the franchises and manage and work with our franchisees, we are also running our own company stores, which are very successful as well. When you have a company that can be successful in the core business it gives a lot of credibility and gives incoming franchisees confidence in the business they are coming into. We have invested very heavily into our own business over the years, which has given us the platform to gain that number one role in the continued evolution of our business.”

Adrian Gaskin

Position: Supanews managing director

Founded: 1994

Number of outlets: 51

Annual turnover: $135 million

Headquarters: Brisbane

Growth targets: To reach 200 outlets

“The greatest opportunity for franchisees of Supanews is that they are doing their due diligence on a business that is already trading. It is very easy for them to substantiate the profit of the business. Because our recruitment process for new Supanews owners is very thorough, they have worked in the stores and there are no hidden surprises.

We insist on them going through an ardent process to get there which is great because there is nothing hidden and no surprises.

At the end of the day it is all about reassuring them as they wonder am I going to make money and will I be comfortable in the franchise? That is ultimately the most important thing – that people are comfortable and enjoy what they are doing.

Steve Wright

Position: Franchise Council of Australia executive director

Headquarters: Melbourne

“The Franchise Council of Australia is unequivocally working for the good of the whole sector. It is not about any sectional interests, it is for franchisors, franchisees and suppliers on the understanding that they are mutually interdependent.

You can’t have a successful sector that is only successful in one of those areas.

Lately we have taken greater steps to be more inclusive for franchisees and suppliers to try and make sure that their voices are well heard as well as franchisors.

Those initiatives are going really well.

There are others around the place that advocate a different approach, but nearly always it comes down to an adversarial approach. But that is great for lawyers and that is it.

 

Paul Line

Position: Telcoinabox general manager

Founded: 2003

Number of franchisees: 55

Annual turnover: $33 million

Headquarters: Sydney

Growth targets: Australia wide 25-30%year-on-year growth for 2009/10 compared to 2008/09

“What sets us apart as an opportunity is that unlike pretty much every other franchise group I can think of, when you come into
our group you get to create your own brand.

You get to create your own brand and we enable you to do that – that is probably our key differentiator. Having said that, I think there are some other factors that make us unique.

With Telcoinabox you don’t need a shopfront, there are no geographical territories and there is absolutely unlimited potential.”

Tanya Robertson

Position: Brazilian Butterfly franchise development manager

Founded: 2002

Number of outlets: 20 salons (15 franchisees)

Annual turnover: $9.1 million

Headquarters: Melbourne

Growth targets: Another four salons this financial year and 10% sales increase like-for-like salons

“We are a specialised chain of waxing salons with our core offer being Brazilian waxing. We offer all types of hair removal, including a permanent hair reduction system and spray tanning.  We are a business where you have to have a passion for people, you need to be able to follow a basic system and be prepared to get in there and make it happen. We have our own training programme for our staff and what sets us apart is that we focus on what we do best. We are not trying to be a beauty offer – our theme is total body care. Our franchisee training is entirely based around how to open a Brazilian Butterfly and make it successful for you.