Building your franchise

Darren Wallis, CEO, G.J. Gardner Homes

In 2005, after working for more than a decade at one of Australia and New Zealand’s most successful home building companies – G.J. Gardner Homes – I packed my suitcase and left the southern hemisphere with a plan to grow the company in the United States.

With limited contacts, network or map, I arrived solo in America to meet the one master franchisee we had organised from Australia to help grow our business. This experience was one of the most challenging and rewarding times of my career.

Since that day, the business has seen unprecedented growth in franchises and franchise areas in the United States, despite the nation-wide decline in the United States homebuilding industry and the 2008 global financial crisis. You might not know it from G.J. Gardner Homes’ strong position in the United States today, but the GFC was just one of many challenges I faced in growing my company on an international scale – it was much tougher than I first expected.

Today, my company’s profits in the United States alone exceeded $6 million in FY2011—a 25 per cent increase to gross revenue. The franchise’s rapid growth means we now have 16 franchise locations in California, eight in Colorado and two in Texas, proving that the unique franchise model that has been so successful in Australia and New Zealand is just as successful in the United States. My plans for continued expansion of the G.J. Gardner Homes franchise are firm, with projections of between 300 and 400 active G.J. Gardner Homes stores over the next 10 years. But that’s not to say it has always been smooth sailing. While my business growth plans for the United States have been successful, my first attempts at expanding internationally did not go as planned and I have learnt many lessons along the way.

In 2006 and 2007, we attempted to expand in Germany and South Africa with dismal results. Naivety of the language barriers and different business ethics were the biggest issues we encountered.

Eventually the challenges that we as a company faced were too large and unfortunately, as CEO of the company, I did not have the critical experience or knowledge of international expansion to overcome these challenges. Alas, the lessons learnt from these business ventures are part of what makes our franchise as strong as it is today. Through trial and error, I was able to resurrect a resilient methodology before expanding to America. And although it was still a risk, following simple rules meant I could confidently take my business to the United States without fear of failure.

International franchising opportunities exist across many markets and industries and franchising is almost universally accepted as a sound way of doing business. If executed correctly, international expansion can be great for your brand, domestically as well as globally. That said, before expanding a franchise overseas, there is a lot business owners need to consider. The best advice I can offer is to make sure your franchise and company is ready to expand internationally. Do your research and familiarise yourself with your target areas, be on the ground to set it up so it’s done right from the start, and employ the right people who will ultimately be responsible for the success of your franchise.

Are you ready?

Asking yourself whether your business is ready and capable to expand internationally is the first thing you should do before taking the plunge into the global market. If you are experiencing difficulties with your business domestically, then expanding internationally is not a good idea.

You must ensure you have a solid franchise network with the tools, support, training and processes in place that can be transferred overseas. International expansion is a lot of work and can be expensive. It’s important that you are 100 per cent confident that you and your company are ready to take this big step in franchising.

Do you have a strong franchise model?

Having a strong franchise model is crucial to successfully expanding your franchise overseas. Although the product or service you deliver are also important, an unbreakable business model, a clear strategy and a growth plan are the backbone of the business that will help your franchise become successful on a global scale.

Research, research, research!

Once you have decided on the country or countries that you want to expand to, you need to do your research and consider the many different factors that could have an impact on your business.

It is important to have a thorough understanding of the political climate, economic state, competitive environment, industry-leaders, potential suppliers, relevant legislation and any cultural issues or language barriers. All of these aspects could have enormous impacts on your
franchise and must be considered in the decisionmaking process.

Understanding the areas, state, town or city that you are looking to expand into is a very good move because your understanding of local issues will go a long way.

Be there to set it up

Being on the ground to set up your franchise in a foreign country is invaluable. By developing relationships with stakeholders and talking to the right people, you get a first-hand look at the environment in which your franchisees will be operating.

Taking the time to set up meetings and personally recruit the staff who will be leading your franchise from abroad will help build a strong structure that is supported by your existing business model. To be successful in a new country, learning the local and colloquial language can be critical to communicate effectively with potential business partners. Even if you speak the same language, there is a risk that people will still not understand you. Talk the way the locals do so that you can present business propositions in a way that is clear and concise.

Hire the right people

Having the right franchisees and master franchisees brings local knowledge and a strong understanding of who your customers are. This intelligence is priceless and can help deliver tangible results fast. Local knowledge and a familiar face could be key to your franchise and
your franchisee’s growth.

The right person will know your particular market, the industry and your competitors, as well as being in tune with the local community’s and stakeholder needs.

Following these simple steps and being informed before taking the plunge and expanding internationally could mean the difference between success and failure.

And if you do decide to expand, and you do it well, my experience shows it can be the best move you’ll ever make. American builders have warmly welcomed the franchise opportunities with G.J. Gardner Homes, recognising the benefits of being a part of a stable, supported and secure business that has a safety net of other experienced builders within reach. Whether I’m in Australia, New Zealand or the United States, I am always grateful for the strong team of franchisees who operate the G.J. Gardner Homes business, making it the
successful and growing home building company it is today.

G.J. Gardner Homes CEO, Darren Wallis, has spent the past year taking his company from good to great, expanding in the United States, raising significantly increased revenue, implementing an improved business model and winning several awards – not to mention the
birth of his first daughter to add to his family of four boys.

At the age of 40, Wallis is one of Australia’s leading young entrepreneurs with an impressive track record for innovation, global success and an eye for the next big thing in franchising.

Wallis has worked at G.J. Gardner Homes for the past 18 years, 11 of which as the CEO. Since taking on the top job, the group has grown from 20 offices in Australia to more than 110 in Australia, New Zealand and the United States.

For more information contact:
Angela Jessup, Account Executive

Phone: 03 9642 4107