Modern Franchise Magazine February. 2012

® M A G A Z I N E February 2012 What the Most Franchise Growth in 2012. Successful Franchisees This Time It’s Have In Common Different! maxiom maxiom

What’s in this month’s Magazine? Regular Features Page 4: Welcome Page 8: Franchise Focus Page 28: Modern Franchise 6 Special Features Page 6: What do the Most Successful Franchisees Have in Common? Page 16: Recruiting From Within - Multi-Unit Franchising 20 Page 20: Franchise Growth in 2012. This Time it’s Different. Page 24: The All-Important Features Top Franchises Possess Page 34: 5 Secrets to Effective Franchise Websites Page 58: Understand Why People Buy 28 Franchises and You’ll Attract more Franchisees maxiom

® M A G A Z I N E 30 Profiles Page 10: Maxiom Jobs Page 28: MPH Page 42: Fair Work Ombudsman’s National 18 Franchise Program Articles Page 10: Getting Your Business Ready to Franchise Page 14: Does the Franchise Sector Need an Overhaul? Page 18: Are You Confused - New WHS Standards? 62 Page 30: 5 Ways to Motivate Franchise Staff? Page 34: Warning Signs When Buying a Franchise Page 38: Franchising is Still a Great Way to do Business 08 Page 60: Taking Over an Existing Franchise maxiom

The Modern Franchise with Mark Matthews Welcome to the February 2012 Issue of Modern Franchise Magazine. 2012 is shaping up as a year of transition for many industries as more sectors adapt to the changing business environment. Franchising is no exception. We look at some of the factors that will effect the industry and some of the lessons from the past. The franchise sector has been Staff Management & Careers Features hoping for a revival in 2012. There have been many If marketing is what drives franchise In “franchise focus” we talk to me predictions of a boom year for success, your staff are the key to about our new Maxiom Jobs service franchising, but this time will it delivering the results. and why EVERY business just can’t be any different (page 20)? survive without us! We look at ways of motivating and There is plenty of rhetoric being getting the best performance from Michael Polo Homes are growing thrown around about franchising franchise staff and how to find the their business through franchising. and what needs to be done to boost best staff for your franchise. We take another look into why this the sector. So we ask Does the strategy is succeeding for them in Franchise Sector Need an Looking for a franchise? “Modern Franchise”. Overhaul? There are some great tips to find Mark Fernandez from BDA talks Despite all the commentary, the out if a franchise business is right about multi-unit franchising and franchise sector is still for you, taking over an existing recruiting from within. outperforming most and franchises franchise and the warning signs to in general are more profitable and look out for when buying a We also look into the all-important successful than similar non- franchise. features that top franchises posses, franchised businesses. In Why plus much more…. Franchising Is Still a Great Way Franchise Management to Do Business We Look into the There are also a number a really Reasons Behind This. The Fair Work Ombudsman has great franchise opportunities released a National Franchise advertised! Program, but will the industry be Sales & Marketing interested? Siimon Reynolds is also holding If any one factor was more iimportant Strategic Entrepreneur events to business success than all others Joanne Solis walks us through the around the country. Be sure to it’s marketing. It’s something every harmonised WHS legislation download his new ebook “How to business has to be expert in. So we amongst all the confusion regarding Attract New Customers Quickly talk about The Sales And Marketing non-harmonised states and who, and Easily” from page 15. It’s Skills You Will Need As A how and when you should comply. absolutely free plus if you’re quick Franchisee. you can also get your hands on some discounted tickets to this There is also another great article by event which anyone in business will Chris Anderson - 5 Secrets to not want to miss. Successful Franchise Websites and Enjoy the magazine. All feedback is Kristn McNicol discusses Why Your Employment Brand Is So Important. appreciated. Visit our website at: www.maxiom.com.au 4 | Modern Franchise Magazine maxiom

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WHAT DO THE MOST SUCCESSFUL FRANCHISEES HAVE IN COMMON? Buying a Franchise and taking advantage of all that franchising has to offer can give you an opportunity to be self employed and gain some control over your career. By Daren Coudriet If you have never been a all do. If you have great people work, especially at first, the business owner, you’re probably skills, you are definitely getting better chance you have of wondering if you have what it into the right business. becoming the owner of a takes. successful franchise. You will probably find that you will While it is commonly known that be able to publicise your A commonly acknowledged fact franchising offers opportunities business and build loyalty with in the business world is that to people with all kinds of skill your customers easier if you franchises are statistically much sets and backgrounds, there are choose to reach out. more likely to become successful definitely a few attributes that a than an individual start-up. lot of the most successful They Have Determination. franchises have in common. In part, this is likely because For a franchise to have a chance many of the \"pieces of the They Know How To Network at becoming successful, the business puzzle\" have already First of all, make sure you know owner needs to be prepared to been put together for the that when you choose a location do whatever it takes to achieve business owner buying the for your franchise, you are also that goal. franchise. choosing your professional community. Especially at the beginning, Many mistakes that may have owning a franchise is not relaxing been made in starting a If you have great networking 5 days a week. If you want that business from scratch are skills, you can thrive in a good dream to happen, it starts with an avoided because of the nature of business community. Get to intense amount of real, hard a franchised business. know your neighbours and other work. Getting squeamish yet? business owners in your location. Additionally, the owners of the Look into joining local community No? Read on. Building your most successful franchises have and business organizations like customer base, training the chance to carefully pick their the local chamber of commerce. employees and understanding franchise and can review and get your own learning curve is going comfortable with their business This is a critical part in to take some time, and you must strategy before they start the connecting with other business be determined to stick it out. business. owners, and it's something that the most successful franchises The more willing you are as a person to put in the necessary 6 | Modern Franchise Magazine maxiom

THE “MUST READ” MAGAZINE FOR ALL BUSINESS LEADERS & ENTREPRENEURS MODERN BUSINESS Even with these bright statistics Also, many franchisors will have on your side, you can't be a training you can provide your person who shirks from hard staff, which helps you to transfer MAGAZINE work, because buying a this same knowledge. franchise doesn't mean it is going to be easy. If you are unable, unwilling or uncomfortable executing They Can Learn AND Lead someone else's system, you are probably much better off starting Another key to being a the your own business than entering owner of one of the most into franchising. successful franchises, considering the initial learning So do you think you've got what curve of getting the business it takes to be one of the most started, is the ability to both give successful franchises? and take direction. Buying a franchise is not a The entire point of franchising is substitute for these basic that the customer gets the same elements of success. great service and/or product from your franchise and all the If you're able to follow a proven franchisees by following a system, have a great set of proven system. leadership skills, can network CLICK HERE like a monster and have the So, you will need to learn the determination to do whatever it systems and processes that takes, then you may just have have made the other franchisees what it takes to take control of TO GET YOUR successful, as well as lead your destiny and achieve your others as you hire staff. dreams through franchising. FREE COPY DELIVERED This could be challenging at Daren Coudriet is a business and times, but keep in mind learning technology consultant focused on DIRECT TO YOUR a system can be much easier helping prospective franchisees than trying to create one from find the right franchise for them. INBOX EVERY scratch. MONTH maxiom Modern Franchise Magazine | 7

