Franchise News – Issue 1#4
This article appeared in Issue 1#4 (May/June 2007) of Business Franchise Australia & New Zealand
Hudson’s Coffee: Australia’s Coffee Company
Hudsons Coffee is proudly Australian owned, providing the connoisseur with premium quality coffee served efficiently in a modern environment.
Business Franchise apologises for misrepresenting Hudsons Coffee in their March/April 2007 issue which indicated that they were an American owned company.
Two Aussies, Ros Turner and Mark Hawthorne, started Hudsons Coffee in 1998 in Elizabeth Street, Melbourne. After seeing the success of coffee houses internationally they brought the idea home and formulated a blend, and concept, that met the needs of the Australian coffee drinking population.
The stores serve a range of coffee, chocolate, tea and cold drinks and their coffee is blended from a combination of the finest Arabica beans from across the world, freshly roasted in Melbourne and delivered to their stores two or three times a week.
There are now 38 stores throughout Australia and Hudsons Coffee has grown to be one of the most reputable coffee houses in Australia.
Aussie Cleaning Success in China
Not only is AMC Commercial Cleaning Pty Ltd, the fastest growing franchises in Australia (BRW), it recently celebrated success in China with its 2000th employee.
AMC Commercial Cleaning (China) is a joint venture which is operating commercial cleaning franchises and patient services assistants in Beijing, Dong Guan and Xiamen hospitals. It is the first Australian company to do so.
AMC CEO, Stephen Coade says, “China takes a lot of time, effort and money and helps if you have a joint venture partner. It’s all about building relationships and bringing our world’s best cleaning practices and work ethic to them.” AMC has 220 commercial cleaning franchises in Australia.
Bakers Delight opens in USA
Bakers Delight is expanding into the American market just as they celebrate the opening of their 700th store.
The first American stores are located in Seattle and come after successful penetration of the Canadian Market where they are trading under the COBS Bread brand.
“Overseas expansion is an important long-term business plan, and the American market offers a lucrative opportunity to tap into a potential customer base of 300 million people,” said joint CEO Lesley Gillespie.
Bakers Delight currently has 38 stores in Canada and 35 stores in New Zealand. Their overseas expansion is running parallel with their expansion into South Australia and Victoria.
Global sales turnover of Bakers Delight / COBS Bread is expected to reach $512 million for the 2007 financial year. The company currently has a 14.6 percent share of a $2.42 billion bread market in Australia. They are currently experiencing double-digit growth across all regions and finding further opportunities for local expansion.
Bark Busters Get Balls
Danny and Sylvia Wilson have taken their dog training franchise, Bark Busters, around the world and are now helping other businesses to franchise with their new venture Big Balls Franchise Consultants.
Bark Busters was listed number five hottest Australian franchise in the January 2007 edition of BRW and named the top-ranking pet franchise in America by Entrepreneur Magazine in 2007.
The company started in Wollongong in 1989 and spread to the US in 2000. There are now nearly 300 franchises in eight countries and Bark Busters is expanding across Europe with negotiations underway in Denmark, France and Spain. They are using Taiwan, where they established franchises a year ago, as a test market for their Chinese expansion planned for 2008.
Not content with their own success, Danny and Sylvia have now established Big Balls to help other businesses in Australia and around the world to achieve franchising success. According to Danny, they have the credibility and they enjoy helping others.
Franchise Funding Founded
The recent Sydney Franchise Show saw the launching of Franchise Funding Australia, a specialist finance brokerage set up to assist in the financing of franchise purchases. Franchise Funding Australia has been launched by John Evans and Martin Huisman of the Mortgage Wisdom Group. John Evans says “We have been assisting clients with franchise purchases and business loans for several years. Launching Franchise Funding Australia has filled a long standing gap between the franchise sellers and the funders.”
Normally when a potential purchaser wants to buy a Franchise they are told to go and arrange their own finance. Unless they are lucky or look very good on paper they are usually rejected. The aim of Franchise Funding Australia is to match each applicant with the best funding that they qualify for.
Disclosure Rules Change
The Australia government has accepted 31 recommended changes to the disclosures section of the Franchising Code of Conduct.
“These reforms are about empowering people to make the right business decisions. It will reduce the risks for franchisees by requiring greater disclosure, and will help build the long term sustainability of the industry,” said minister for small business, Fran Bailey.
