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TOP FRANCHISE CHOICES FOR 2010

by Tony Maddock, General Manager,Franchise Selection.

Myself and the team at Australia’s largest franchisee recruiting company, Franchise Selection, have put our heads together and come up with our top five choices for franchise buyers this year. They are, in no particular order: AllSafe Energy Efficient Products; Coffee Club; Exclusive Collectables model cars; Crust Gourmet Pizza; and Matchbox homewares.

We see a buoyant 2010 economy boosting franchising across-the-board and believe these five franchisors are ready to take full advantage of increased consumer spending during the year.

We’re expecting strong short, medium and long term growth from the five franchisors we have named.

They all have excellent product and administrations/administrators, they all have first-rate marketing and development strategies, they all have proven track-records and they are all planning new outlets.
So we would recommend all of these franchisors to potential franchise buyers.

The food franchises on the list, - Crust gourmet pizza and Coffee Club provide great buying quality.

Crust franchise outlets specialise in delivered or take-away gourmet pizzas which are equal to, or better than, restaurant quality.

Crust currently has nearly 40 stores along the east coast of Australia. Its success can be seen by its growth figures which show that the number of outlets in New South Wales and Victoria jumped from 19 to 37 during 2009.

It is an extremely well-managed franchise - and obviously it has developed a very popular product.

Western Australia will strongly feature in Crust operations this year. Subiaco will host the company’s first Perth outlet and once the supply chain and operating conditions of the Perth market are ‘live’ tested franchised outlets will be released.

Potential food franchise buyers should make certain they check out coffee and food franchisors Coffee Club - which is one of the great success stories of independent food store franchising in Australia.

The Coffee Club franchise has been, is, and will continue to be highly successful. The company is highly energetic, forward-thinking and has great administration, marketing, systems and strategies.

There are now over 240 Coffee Club outlets across Australia selling high-quality coffee and food and the company is set to expand further this year.

Coffee Club’s growth is somewhat limited by the selection of A-grade locations. The company will not franchise without site selection criteria being met.

This can be frustrating for an applicant but the selection process means better performance in a new outlet.

Moving away from food franchises, Exclusive Collectables model cars are a fast-rising franchisor with a great short, medium and long-term future.

Exclusive Collectables manufactures, distributes and retails die cast model cars, sports figures statues and collectables publications among many other items.

This NSW-based franchisor produces high-quality, well –priced model cars which are incredibly popular with sporting enthusiasts-and there are a lot of them.

The company which began in 1996 is on the move. It is expanding sensibly and strategically across the country. Its product is excellent along with its internal systems and growth strategies.

With the development of the group, the buying power and brand presence will ensure a strong, enjoyable business for any franchisee.

The team at Franchise Selection is equally enthusiastic about the Matchbox homewares and kitchen accessories franchise.

Matchbox has 19 stores in Victoria, Queensland and Western Australia. It has detailed expansion plans to increase its outlets in those states and right across the country.

Its outlets sell cooking wares associated with the kitchen including baking wares, glass wares, table wares, appliances, knives and a myriad of other items.

It is taking full advantage of the world-wide television fad for cooking shows. A franchisee will typically be a passionate ‘cooking nut’.

Finally, we see great things ahead for the Brisbane–based All Safe Energy Efficient Products franchise.

All Safe has placed itself very well in supplying goods for the dramatic change to environmentally – safe housing.

It sells insulation, ventilation, solar power systems and solar gas and hot water systems.

These sorts of products have massive potential sales in an increasingly environmentally-concerned Australia.

The company is looking at cross-country expansion and it has relatively low investment rates for new franchisees.

It has an ease of operation that fits neatly with its systems and a local All Safe franchise quickly becomes the knowledge hub for consumers and trades people.

This is an emerging industry that will grow and grow for years. It is well placed to meet the changing needs of the customer and regulatory requirements. It is truly a new industry opportunity.

Summing up, we believe the top five franchises we have selected offer some of the best buying value and potential short, medium and long-term returns on investment that will be available in the franchise marketplace this year.