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GETTING YOUR BUSINESS READY TO FRANCHISE Quite a lot of well established businesses are faced with the issue of how to develop their business further than its current potential. By Jaz Campbell Franchising is often considered One of the disadvantages, could Not all business owners are as a recognised method of be the income potential. Since suited to become franchisors. expanding your business without you do not own the additional having to take on the immediate units, the potential revenue you Contacting a reputable and running costs of operating extra receive as a franchisor is mostly professional franchise consultant business owned outlets. a small portion of total earnings, is a good place to start when typically known as a deciding if you should franchise Basically, it comes down to a few Management Fee, Royalty or your business. Contact several, of things if it's an appropriate Franchise Service Fee. The total get their advice and then decide road for your business to take. turnover from the franchise isn't which one you will choose. The benefit of making your yours to manage but rather you business into a franchise will take a cut for being the Once you’ve determined if your business is really the expansion controller of the franchise brand business should be franchised, potential it can offer. and supplying on-going support getting your business to the point and brand marketing. where it can be franchised takes A franchised business could time and there are considerable develop more rapidly than via You will need to make sure that costs involved. company owned expansion you are likely to be able to sell since it's not so reliant on finding enough franchises in order to These don’t just include company resources to fund every reach “critical mass”. This is preparing the legal additional business unit. Each when the number of franchises documentation and Franchise individual franchise operator is operating brings in enough Disclosure Documents. You will usually responsible for funding income for the franchisor to be need to document every process their operation and taking care of able to provide all the support in your business and have clear its overheads. services and marketing support easy to follow procedures for it needs to successfully operate every process and stage of the Another key consideration is the franchised business. business. In fact, if you haven’t whether or not the commercial already documented these formula you have (the business Not every business should be procedures then franchising may model) will actually translate well franchised. If the current not be for you. You will also need into a franchise. If the venture has business is very reliant on the a very strong marketing plan and a central set of principles and personal skills and abilities of the have developed a “brand”. Your systems which can be key individuals who are business must stand out and be documented, replicated and operating the company, then it is perceived as a (if not “the”) packaged then converting it to a perhaps harder to replicate. market leader. franchise could be a viable path Businesses that are seasonal or for you. are based on a fad should not be However, if you do have a well franchised. There is also a run and organised business This tends to facilitate a faster different management and model there are many development process. cultural approach required by advantages of turning your franchisors. business into a franchise. 10 | Modern Franchise Magazine maxiom

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DOES THE FRANCHISE SECTOR NEED AN OVERHAUL? Emotions are running high amongst the keenest supporters of the Franchise Council of Australia over the recent appointment of leading competition lawyer Frank Zumbo as the SA Deputy Small Business Commissioner. But is this just a reflection of another sector struggling with the changing business environment? In the past week we’ve seen Them” culture between The supporters of the South Franchise Council of Australia franchisors and franchisees? Australian Small Business chairman Steven Wright launch a Commissioner Office think this is scathing attack on newly In response to the conduct of the very thing that Mr Zumbo’s appointed Deputy Small South Australian based franchise appointment will provide. Business Commissioner Frank Refund Homes Loans (now in Zumbo bordering on the administration), ACCC Obviously not everyone agrees. extreme. Chairman Greame Samuels made the statement that What is obvious is that a single Leading SA based franchisor \"Franchisors and franchisees National approach to franchise Mark Langford, CEO of Game have a special business regulation is preferable. What is Traders has also launched an relationship. Franchisees trust also obvious is that the attack on Zumbo’s appointment, their franchisor to provide honest Franchise Code of Conduct, and Queensland based franchise and reliable information as to while generally good in consultant Jason Gehrke has their own business and about construction is lacking in been a strong voice in opposing franchising generally and to compliance incentives and the legislation. It should be noted mislead them in this manner is enforcement. that these opponents of Mr an abuse of trust.\" Zumbo and the legislation are With new Federal Small also FCA directors. Mr Langford It seems that the trust between Business Minister Mark Arbib is also listed on the FCA web the various stakeholders in the still in the process of “getting his site as SA State President. franchise sector is being head around the portfolio” it undermined by some petty seems unlikely we’ll see any Of course the franchisee groups industry politics and the parties developments on this front for a have the opposite opinion on the are moving further apart which while. SA legislation and appointment can’t be good for the industry as of Mr Zumbo. a whole. So where does that leave franchising? The FCA has also been Franchising in Australia is worth criticised as just representing the $130 billion annually, with over The sector is still outperforming big end of the franchising town. 70,000 franchisees and most others in our economy. employing over 600,000 Individual industries are generally So in mustering it’s troops Australians directly and many performing better than their non- around the country to attack the more indirectly. franchised counterparts, so why SA Deputy Small Business is the sector stagnating and Commissioner so hard is the The sector badly needs some divided? FCA risking creating an “Us v’s strong direction and leadership. 14 | Modern Franchise Magazine maxiom

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RECRUITING FROM WITHIN - MULTI-UNIT FRANCHISING The latest buzz word in franchise recruitment is ‘Multi-Unit Franchising’ but what does it really mean? By Mark Fernandez What are the benefits to the How hands on do I need The benefits can be rewarding franchise system and what to be in the operations? over the long run and with systems need to be in place? expansion also bring What people do I need to excitement!!! Over the past year the concept have in place to run of franchisees with more that multiple operations well? Once you have decided to take one franchise has become very on another store or location, popular. What expectations does your people become even more the Franchisor have of critical to your success. The old With the current economic multi-unit franchisees? saying ‘you can’t be in two climate causing banks to places at once’ becomes very maintain a tighter lending profile, What will be the impact on real and you need to trust in recruitment for new franchisees my current operations - your people even more and let has become very difficult. financial, resources go at times. A number of systems have Do I need to do any Multi-Unit franchising is the way reported that by looking retraining with the of the future as more and more internally and expanding Franchisor to ensure that I franchise systems move away franchisees from one outlet to remain current with the from tradition methods of two and even three to four, has franchise systems and recruitment. not only reduced the time taken procedures. to find franchisees, but have For more information on Multi stated that by knowing the What technology do I Unit Franchising, please person already involved in the need to have to enable business has made it easier to me to better manage the click here manage overall and has businesses reduced the risk. to contact Mark Fernandez, What have I learned from Director of Business However, if you are looking to other multi-unit Development Alliance expand and become a multi-unit franchisees in the franchisee here are some system? questions that you should consider: maxiom 16 | Modern Franchise Magazine maxiom

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ARE YOU CONFUSED? - THE NEW NATIONAL WHS (OH&S) STANDARDS Even though not all states have enacted the new harmonised WHS Laws businesses are urged to ensure they meet the new Standards. By Joanne Solis Despite concessions from the Though, as many requirements of Building-up Consulting’s advice Federal Government that grant the new WHS laws are equally to all clients is don't wait - ensure businesses up to 12 months to relevant to workplaces in non- you are prepared now, because implement the regulations if they harmonised States obligations of in many ways this is best practice create “new duties” for the new laws can be followed in so there's little downside. organisations, compliance with many situations without being in the harmonised WHS Laws may breach of the current laws in By now all franchises should have still be required (if not desirable). those states. undertaken a review of all their WHS practices, procedures, Victoria, Western Australia, It makes good business sense, manuals and policies. South Australia, and Tasmania where no conflict exists with the have now also committed to current laws, to move to the Franchises may need to adopting the new laws within 12 harmonised obligations. implement training to ensure that months. Until this time, each of all managers, franchisees and these States will use their own Another consideration is that employees are up to speed with existing legislation and guidance under the new WHS regime, a the changes and understand the business based in a non- materials. requirements placed upon them. harmonised state that contracts This doesn’t mean businesses in with and supplies goods or Special care should be taken these states do not need to services to a business in a when reviewing both franchise jurisdiction where the harmonised comply. and contractor arrangements WHS Laws are in effect may find under the new laws and their Companies that operate across itself subject to those Laws as a franchisee and contractor multiple states may still have to worker, designer, manufacturer, management systems, and make supplier or other capacity. maintain state relevant policies sure their staff are prepared for for non-harmonised states until So for example, if you are a the changes. the laws (with or without Victorian or West Australian amendments) are passed in Company directors and franchisor with interstate these states, while complying with managers must be aware of the franchises or customers, it makes the harmonised WHS Laws in all good sense to ensure you comply positive obligation on an officer of other jurisdictions. a company to exercise due now! diligence to ensure the company is discharging its safety obligation. maxiom 18 | Modern Franchise Magazine maxiom