“For example, if you were interested in purchasing a franchise, you will now be able to contact a previous franchisee subject to their agreement and ask about the franchisor.”
The recommendations include the provision of audit reports of franchise marketing funds to franchisees and a requirement for franchisors to report a material change in the circumstances of the franchise to franchisees within 14 days.
The Franchise Council of Australia believes the changes are likely to be well received by the franchise sector and the additional compliance costs for franchise systems should be relatively modest provided the actual legislation reflects the policy intent.
Commander’s 360 Degree Success
Commander Communications has achieved over 50% growth in revenue in the first half of the 2007 financial year with its Commander Centre franchises making a significant contribution.
According to managing director, Adrian Coote, “FY07 is a year of transformation for Commander.” The acquisition and integration of Volante and the rollout of franchises across regional Australia have underpinned their success in achieving revenues of $506 million.
The growth is part of Commanders vision for providing 360 degree communication solutions to small and medium businesses. The franchises have demonstrated business line efficiencies, selling voice equipment and network services as well as ICT hardware and services.
Each centre is fully branded and receives a full range of support services. The ability for franchisees to provide highly personalised service and support has generated early positive feedback from a growing customer base in each territory.
Leaders in Social Responsibility
The 2006 Global Corporate Social Responsibility study has named Goodyear as the tyre manufacturer with the highest consumer goodwill in Asia and the Americas.
The annual study, conducted by international automotive research company TNS, revealed that companies that rate highly on safety and environment are generally perceived as the most trustworthy. Over 18,000 consumers from 18 countries worldwide were asked to rate corporations from the passenger car, commercial vehicle, tire and oil sectors.
Consumers are prepared to vote with their wallet with eight out of ten indicating that they would refrain from purchasing from corporations that fail to follow environmentally friendly or ethical business practices.
Goodyear has just launched the Goodyear Eagle LS2000, an environmentally-friendly tyre which incorporates BioTRED compounding technology that permits the partial replacement of carbon black and silica by a new starch-based filler material made from corn starch. Goodyear also actively educate motorists on tyre safety and maintenance and are continuously seeking responsible ways of dealing with used tyres.
Record Sales for Retail Group
The strong performance of the Donut King and bb’s café franchises has led to a 34% jump in net profit after tax for Retail Food Group Limited.
Earnings before interest and taxes for the six months up to 31 December 2006 were $6.3 million and were largely generated from record sales and total franchise revenue.
“The 2007 half year results fortify both the strength of the company’s franchise model and the retail integrity of our Donut King and bb’s café systems,” said Retail Food Group CEO Mr Tony Alford. “As well, we are encouraged by the penetration and cut through of our in-store promotions and support network provided to our 350 franchises.”
As at 31 December 2007, the company had achieved 18 new Donut King outlets and six new bb’s café outlets. There are 280 Donut King outlets operating in Australia and 70 bb’s café outlets in Australia and New Zealand.
What’s the Buzz with Muzz Buzz?
One of the hottest new franchises around Australia is drive thru coffee, and the clear market leader is Muzz Buzz. It seems there’s no stopping the expansion of these distinctive green and purple oval shaped drive thru outlets, which are popping up all over Australia.
The man leading the green and purple charge is Warren Reynolds, an aerobatic pilot who gets his buzz from flying aircraft 3 metres above the ground at 400 kph.
“In business as in aerobatics, timing is everything. Muzz Buzz came along at a time when more traditional retail franchises are repositioning and reinventing themselves and that has created gaps for niche retailers like Muzz Buzz to establish themselves. We looked at what was happening in the US, where drive thru is king, and saw that it was inevitable that it would take off here.”
Reynolds says that from humble beginnings in Perth, Muzz Buzz is now set to expand across Australia and possibly even overseas.
“Our first goal was to build up our business in WA to support a strategic move into the east. We’ve moved our head office and corporate functions to Melbourne to support the anticipated further growth in Victoria, New South Wales, South Australia and Queensland. Next month we open our first two stores in Adelaide in Kilkenny and Nailsworth and I hope we will be opening another three stores not long after. We’ve even had offers to take the brand into Europe, South Africa, North America and Asia, but for now we are focused on Australia.