Tony Maddock is the General Manager of Franchise Selection. Suite 201, Level 2, 566 St Kilda Road, Melbourne, Vic 3004. Phone: 1300 FRANCHISE (372 624). Web: www.franchiseselection.com.au.

DO YOU REALLY WANT TO DO IT?

by Richard Evans, author, The Australian Franchising Handbook, and partner, Conroy, Llewellyn & Evans.
So you have the cash and you want to be your own boss but have little idea as to what to do next. The pitfalls are many and the success rate can be challenging but the rewards in running your own business can add value to your family and even more so to you as a person.
Business is damn hard. There are competitors everywhere and the fickle consumer can drive you nuts as you go about earning a dollar. But if being your own boss is your absolute desire and you are convinced this is the life for you, then there are some very basic rules to follow before your money is lost and your dignity destroyed. Don’t get me wrong! A small business can grow to be a large business and provide you the lifestyle rewards and inner glow of accomplishment that many before you have enjoyed. You can enjoy the rich rewards of being your own boss but follow the prescribed and indeed covert rules of success before you start and save yourself the heartache so many other dreamers like you may have endured.
Why do it?
The very first question you must ask yourself is – why? Why do you want to give up your current job, where everything is provided for you by your employer, and become the employer where you have to provide everything? Sure a franchisor will help with many operational aspects of your business but it will be you who needs to cover staff when they call in sick; you who needs to provide the coffee and cake and deal with staff and customer tantrums and tears; you who is responsible for locking up the site; you who needs to do the books; you who will be required to do the marketing, accounting, pay and penalty rates, occupational and heath laws, the costs of doing business, the lack of cash flow; and you who will need to be across just about everything associated with your business plus still provide the fees to your franchisor.
This is not an employer/employee relationship you are about to enter. You are about to buy a license via a franchise agreement to run your own business. If it fails or succeeds it will be your fault. So understanding why you want to go into business is very important and you must clearly understand why, and your family must be fully supportive of your decision – otherwise, forget it!. Don’t waste your time or money if you think you can invest in a franchise and not work the operation. The failure rate is extreme from cash-rich, lazy people who thought they could buy a brand and have others work it for them.
What type of franchise?
Once you work out why, try and decide what type of franchise is best for you and your lifestyle. Do you want: a home-based business?, a retail location with its 7 day a week demands?, a take away food place or a restaurant?; a service provider?, or, indeed a home services operation like a dog washer or a lawn mower? Australian franchising has an enormous range of quality brands whatever you consider to be the right fit for you there will be a franchise available.
Which franchisor?
Once you have selected the category you wish to invest into, the next decision to make is about the franchisor. What level of establishment are they in? The more mature the system the more investment capital is needed but there is less operational risk and greater support. The younger the brand, the less support structure, the greater risk of failure and loss, but the potential rewards from an emerging brand can be very big if you are keen to invest with an eye to re-sell.

LEASES TIPS & TRAPS FOR FRANCHISEES

By Raynia Theodore, Mason Sier Turnbull Lawyers

Many franchised businesses are conducted from premises that are leased, with either the franchisor or franchisee required to sign a lease to obtain the right to occupy the premises.
It is important to remember there is no such thing as a “standard lease”. Lease terms, especially the commercial terms, are negotiable and to a certain extent, the non-commercial terms are also negotiable, especially for premises that are not located in shopping centres.
Where premises are located in shopping centres, usually the terms of the lease are not easily changed. However, in the current economic climate, we have found that shopping centre landlords
have become more amenable to making changes to their leases.
Once you have decided to purchase a franchised business that is to operate from fixed premises, the main questions that should be asked are: ‘Who will find the premises?’ and ‘Who will hold the lease for the premises?’ The decisions are usually made by the franchisor with little or no input from the franchisee, especially where the franchised business being purchased is an existing business with a lease already in place.
Even with new or “greenfield” franchises, franchisors generally wish to control the site selection process. In such a case you should quiz the franchisor about its site selection process and the factors taken into
account in selecting the particular premises.