SPECIALISTS IN WHS MANAGEMENT AND TRAINING WHS (OH&S) CONSULTANTS PROCDURE DEVELOPMENT & TRAINING RECRUITMENT OF WHS PERSONNEL WHS AUDITS CHANGE MANAEGEMENT SOLUTIONS MANUALS AND POLICIES maxiomaxiom m Modern Franchise Magazine | 19

FRANCHISING GROWTH IN 2012 - THIS TIME IS DIFFERENT? In 2010 Carmen M. Reinhart and Kenneth S. Rogoff wrote a book entitled \"This Time is Different: Eight Centuries of Financial Folly\". While this article is written with the US franchise market in mind it in many ways mirrors the Australian franchise sector since the Global Financial Crisis By W.C. Garth Snider Writing on the heels of the Global Almost two years after the Great In fact, the IFA has restated its Financial Crisis & Great Recession officially ended the numbers for the previous year's Recession the book's message franchise market writ large is still franchise unit growth in each of was a simple one: no matter how struggling to cope with the boom the last three years. For example, different the latest financial crisis that ended badly. the 2012 report said that the always appears, there are number of franchise remarkable similarities with past The International Franchise establishments in 2008 was experiences from other countries Association reported that 2012 774,000; the report in 2011 and from history. will be the year that franchising stated that the number of rebounds. Last month the IFA franchise establishments in 2008 We have been here before. released its Franchise Business was 791,000; and the 2009 Other nations and other leaders - Economic Outlook for 2012. In report claimed that the number in notwithstanding the hubris, or short it stated, \"after three years 2008 was 864,000). maybe because of the hubris- of restrained growth, due to the always think that this time is recession and its lingering But in light of This Time is different. effects, franchise businesses Different what struck me as show signs of recovery in the particularly interesting about this The vast range of crisis year ahead.\" The IFA went on to latest pronouncement from the considered and analyzed in This state that \"franchise business IFA was the statement by Time is Different demonstrates growth has been restrained over Stephen Caldeira, President of that excessive debt the past three years due to the IFA, in which he said in accumulation, whether it be by underlying factors, such as the referring to 2012 \"the rate of the government, banks, weak rebound in consumer growth is far below the growth corporations, or consumers, spending, that have been a drag trends we experienced before often poses greater risks than it on the economy as a whole. In the recession.\" Most individuals seems during the boom. \"Debt addition, tighter credit standards understand that the growth that fuelled booms all too often have limited the formation of new franchising experienced in the 4- provide false affirmation of a franchise small businesses and 5 years prior to the GFC was governments policies, a financial the expansion of existing fuelled by the exact same institution's ability to make businesses.\" (I think it important economic and financial factors outsized profits, or a country's to keep in mind that the IFA has that gave rise to the larger standard of living. Most of these been forecasting for the last 2-3 macro-economic bubble-and it booms end badly.\" years that this year will be the subsequent collapse. recovery year. 20 | Modern Franchise Magazine maxiom

Thus I think the most important account deficits, and a slowing Overall the analysis of the post question that we in the trajectory of economic growth, crisis outcomes for franchising industry must ask is exhibited virtually all the signs of unemployment, output, and what growth rate do we want and a county on the very of a financial government debt provides what growth rate should we crisis-indeed a severe one.\" sobering benchmark numbers expect? for how deep financial crises can A severe one indeed. We have unfold.\" If we expect a growth trajectory millions out of work still, and similar to the 4-5 years prior to those that are employed have Notwithstanding the remark of the Global Financial Crisis how seen their wages stagnate and the executive I reference above, I do we plan to achieve that their home value drop do not think most in the franchise without a similar type economic precipitously and not recover. industry-nor the country- environment? Or, do we care consciously want another how we get there just so long as But that is exactly what history liquidity bubble. The out-sized we do? has shown always occurred after short term profits fuelled by a a financial crisis. Reinhart and large amount of liquidity in the Toward that end, recently I had Rogoff state: \"an examination of system appear to be Faustian an executive remark to me that the aftermath of severe postwar bargain that few in the franchise he hopes that we experience financial crises shows that these industry want to engage in again. another liquidity bubble because crises have had a deep and it would return the franchise lasting effect on asset prices, What the executive likely meant market to its pre-GFC days. output, and employment. was that he wanted another great macro-liquidity event in our But is that what we really need Unemployment increase and Nation's economy, he just did not and/or want as an industry? house price declines have want to have it become a Turning again to This Time is extended for five and six years, \"bubble\". In that case, he, as well Different, the book reminds us respectively. Real government as most in American business that the boom we experienced in debt has increased by an today, is eagerly awaiting the America was powered by a average of 86 percent after three next economic boom. And if that liquidity bubble-a bubble that years. Historical experience is boom is to be fuelled by was destined to burst-and was that V-shaped recoveries in complicated financial fuelled in large part by the sub- equity prices are far more instruments and unrestrained prime mortgage market. \"In the common than V-shaped access to the debt markets then end run-up to the sub-prime recoveries in real housing prices \"this time will be different\" is the crisis, standard indicators for the or employment. refrain that is soon to be United States, such as asset repeated. price inflation, rising leverage, large sustained current maxiom Modern Franchise Magazine | 21

But as Reinhart and Rogoff detail So when many in the franchise If by loosening the IFA is silently with much precision it is unlikely industry lament that availability of longing for the loose credit from a historical perspective that finance is holding back franchise standards that reigned supreme the next time will be different. growth, is that actually a bad in the middle of the last decade \"The fading memories of thing? then that perhaps is the wrong borrowers and lenders, policy path down which to proceed. makers and academics, and the Or, will franchising as a industry public at large do not seem to continue to aim for, and the IFA If it is not, then it is incumbent improve over time, so the policy continue to lobby for, the good upon the leadership to set forth lessons on how to avoid the next 'ole days of \"outsized profits\" and with more particularity the goals blow up are at best limited. rapid franchise unit growth because liquidity in the system is fuelled as it was by what we now inextricably linked to the Technology has changed, the know to be an excess of debt franchise growth projections. height of humans has changed, accumulation both on the micro- and fashions have changed. Yet and macro level of our economy? In order to assure that we in the ability of governments and franchising do not repeat the investors to delude themselves, My guess is that few are even mistakes of the past, the giving rise to periodic bouts of thinking about the future of franchising industry needs euphoria that usually end in tears, franchising in these terms. Most perhaps a different approach. seems to have remained a simply want growth, and they constant.\" Franchising touches care not how that growth comes The industry needs leadership all segments of our economic about. (Of course this is how that does not repeat nor society-technology, labour, most in our country feel and is the countenance the thread-bare and finance, consumer, etc. emotional genesis for the boom statistically suspect mantra of and bust cycles examined in This \"franchises do better in Franchising will wax and wane Time is Different.) recessions.\" We need depending on the over-all leadership that understands that economic health of our country. Every six months the IFA (and while prospective franchisees FCA) puts out a statement about are more difficult to come by now The question that must be how the tight lending standards then they were prior to the Global answered is this: will franchising are retarding the growth of Financial Crisis that may not plot a course that is franchising. necessarily be a bad thing. complimentary too, but not dependent on, the next banking While that is undoubtedly true, it In the same way that it is now and finance led boom? would be helpful to learn exactly settled wisdom that there were what the IFA deems as the many who were allowed to take optimal level of liquidity in the out a mortgage five years ago system. 22 | Modern Franchise Magazine maxiom