As you can imagine, it’s a pretty hectic time which places a lot of pressure on our small management team. Our team is one of the most professional groups I have ever had the pleasure to work with and they support our franchisees exceptionally well. The technical support services within the company covering property, construction, training and marketing has been well structured and support our new franchisees on a very professional level.
Franchisees deserve professional support to maximize their return on investment and we welcome enquiries from dynamic people who are interested in becoming Muzz Buzz franchisees and becoming part of one of the fastest growing fast food sectors in the world.
Entrepreneur Award for Senior Care Franchisor
The International Franchise Association has named Paul Hogan, founder and CEO of Home Instead Senior Care, as Entrepreneur of the Year 2007. Hogan started Home Instead in the USA in 1994 and now has over 700 franchises in 11 countries including five in Australia.
According to Australia’s master franchisee, Martin Warner, “Each day, offices like ours throughout this country and the world carry out the mission of Home Instead Senior Care by helping keep seniors independent and safe in their homes, providing services such as companionship, personal care, meal preparation, light housekeeping, medication reminders, errands and shopping.”
“The foundation of franchising is built upon the visions of leaders like Paul Hogan,” said International Franchise Association President, Matthew Shay. “Paul’s ability to create a concept that not only meets the important needs of today’s growing population of seniors, but offers small-business opportunities for future generations, is evidence of his unique entrepreneurial talents.”
Fitness Together Comes to Australia
Fitness Together and elements therapeutic massage will be selling franchises in Australia this year.
Both franchise models are part of Fitness Together Holdings and the company will be seeking master franchisees and single unit franchisees in the third quarter of 2007.
310 Fitness Together studies are open across the USA, Canada, Israel and Ireland with over one hundred more sold. The profile of the group is rising rapidly and they were ranked #77 in the January 2007 Entrepreneur Magazine annual franchise listing.
The Fitness Together philosophy is “1 client – 1 trainer – 1 goal”.
They offer personalized fitness training for men and women ranging from fifteen to eighty years of age. In the privacy of individual suites, clients work with their own personal trainer to achieve mutually established fitness goals.
Elements therapeutic massage franchises offer a range of massage experiences including Swedish, deep tissue, sports, prenatal and hot stone massage. By the end of 2007, over 40 locations will be open across the USA.
Waterless Car Washing Creates an Oustanding Franchise Opportunity
With water restrictions being enforced around Australia, car owners are considering smarter ways to keep their cars clean and help Australia’s thirsty climate. As a result, two young petrol heads have seized on an outstanding business opportunity with a waterless car washing franchise.
Jim Cornish and Stewart Nicholls, both former race and rally drivers, established Ecowash Mobile in March 2004 as a completely waterless mobile car washing and detailing service.
“With water restrictions in place, people are looking at different ways of washing their cars. The convenience and quality of our service as well as being eco-friendly and waterless are great advantages,” Nicholls said.
For example, car owners in Sydney, Melbourne and Brisbane are currently restricted to using watering cans or buckets to wash their cars.
Ecowash Mobile now has 32 franchisees operating 41 mobile units all across Australia washing around seven cars a day which equates to a saving of about 258,300 litres of water a week*. The business has also taken off overseas with franchises established in Saudi Arabia, Bahrain and France.
“The business is successful because we offer a professional, convenient and high quality service. Being waterless opens the doors to opportunities that would not be there using traditional car washing methods,” Cornish said.
Ecowash Mobile was the winner of the 2006 Small Business Awards Champion of Champions (Automotive Services category). In March 2006, the franchise was also awarded the ‘Smart Approved Watermark’, the nation’s reference for choosing products, services and organisations that are reducing outdoor water use.
The exclusive Ecowash Mobile product range includes a biodegradable 2-in-1 wash and polish which is sprayed on to the car exterior. It encapsulates surface dirt that is then removed with a soft cloth, leaving behind a protective coating that lasts for four to six weeks.
The complete range of products enables a full detail inside and out including leather treatment, bumper renovation and scratch removal. To ensure long lasting protection of your car, Ecowash Mobile has also just introduced new protection options for paint, fabric and carpet or leather.
A variety of services are on offer, from a basic waterless wash and polish right through to a full detail, to suit individual car owners, car dealers, smash repairers and corporate fleets.
* The traditional hose method of washing a car uses 180 litres of water per wash (Sydney Water).