that should not have been many franchise establishments Simply running the same plays permitted to do so, so too must exist today-and if you read the out of the same playbook, and the leadership in franchising reports carefully you will see that using statistically suspect boom state unequivocally that there the PWC reports state that 2007 year expectations of growth is were franchisees that should not was the first time that there was not a game plan for long-term have been awarded franchises enough data to even put forth a success. We have read this and business that should not sound estimate. book before. We know how it have been franchises as well. ends. And no, this time will not So while 1.9% may well be the be different. And if that be the case, then the appropriate and realistic growth growth rate that was rate for 2012, given the track Garth Snider is the President experienced in the years leading record of the reports put forth by and General Counsel of one of up to the Global Financial Crisis the IFA we must be more than a the largest franchise lead cannot be the benchmark for little sceptical about the numbers generation firms online. He has growth in the next decade. set forth. a degree in finance and banking from the University of The economic outlook published All of us with a stake in Georgia, and a J.D. from Emory for 2012 projects an increase of franchising want to see University. Garth Snider has 1.9% in franchise franchising grow again. We all experience in commercial establishments. believe in the fundamentals that litigation as he had practiced for under-gird its special place in But as stated above, the one our economy. In order to achieve the law firm named Griffin constant with the economic a prudent and sound franchise Cochrane and Marshall from outlooks produced by the IFA growth rate we need \"tough love\" 1998 to 2003. He is presently over the last four years is that leadership and sober, intelligent the President of Ad Engine each year the reports change responses to the challenging which is an online company many of the figures stated in the times in which we live. providing lead generation previous years report. The services for franchises and reports do have a convenient Doing so, however, requires an small businesses. escape mechanism in that all of honest appraisal of how we got the reports state that the here and whether the good 'ole numbers are \"estimates\". days were really that good. In other words, neither the IFA nor the high powered accounting and consulting firms commissioned to compile the reports know conclusively how maxiom Modern Franchise Magazine | 23

THE ALL-IMPORTANT FEATURES TOP FRANCHISES POSSESS With literally thousands of franchises in business today, you can quickly become mentally exhausted when researching which opportunity is the best. There is no \"best franchise\" out Stable industry. The leader in it's category. there that all franchise seekers You need to be marketing A major contributor to your should sign on for. Do you something that will be profitable potential success a franchisee is honestly believe that there is this no matter the economy. teaming with a franchise in line of people a mile long which they are the undisputed outside of McDonald's franchise A necessary, recession- leader. development office? Of course resistant product or service. not. So why is this? A dominant brand. Choose something that The answer is rather obvious. consumers either don't have Brand recognition is huge. This What is best for you may not be time to do or make or despise is a major reason to franchise in best for me. Maybe you love the doing and, thus, would rather the first place. idea of managing 10 or 20 pay someone else for. Stay employees and would thoroughly away from fads, as they are Growth Opportunities. enjoy the pride and prestige of unpredictable and don't provide Look for a franchise that franchising for the world's best longevity. encourages you to grow within known fast food brand. their group. Try securing the Market potential versus the rights to the surrounding sites or Someone else may have just competition. territories so you have room to been laid off after 20 years of grow and limit competition from It's wise to choose a franchise service for a computer software within your own group! that has little or no competition company and now wants to from other similar, established pursue his dream of a franchise Some franchise systems offer opportunity that is home based franchises. area developer or a master and requires no employees. You franchisee options. These are There are exceptions such as see, it all depends on your food courts in shopping centres, strong indicators that the unique values and interests. The franchise is thriving and planning product or service you offer but in general you don’t want to to expand and grow the be in direct competition at the should be secondary to the type business. sale location with a major of lifestyle your business will franchise or national chain. allow you and your specific role There are franchises out there as a franchisee. Franchising is about three that provide these key things: location, location, location. components. That being said, however, there are several essential features to The tricky job is identifying and look for when evaluating any finding them. franchise business. 24 | Modern Franchise Magazine maxiom

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WANT TO FIND THE BEST EMPLOYEES FOR YOUR FRANCHISE? Think like a headhunter! Give the job to someone who can do it; not someone who has done it before. There is much to learn from the They don’t get hung up on Don’t get too hung up on way executive search firms whether people have actually qualifications. Most executives operate within the recruitment done the job before. left university 20+ years ago. It’s sector. the 20 years since that employers When many recruitment firms should be interested in. If you take leaf out their book you advertise a job, they “invite can improve your chances of applications”. Applications are Many of Australia’s highest net recruiting the best people for your usually about experience. What worth individuals either just business, regardless of your size you are looking for is finished high school or barely or time in business. competence, not just experience. scraped through university. In the end it’s not what you’ve got that Like all good recruiters, search I can’t tell you the number of counts - but what you do with what consultants are all about reducing horror stories I’ve heard from you’ve got. the risk for their clients. They too, leading business people and like you, run a business. entrepreneurs about hiring Competence and attitude. Having someone with experience over the attitude to get the most out of However, they think outside the attitude. Finding competent what you’ve got and the box. Their first thought is, “who people is the key regardless of competence to achieve it is what can do this job and what are they experience in a role. you should be looking for. doing now?” They don’t just rely on experience or expertise. Unless you are looking for a And remember, before engaging medical specialist or lawyer, a recruitment firm, think whether The lesson is to be more creative vocational experience only counts outsourcing that job (or part of it) in your search. Recruiting people for only so much. Competence is is a better option and redefining according to what they can do, much more important. the position to suit your business not what they’ve done offers aims. businesses greater opportunities The person doesn’t have to have to find a superstar! done the job before, but they do You might already have that have to be able to do it. superstar in your business...or Look at the way big businesses you might discover a different set recruit & promote. They promote of skills will be better suited to and employ on potential. help you achieve your desired results. 26 | Modern Franchise Magazine maxiom

maxiom Modern Franchise Magazine | 27

modern franchise A HOME BUILDING FRANCHISE WITH ONGOING WORK READY & WAITING FOR THE RIGHT FRANCHISEES. Starting a home building franchise from scratch has provided some interesting challenges as Mike James from Micheal Polo Homes explains. 1. What inspired your we needed to find the right The franchising system we have business idea? strategy to tackle the increased created with the assistance of work load that we had created. our franchise consultant MPH is part of a strong and In the back of our minds provides the advantage of exciting industry. Having however, we felt that franchising buying power, innovation as a constant contact with people was a viable option as the group to be at the fore front from all walks of life, creating industry we operate in is a very of market trends, professional thier dream home and realising fragmented except for the marketing campaigns, long their personal vision, combined largest players. The top 100 established industry experience, with an environment of working builders now hold around 40% all whilst maintaining the so closely with clients that they market share. But there are personal level of service to our become your friends, it is hard around 50,000 other buidlers clients as they will be dealing not to be inspired. fighting for about 30% of the directly with an owner of the total market, with owner builders business. 2. How did you know comprising most of the rest. franchising was right for you 3. What previous experience and what ultimately The disadvantage of these did you have in the business smaller business structuctures before franchising? influenced your decision? purchasing power, state of the art marketing and innovation is In addressing our future growth Having come from a long line of plans we engaged the services restricted, so we decided that builders in the UK and Europe, of a leading franchise consultant. we needed to become a top 100 on both sides of the family, builder ourselves. We were open to building & design have been in recomendation for the most our blood. This extensive applicable path for our company. In this assessment of the industry and technical industry franchising was the right knowledge and our broad decision for MPH. Having worked with Maxiom’s business experience, enables marketing people to grow our us to direct the MPH business business as quickly as we have, well into the future. 28 | Modern Franchise Magazine maxiom

7. Tell us about some of the expectations that you had. Have they been met? So far everything has been in line with our expectations. These are exciting times. 8. Who is the target market for your franchise? We are looking for people to join our team who are passionate about servicing clients, who Michael Polo Homes lives by its’ service promise - ideally have a building designer homes “built on time and on budget; background or who have been every time” . involved in some area of the industry, and who have a keen eye for detail. More important is 4. How long did it take to 6. What challenges did you a can do attitude and someone develop and set up your face in setting up your who enjoys being creative. business? franchise? 9. How many units of your Whilst we have had over 30 The biggest challenge in setting franchise do you plan to years building & business up a customised franchise establish in Australia? experience, franchsing took us system is the amount some time to learn and we spent of variables to work through. Over the next 3 years we plan to over 2 years setting up the This challenge can be overcome establish 18 franchises and 40 franchise system. Developing as long as you maintain the within 5 years. our business is constant and intergrity of your company values always will be, everyday we are at every decision point, 10. Do you have any plans for developing more and more. and make a decision that best overseas expansion? provides the oppotunity for both 5. What was the driving force the franchisee and the franchisor At this stage we have no plans behind your decision to to make healthy profits so the for overseas expansion, though franchise? business system is sustainable we have already had enquiries. in the future. However, at this stage we intend Sales growth left us no option to make sure that our franchise other than to expand. Our Working with our franchise system is succesful in Australia decision to franchise was based consultant was fantastic, and that we meet all our targets on wanting to maintain product combining our concepts and for growth and customer quality, engage people with a visions with their franchise satisfaction before we look at true passion for their work, have industry experience, resulted in other markets. strong technical knowledge a franchise system that we are and personalised service to the 100% comfortable with and client. All of this can be achieved believe in. through the franchise structure. maxiom maxiom 24 | Modern Franchise Magazine Modern Franchise Magazine | 29

5 WAYS TO MOTIVATE YOUR FRANCHISE EMPLOYEES When you buy a franchise, if you haven't already owned your own business before, you probably have to make the difficult transition from working for someone to having people working for you. By Elise May Being an employee is very 2. Train your employees well, 4. Keep your work environment different from being the boss. and keep them up-to-date with positive. If your work You have to be a good and training. If you slack off on environment is clean, safe, and effective manager in order to training your employees, they honest, your employees will feel gain the respect of the people may feel like they are thrown out better about working there. You working for you. It is not as into the world without the ability do not want them to feel difficult as it sounds, as long as to do their jobs effectively. If they uncomfortable. you are willing to put in the effort feel poorly about how they are to motivate your employees. doing, are being yelled at by 5. Be nice to your employees, if customers, or worst of all, if you they are doing well, or even just Motivating your employees will blame them for doing a poor job because. You may want to be vital to your success. If the because they aren't trained well, organize a lunch or party for your people who work for you want to they are going to feel resentful employees, so they experience be there, they will work harder and upset that you aren't giving camaraderie with you and their and make your franchise even them all the knowledge they fellow franchise employees. better. Here are some ways to need to do a good job. motivate your franchise Happier employees work employees: Keeping your employees trained harder. will make them feel good about 1. Praise them if they are doing their job knowledge and will These are just a few a good job. This is the simplest make your business better. possibilities. There are many thing and is very easy to effective ways to motivate your implement. You should be able 3. Let your employees know that employees beyond this list. to tell who is working hard. If you they can advance. If your recognize them for doing a good employees see working at your In fact, if you are a new franchise job, it will show them that you franchise as a dead-end job owner and were previously an notice and care how hard they where they have no employee yourself, you can work. This will make them want opportunities for promotions, probably think of several ways to work harder. By contrast, if they are not going to work as that you felt motivated at a your employees are working hard as you need them to. previous job, and use those hard and doing a great job and ideas as a manager. you never recognize their efforts, If they know that good they are likely to stop trying so employees are rewarded with hard, and may even begin to advancement, they are more dislike you. likely to be good employees. But don’t praise just for the sake of it. Your employees are not idiots and will see through this. 30 | Modern Franchise Magazine maxiom

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THE 5 SECRETS TO EFFECTIVE FRANCHISE WEBSITES By Chris Anderson It’s shocking that in 2012, so many 2. Control Your Business’s Voice The solution is to have a website small businesses and franchisees Online that you can ALWAYS point people are still without a proper marketing to, regardless of the website to help boost lead With a website that is designed to communication channel (traditional generation, sales, and if nothing have frequent content updates, you advertising, banner ads, PPC, else just to get on the radar of can take control of the messaging, social media, etc.). would-be customers. and have a strong positive influence on your search engine 5. Generate Leads and Sell! Blaming the economy or uncertain rankings (SEO). Social media is retail conditions is a tired excuse the great equalizer allowing Most importantly, you need to have for why your business is suffering. customers to join the conversation a SALES channel online that is the Stop worrying about things you without barriers to entry. But hub where you’re looking to convert can’t control, and start focusing on owning the control of your brand traffic into leads, leads into the things you can…like having a and messaging through having a customers, and customer into real website! website is still vital. evangelists. Social media is an excellent vehicle to connect with For all of the franchisors out there 3. Gather Customer Information people, build personal with your heads in the sand, here relationships, improve branding, are some of the top reasons you Collecting visitors’ emails and other and a host of other benefits, but it’s NEED to have effective websites information through your website pretty tough to convert those warm for your franchisees (and for those opens an amazing opportunity to fuzzy discussions into sales. With reading who simply have cookie- maintain communication with a website, you can have a cutter, template pages that are potential and existing customers prominent sales call to action and almost exactly the same across through email marketing, which an easy way to collect customer the board, this applies to you too): can have a strong impact on information, and you can constantly customer retention. work towards increasing your 1. Investing Time in Social Media is conversion rates. a Waste Without a Website It’s also a great way to disperse new promotions to an audience Do you just have basic template Take a look at your social media who has already volunteered to pages, or worse listings, for your presence, and research your stay updated about news and franchisees, and are now franchisees’ Facebook, LinkedIn, happenings related to your reconsidering doing it the right and Twitter profiles – surprised to franchise. way? Click on the link on the next see how much activity there is? page for a personal demo to see 4. Have a Homebase to Point how easy it is to make a change to Now, look closer to see if there’s Customers To having search engine optimised, an underlying strategy to convert lead converting, social media those discussions in social media In today’s fragmented social media integrated websites for your into leads and ultimately sales. and Internet marketing arena, it’s franchisees. very easy to become completely Chances are this is where the ball disorganized and lose control of Or, if you’re more of a do-it-yourself is dropped. That’s where a website your lead conversion funnel – not to guy or gal, click the big comes into play – all of that great mention convoluting the experience momentum can be channeled to a for potential customers looking to Try it Free controlled website optimised to purchase your products or link and you can dive into a free convert traffic in paying customers. services, or just learn more. trial. 32 | Modern Franchise Magazine maxiom