Seek: Your Own Business
Leading online employment service, SEEK, has launched a new website for individuals wishing to buy or sell their own business or franchise.
www.seekcommercial.com.au will operate independently from www.seek.com.au which will cross promote the new service to over two million browsers each month.
SEEK Commercial General Manager David Waite says, “SEEK Commercial is an exciting step into an expanding market for franchise and business classifieds. Our vision is to replicate SEEK’s success in the employment market by catering to the significant numbers of Australians who want to be their own boss, or who have built a business that they wish to sell.”
A recent survey conducted by SEEK revealed that 82% of jobseekers are interested in owning their own business at some stage in their career.
“We already deliver access to Australia’s largest marketplace of passive and active individuals looking for new opportunities, and bringing business owners and business buyers together is a natural next step,” said Waite.
Photographic Group Grow
Australia’s leading photography franchise group “Little Images” has recently added two new franchisees to their group and is heading towards the enviable position of offering Australia wide service to their customers. The Brisbane based Little Images group specialise in photographing children and families in Schools and Day Care centres throughout Australia. Franchisees work from home and service the local community, becoming the “local” photographer.
This we have had already had the addition of two new franchisees which has seen a move to the regional centres, with both these new franchisees servicing country areas in Victoria and New South Wales. Franchisors Leigh and Cherie Farley, claim that regional centres can provide just as much opportunity as the tradition city markets since country folk are very supportive of local business.
Little Images franchisees come from all different walks of life and for most are entering the industry for the very first time. Franchisees range in age from late twenties to late fifties. Most of all franchisees enjoy a high level of support and comradeship between franchisees.
Future growth plans for the Little Images group include more representation in the Melbourne market and two new franchisees in South Australia. Franchisees can join the system minimal outlay and become a professional photographer making an income out of some thing they love doing.
Snap-On Scraps ‘FAC’
The Franchise Council of Australia strongly recommends that member franchisors establish a Franchise Advisory Council, providing franchisees with ‘voice’ and a fair degree of latent clout. Almost all systems with more than a dozen franchisees have one.
The Franchise Advisory Council usually has strong status within the system. While franchisors have final say, ‘FACs’ are a means of bringing franchisee concerns to the table in a disciplined way, rather than via emotional phone calls and desperate emails, and help to put dampeners on any rising dispute. Franchisors deaf to FAC recommendations usually regret it – FACs might not have control, but they certainly have weight.
Snap-on Tools has just folded its ‘FAC’ due to lack of franchisee interest. When the issue was raised at its recent national convention and not a single franchisee volunteered to participate in the year ahead. It was regarded by franchisees as a waste of time.
This perplexed the franchisor. ‘Best practice’ says there should be a FAC but what happens when franchisees decline to have one? If franchisees will not put up their hands, you can’t have one. So what do you do, that is best practice, when they’re content?
In a moment of inspiration, Snap-on asked selected franchisees if they would be okay with being part of a ‘Franchise Development Group’.
That made all the difference. The point is that franchisees saw a FAC as a forum for complaint and given a lack of dissent, why have it? But turn it around – invite franchisees into an inner circle where the decisions are made, because the franchisor wants their input, and a boring negative becomes a shining positive. There were was plenty of enthusiasm by the Snap-on franchisees prepared to be part of a Franchise Development Group, which is now established as a kind of ‘think tank’.
The Franchise Relationships Institute’s MD Greg Nathan – the sector’s guru in franchisor-franchisee interaction – says that this is not unusual for systems in balance.
“Actually you can call the franchisee-representative forum whatever you like,” he says, “A Franchise Development Group will deal with pretty much the same issues as a FAC, including any dissent that might arise, but words and approach can do make a difference to expectations and outcomes. In many cases, what you find is that these bodies start out dealing mostly with resolving complaints but evolve into groups working on strategy, better service, better products and so on. That is best practice.”
Snap-on’s Franchise Development Manager Nick Hudson says the system will reintroduce a Franchise Advisory Council as soon as anyone wants one. However the Franchise Development team will be a permanent fixture.
Nick says system harmony has a lot to do with Aust/NZ CEO MD Barry Barrie Young’s recent promotion to President of Sales and Franchising for the Snap-on Tools Company in North America USA & Canada – a US$1.3 billion operation and the first time a non-American has held a Presidential position within the Snap-on network.