the best platform to create + manage local websites for your franchisees Sell More Preserve Your Franchises Brand Online \"How am I going to market myself Rogue sites are bad for you and online?\" Have a good answer. your franchisees. They destroy Differentiate yourself. your brand and waste your franchisees' money. What's included with Empowerkit? For Your Customers For Your Franchisees For You An easy use to use website with An intuitive web editor, social media A comprehensive admin to create, relevant local info that can be found in and tracking tools, and a powerful manage, track and fine tune control on a snap! marketing tool your local sites Instant Demo m Modern Fr IntelBuild Magazine | 3anchise Magazine | 33 maxiomaxiom

WARNING SIGNS WHEN BUYING A FRANCHISE Buying into a franchise concept can be an attractive way for some people to become business owners. Ideally, a franchise company has a proven business model, saving new business owners the time, energy and money they would have to expend building concepts on their own. By Richard Wozniak Because investing in a franchise fact, spectacular or if there were, prospective will respond as is a life-changing event, every in fact, a long line of potential franchisees. Just make sure that prospective franchisee should Franchisees. the franchisor keeps his word thoroughly investigate a during this \"courtship\" period - if franchise opportunity before What's more likely in a pressure he doesn't, you'd be wise to not signing any sort of franchise situation is that the franchise jump into marriage! agreement. opportunity is not that spectacular, their line is not that 4) What do existing and former While there are multiple long, and, conversely, they need franchisees have to say? websites and books floating your money in order to make around that outline the steps that their payroll. There's no better way to find out ought to be taken in the interests whether a franchisor has lived up of due diligence, you should take 2) Do the salesperson's to its promises and provided a minute to review the \"red explanations not match up with leadership to its franchise flags\" we've outlined below: what's in the Disclosure network than by conversing with Document? current and former franchisees. 1) Is the franchise salesperson putting on the pressure? Is the salesperson making Keep in mind that, while there promises and/or commitments are always those disgruntled One of the traits of a good above and beyond what's written franchisees that had unrealistic franchisor is that it wants to in the Disclosure Document? expectations to begin with, a make sure there is a mutually large number of complaints good fit before \"closing the If so, you should have the among a set of franchisees sale.\" contract amended to include signals a definite red flag. those promises. Remember - Should you find yourself being always get it in writing. 5) Is there a history of litigation? pressured into making a decision but feel like you haven't 3) Has the franchise Litigation is not, by definition, a been given adequate time to salesperson not followed bad thing - for instance, a good think everything through, don't through? franchisor is willing to litigate in sign an agreement. order to protect the brand in Sometimes franchisors lead question. Frankly, the franchisor wouldn't prospective franchisees through be hounding you like that if the a bunch of hoops so they can And there will always be a franchise opportunity were, in better predict how the contingent of disgruntled 34 | Modern Franchise Magazine maxiom

franchisees that will blame the Are you confident that the If the franchisor can’t or won’t franchisor for their own support outlined in the show you what ROI you can shortcomings. However, agreement can effectively expect, and/or the feedback excessive litigation is certainly a assist you in managing from existing franchisees isn’t sign of trouble; if this is the case, your business? great then think again about this dig deeper. franchise opportunity. 7) Is the franchisor's financial 6) Are you uncomfortable with stability questionable? Some of the larger, more the level of training and support established chains have national provided by the franchisor? You should have a franchisor's advertising campaigns, whereas Disclosure Document reviewed the smaller ones tend to Consider the length and by a professional. advertise on a local level. composition of the program (all lecture or some hands-on While most franchisors have the Depending on what kind/size of experience?), the subjects to be best of intentions when they business you choose, you may covered, and the qualifications promise support, what matters is have to do most of the legwork - of the training instructors. that they are able to ultimately i.e., solicit your own clients. If provide the support you need. your concept requires sales If you're not sure whether or not skills that you don't have, you'll learn what you need to 8) Is the franchisors‘ marketing reconsider choosing that know to operate the business, what they say it is? concept - it may not be the right look into the issue. one for you! Many franchisors control all the Current franchisees are a good marketing for the franchise Without a strong targeted and source of information: group. When you investigate the measurable marketing plan a franchise opportunity, ask for franchise opportunity is unlikely Did they learn enough via some examples of the to be successful. training to operate franchisors’ marketing and get effectively? them to show you the return on There is an old saying in this investment. business “everything isn’t Did they get needed help marketing - but marketing is on an on-going basis from Ask some existing and former everything”. a qualified support staff? franchisees how successful the franchisors’ marketing is and if it targets the right customers maxiom Modern Franchise Magazine | 35

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WHY FRANCHISING IS STILL A GREAT WAY TO DO BUSINESS. What seems to be overlooked recently with some of the negative publicity and state enquiries into the industry, is that franchising is still a great way to do business. By Geoff Hodges There are countless benefits to the franchisor, through The franchisor trains the becoming a franchisee, which is their pilot operations franchisee (and the why Franchising is one of the previous experience and franchisee's staff) on a strongest sectors of the buying power, will have regular basis in all areas Australian economy. eliminated unnecessary of the business including; expense. manufacture, preparation, If the franchise you are accounting, business considering provides for all or The franchisor provides controls, marketing, most of the following then the the advice and/or promotion and chances are you will enjoy a assistance in identifying merchandising. successful franchise business: suitable trading locations or operating territories for The franchisor may The franchisor provides the franchisee. The negotiate better rates of comprehensive initial and franchisor is the expert. finance, or more onging training. They know what areas or favourable conditions, for locations will be franchisees with financial The franchisee benefits profitable and which institutions. from operating under the aren’t. name and reputation The franchisee receives (brand) of the franchisor, The franchisor helps the the benefit on a national which is already well franchisee in lease scale (if appropriate) of established, successful negotiations, complying the franchisors and positively perceived with planning laws, advertising and in the mind and eye of its’ preparing store layouts, promotional activities at a market. shopfitting and/or lower cost than if they refurbishment, and were to attempt such The franchisee will provide general marketing themselves. usually need less capital assistance in determining than they would if they what the franchisee will were setting up a require to launch the business independently business. because 38 | Modern Franchise Magazine maxiom

The franchisee is able to in the system, which The support and benefits leverage the bulk would otherwise be provided by a Franchise purchasing power and impossible for a non- system should greatly negotiating capacity franchised business to reduce a franchisee's made available by the access. business risks. franchisor by reason of the size of the franchised The franchisee has What will make it an even better network. Strongly available to it the way to do business is provide question any franchise services of the field franchisees with the necessary that does not provide operational staff of the protection that many cost advantages for franchisor who are there experienced industry franchisees. to assist with any participants are suggesting. problems which may The franchisee has arise from time to time in Ethical franchisors (which are in access to use of the the course of business. the majority) have nothing to franchisor's patents, fear from these changes, in fact trade marks, copyrights, A franchisee can also they will benefit from them. trade secrets, and any speak to their franchisor Their franchises will be more secret processes or and existing franchisees sought after and valuable. formulae. to discuss their business Franchisees will sleep safe in challenges or problems. the knowledge that there is The franchisee has the strong protection for their benefit of the franchisor's Many franchise systems investment and significant continuous research and have advisory councils repercussions for franchisors development programs, formed from high that don’t comply with these which are designed to performing franchisees changes. improve the business and that are there to assist all keep it up-to-date and franchisees and advise Do your due diligence, make competitive. the franchisor of sure you 100% happy with your recommendations or decision and are fully The franchisor provides a improvements that will committed to the business, the knowledge base make the whole franchise franchise and the developed from their own system better for franchisor....then enjoy the ride! experience, as well as customers, franchisees that of all the franchisees and the franchisor alike. maxiom Modern Franchise Magazine | 39

ARE YOU A BUILDER LOOKING TO GET OFF THE TOOLS? When you stop and think about it, as a builder you will use many types of coatings during the construction of even the most basic home. Whether its the interior or exterior paints, renders, texture coatings, timber stains, decking oils, waterproofing membranes, sealants, primers, bonding agents, impact coats, concrete sealers, patterned concrete toppings and many more, you will most likely be dealing with multiple suppliers, different trades, different products and all the while diluting your buying power and costing valuable time scheduling and managing all these different companies and trades on site. How would it be if you could deal with one company that took care of all these coating procedures for you with one phone call! PowerCoat are the only company in Australia, that has the expertise and experience to successfully project manage all your coating requirements. We can even take care of wall system installation, full wet area waterproofing and seamless flooring applications regardless of the product or system specified, with very few exceptions. No matter whether you are a builder of homes, units, high-rise developments or industrial and infrastructure, PowerCoat will tailor a coatings solution to suit your business, preferred products and construction schedule. Franchise opportunities now available Australia wide. maxiom 40 | Modern Franchise Mag maxiom 10 | Careers Magazineazine

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FAIR WORK OMBUDSMAN LAUNCHES NATIONAL FRANCHISE PROGRAM The Fair Work Ombudsman has launched a free tailored program, to assist franchisors interested in promoting fair and compliant workplaces in their franchise business. By David Marks The newly launched National Compliance with workplace laws As a franchisor, taking practical Franchise Program offers is important to all franchise brand’s steps to assist franchisees to franchisors an opportunity to reputation. The National Franchise meet their responsibilities and protect their brand by proactively Program assists franchisors in minimise the risk to the franchise working with the Fair Work promoting and supporting brand is a smart decision. Ombudsman to support fair and franchisee compliance across compliant workplaces across their their business. The program offers Most franchise agreements impart franchise network. franchisors an opportunity to a contractual responsibility upon participate in a program specially the franchisee to comply with Participation in the National tailored to their business. Workplace Laws Franchise Program is both free and voluntary. While individual franchisees are As a franchisor, you can assist by: not eligible for the program, they engaging appropriately The National Franchise Program are encouraged to discuss the qualified human resources offers participating franchisors: program with their franchisor. and industrial relations a tailored plan to support personnel to train, update their business’ compliance Franchisees who employ staff and assist franchisees with workplace laws have the same workplace rights arranging corporate and responsibilities as other a dedicated FWO Advisor employers. This new website has memberships with an who will work with the information and advice, as well as employer association, or participating franchisor templates and resources to help special rates with a throughout the program and franchisees. professional adviser. This assist with enquiries may help franchisees practical guidance about Fair Work Ombudsman Advisors access reliable and cost how to promote and support will help franchisors develop and effective advice compliance with workplace implement programs to increase purchasing HR/IR systems laws across the franchise their franchisees’ understanding or software to help your business of, and compliance with, franchisees achieve workplace laws with the program consistent and compliant free tools and resources to educate franchisees about being tailored to best support their workplace practices. the Fair Work Act business. providing franchisees with greater visibility of, and Failing to meet workplace information about their rights control over, workplace responsibilities can have serious and obligations under the issues arising in their consequences for an employer. If national workplace relations franchise business. that employer is part of a laws franchise, these consequences may be felt by the entire brand. 42 | Modern Franchise Magazine maxiom

providing franchisees with The Fair Work Ombudsman Fair Work Ombudsman also templates that show them suggests Franchisors could suggests franchisors can promote what to do. You might share monitor compliance by: and support co-workplaces in their materials prepared for the conducting periodic audits of franchise business by business by a qualified employee pay slips and keeping franchisees advisor leave records to ensure regularly updated about their helping franchisees franchisees are meeting obligations under the calculate the right rates of their record-keeping national workplace relations pay. This may involve a obligations laws and how they can get centralised time keeping and providing franchisees help payroll system, sharing information and tools to negotiating an enterprise current pay rates prepared conduct ‘self-audits’ and agreement for your for the business by a requiring franchisees to franchise business. This qualified advisor, or directing report back the results can create clarity and franchisees to the Fair Work consistency about Ombudsman online pay assisting franchisees to conditions of employment tools. resolve workplace disputes across the business with employees Regularly monitoring by providing an anonymous ensuring your franchise franchisors that that franchisees enquiry or complaint service agreement contains terms are complying with the national for employees, so they can requiring franchisees to workplace relations laws will mean feel comfortable about comply with the national they are better placed to see and raising concerns about their workplace relations laws address issues before they employment checking that your become a problem. franchises’ business requiring franchisees to notify the franchisor of modelling takes into account Before implementing new employee complaints and the costs of lawfully monitoring activities, franchisors /or Fair Work Ombudsman employing adequate should check what their franchise investigations or audits numbers of staff. agreement or business structure allows them to do and adhere to encouraging franchisees to With larger franchise systems any applicable privacy obligations. understand and actively more likely to have well developed cooperate with Fair Work systems in place to manage Fair Work Ombudsman Nicholas Ombudsman investigations workplace issues and strong Wilson said the program would be or audits. agreements that cover worthwhile for franchisors who franchisee’s responsibilities the wanted to improve their brand success of the program will because they would be publicly ultimately be determined by the supporting workplaces where level of interest and engagement workers' rights were seen to be from franchisors. valued. Registrations for the free program close February 29. For more details phone 13 13 94 maxiom Modern Franchise Magazine | 43

WHY YOUR EMPLOYMENT BRAND IS SO IMPORTANT Increasingly, a company's employment brand is playing a vital role in the ability of employers to secure quality candidates in a talent short employment market. By Kristin McNicol Just as big consumer brands and Develop a realistic level of Franchisees play a particularly franchises strive to create an expectation with important role in maintaining the emotional link between the employees employment brand as they are the consumer and their product to Ensure employees are front line employers most staff, influence purchase choice, aligned to the culture of customers and suppliers deal with employers competing for talent are the company on a daily basis. finding they must do the same by articulating compelling reasons Embrace the employment brand For franchises, differentiating their why their organisation is a great internally business from its competitors and place to work. articulating the reason why their The next step is to make sure the franchise is a great place to work employment brand and the EVP is Employment value proposition is one of the major keys to reflected in every element of the The first step in developing a company's operations. For this to success. company's employment brand is occur successfully the developing the company's employment brand must be For many franchises developing of employment value proposition embraced by senior management employment brand has been a (EVP). The EVP is a statement (or and business owners. By taking powerful tool in achieving this and set of statements) which define ownership, senior management is ensuring they are able to attract the essence of the employment signalling the importance of the and secure the best candidates. experience at the company. brand to all employees. Tips for identifying, developing Developing the EVP involves Employment brand management and presenting your taking an honest look at a is often integrated with internal organisation's employment company from both an internal and marketing (IM), and strives to build brand external perspective and distilling stronger links between the Understand every organisation the positive areas. In many cases employee brand experience and already has an employment brand; it is best to have this evaluation customer brand experience. the objective is to find out what it is process completed by an that sets your business apart independent external group so the If a new employee is recruited and Examine your business findings are not tainted or skewed their employment experience is and the maximum transparency is different to that which was from both an internal and achieved. external perspective to promised, there is a high distil your organisation's possibility that the employee will EVP Having an EVP will provide rapidly become disengaged. This employers with a deeper can easily be reflected on how Get external help to get an understanding of the company, staff deal with customers. impartial view on your enabling them to: EVP Therefore, it is vital that everyone Present the employment involved in the recruitment Once the employment relationship in the best process firstly understands the brand has been possible light (ie. what’s in company’s EVP and secondly, developed, make sure it is it for the employee and they are able to articulate it and reflected in every element what is expected in return) deliver on it. of the employee experience 44 | Modern Franchise Magazine maxiom

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5 WAYS TO FIND OUT IF A FRANCHISE BUSINESS MAY BE RIGHT FOR YOU Are you the right kind of person to start up a franchise opportunity? Look at our 5 hints below to see how you measure up: By Jane Hudson 1. Do you like the idea of meticulously as possible so that Fortunately, the majority of operating a proven it can be successful. If, however, franchisors provide training as business? you prefer to adopt the lead an integral part of the franchise position, invent some of your package. Regularly reading If the answer is positive then a own concepts and others have a business books, or book franchise opportunity is simply tendency to follow your lead, you summaries, and franchisor that... a business idea which has may find a franchise opportunity training material is a good place been proven and found to be cramps your entrepreneurial to start. effective. Quite simply, you spirit. benefit from somebody else's If you're keen to master new time and effort in trying and 3. Are you willing to learn? methods and business testing out a viable business processes, even though they structure. Should the reply be A key component of success in might go against how you might that you simply enjoy the any business is learning. have done comparable duties challenge of taking a Regardless of whether you run before, then you could potentially commercial idea of your own your own stand-alone business find a franchise business design and testing it for yourself, or a franchise operation, suitable. If you’re not, then forget then a franchise may not be what learning will be a key factor in about going into any business! you're seeking. the level of your success. All top performing entrepreneurs spend 4. Do you think you're willing 2. Are you a Leader or a good deal of their time to work hard? perhaps a Follower? learning. So do top performing franchisees. Those who aren’t This is certainly an issue that If you tend to be a follower and prepared to invest in learning & could apply to any business you are happy to go along with development for themselves and endeavour regardless of other people’s ideas, then a their staff end up the bottom whether it’s a franchise or stand- franchise opportunity could well performers in any business or alone business. be suitable for you. Franchising industry, franchising is no requires implementers not exception. A central part of Do not be fooled into thinking entrepreneurs! One of the most adhering to a successful formula that a tried and tested system crucial aspects of a franchise is to learn the systems; getting guarantees that it'll be business is that the franchise educated on the processes and successful regardless of whether system is ‘followed’ as business procedures which will you work hard or not. help you operate the franchise effectively. 48 | Modern Franchise Magazine maxiom

Lazy business owners quickly 5. Do you have access to If your answers were generally become low performing spare capital to invest in positive then a it is likely that you business owners. Most go starting up a business? will find running a franchise an broke. Working hard, constantly enjoyable and successful learning new things and Every business carries risk, experience. If they were negative maintaining your self belief are franchises included. Every then you might find it the keys to business success. business needs some capital in challenging. order to get off the ground. The important thing here is not Franchises vary in establishment It is important to be honest with really the work itself, but cost from a few thousand dollars yourself when looking at any understanding that operating to $1 million +. business opportunity. Just your own venture could involve a because it work for one person good deal more time and effort You will also need working doesn’t mean it will for you. than simply doing a regular job capital to fund cash flow. You where you arrive at 8.30am and have to decide how much you There are many types of people leave at 5.30pm. are prepared to risk? that are successful in business and franchising, so ensure you Not surprisingly you will discover How much can you afford to investigate what makes the different types of franchise which spend? existing franchisees successful will control the kind of work you'll in any franchise you are do. How much finance can you get considering. and will the cost of servicing this A professional or white collar still leave enough profit for business opportunity, for wages and a reasonable return example, might involve longer on your investment? hours working from your desk, where as a van based business could indicate you are out visiting clients a lot or working more using your hands. Particularly in the early stages, you might find yourself working longer and harder to be successful. But you will have the satisfaction and of building up your own business and a saleable asset. maxiom Modern Franchise Magazine | 49

LESSONS FROM RECENT FRANCHISE FAILURES, LAWSUITS & BANKRUPTCIES 2011 saw a number of franchises fail, star franchisees end up in bankruptcy, litigation against rogue franchisees and more pressure from franchisee groups to amend the franchise code to include a good faith clause. So what are the lessons from 2011 that can help the franchise sector in 2012? By Naomi Walshe Franchising is a great way of and the odd scam such as Brands insolvency has had its getting into and growing a SensaSlim. It was good to see critics. business. But like any business the the Franchise Council of or investment it has its risks, Australia grant SensaSlim An important lesson to emerge particularly as there are many membership too. Good on them. from Heal's bankruptcy is that he “owners” in a franchise network. Maybe they were the only ones clearly didn’t do adequate due who got paid! diligence on Allied Brands and There have been some well made a hefty investment in a publicised cases in 2011 where High profile franchise failures failing franchise. Heal was a franchisees and master such as RedGroup Retail (Angus multiple-unit franchisee, he was franchisees decided to leave a & Robertson. And Borders), also a multiple-brand franchisee. franchise and start up their own Allied Brands (Baskin & Robbins competitive business. Obviously Australian franchise - well At one point he owned up to 30 the former franchisors of these technically that was in late 2010 outlets concurrently across rogue franchisees weren’t too but it’s relevant as you’ll see several different brands including thrilled with this so they later) & Refund Home Loans. Baskin Robbins, Eagle Boys, commenced legal action. Zarraffa's Coffee, Subway, and Generally it ends badly for the Then high profile franchisee Noodle Box, and employed franchisee. There have been a Shane Heal’s bankruptcy hit the around 300 staff. number of franchises effected media in late 2011. This is a such as Cold Rock Ice Cream story that still has more to be In Australia, multi-unit franchising and Essential Beauty. told. is only just becoming a more widely used model to expand The lesson here is simple. When Peter Dinoris of Vincents franchise networks, so many you invest in a franchise you Chartered Accountants who franchisors are still developing don’t buy the system to use handled the Allied Brands the support systems and whenever and wherever you like. insolvency has been appointed business models required to It is never yours to own so don’t as Heal's bankruptcy trustee too! assist multi-unit franchisees try and steal it. It never works out successfully manage their in your favour…Never! There are significant questions operations. Multiple-brand still unanswered in regards to the ownership is even less common On the franchisor side we had whole Allied Brands saga and in Australia. While the brands some well publicised failures Vincents handling of Allied were all in the broader food 50 | Modern Franchise Magazine maxiom