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The second tip for franchisee success, after you’ve ‘gained an understanding of how franchising works’ is to make sure you select the correct franchise for you and your goals for buying a franchise in the first place.Also in this post, we’ll cover the next tip too, which is to ‘get the right advice from the start’.
You might like dogs however do you want to wash 60 – 80 dogs a week?You might like pizza, however are you prepared to give up your Friday and Saturday nights for the first few years while the business gets established?
These are the kinds of issues which prospective franchisees don’t always consider until they’re actually operating the business.Prospective franchisees need to undertake thorough due diligence and should always speak to existing and former franchisees of the franchise/s they’re considering – these people can provide the greatest insights into what it’s like to work with the franchisor and head office team, and what it’s like to work in the business. (A list of suggested questions to ask existing and former franchisees is included in our free online pre-entry franchise education program to help get you started).
A great question to ask existing franchisees is, ‘if they had their time over would they still buy the franchise?’
The franchise conflict research conducted by the Asia-Pacific Centre for Franchising Excellence uncovered that prospective franchisees generally don’t conduct much research before buying a franchise and are even less inclined to invest money into the due diligence process.However saving a few dollars in the short term, may mean losing everything in the long run. If you’re not prepared to invest in the right advice to make your business a success, perhaps you shouldn’t be investing in a business.
Ideally franchisees should at least seek professional advice from a good franchise accountant, a good franchise lawyer and a franchise or business consultant.It’s strongly recommended you seek advice from professionals who have franchise experience, as franchising is a unique business structure.
And if you missed part one, ‘#1 Understand how franchising works (before signing a franchise agreement)’ you can access it here.
|Posted in: Lorelle Frazer|
It’s no secret franchising can turn everyday people into wealthy entrepreneurs.Everyone’s heard inspiring stories of how franchisees have developed highly successful and profitable businesses, sometimes taking on multiple stores, achieving financial freedom or spending minimal hours ‘at work’.
However, wealth is not always guaranteed and if people don’t approach franchising in the right way and research their decision correctly the opposite can also be true.Below is the first of five tips for franchisee success, based on research findings from the Centre.
Although franchising can provide an excellent framework for running your own business, particularly if you don’t have business experience, there are some common misconceptions and restrictions which come as part of the franchising package.And the truth is, not everyone is suited to franchising.
As a franchisee you need to follow the systems and processes outlined by the franchisor, even if you don’t understand the reasons behind them.
You’ll also be required to pay on-going franchise royalties to the franchisor which are often based on your sales (not profit), although how these are calculated vary from franchise to franchise.
The majority of franchise systems also have a marketing fee you’re required to pay, in addition to money you’ll need to invest into local area marketing.
You may also be required to source all stock from the franchise suppliers (some franchises have an exception to this rule).
The benefit is the group-buying leverage generally means you can get the best price by using the franchise supplier.
Even if you can get a better price through an alternative supplier you may still have to purchase through the franchise supplier.Our Centre research into franchise failure shows most unsuccessful franchisees deviate from the franchisor’s system, whether through offering different products, pricing or other forms of non-compliance, however don’t perceive this to be the cause of their troubles. (If you speak to successful franchisees though, they often follow the system to the letter so the results generally speak for themselves).
To get a quick overview of your rights and requirements as a franchisee and a basic understanding of franchise regulations, the Franchising Code of Conduct and how to conduct effective due diligence (as well as some of the common mistakes franchisees make) the Asia-Pacific Centre for Franchising Excellence offers a free online pre-entry franchise education program short course, funded by the Australian Competition and Consumer Commission.The course is made up of five short modules, and includes a range of tools and tips to help you with your due diligence. You can find out more on the Pre-Entry Franchise Education Program at: http://www.franchise.edu.au/pre-entry-franchise-education.html
|Posted in: Lorelle Frazer|
For franchise marketing campaigns to be effective, franchisees and their staff need to be engaged.
Here are five tips to enhance franchisee and staff engagement on marketing and maximise the effectiveness and implementation of campaigns.
Franchisees and staff value the opportunity to be involved in the marketing process.
This doesn’t mean you need to consult every franchisee or staff member individually; however you do need to have franchisees represented in the planning process.
One option is to create a marketing consultative committee with a selection of key franchisees who can provide feedback and advice on campaigns.
However, you will also still need to provide clear and effective communication regarding the campaign will all franchisees and staff.
The better understanding of the rationale and execution of marketing campaigns, the more engaged franchisees and staff will be.
Not only is it important to communicate with franchisees regarding marketing campaigns, it is also important for communication to flow both ways.
Listening to feedback from franchisees will not only boost engagement, you may also receive some valuable insights and suggestions.
While you may not act on every suggestion, franchisees and staff may be able to provide insights on elements overlooked by head office, or minor tweaks required to make the campaign more effective as they work at the ‘coalface’ of the business.
Once a marketing campaign is ready to be executed it is recommended you guide franchisees and their staff through the process.
Some franchises produce short videos, a photo gallery and/or step-by-step guide to assist franchisees with the execution of a campaign, particularly with in-store and point-of-sale materials so they and their teams are clear on the process and expectations.
Other franchises then go beyond this to also offer a range of incentives for the franchisees or team members that produce the greatest results, or who execute the campaign the best.
Incentives don’t necessarily need to be monetary rewards either.
Get creative and test and measure the effectiveness of various rewards until you find those that best resonate with your franchisees and their staff best.
In addition to testing and measuring different rewards, it is also wise to test marketing campaigns in a single store or location, where possible.
If a campaign doesn’t work you will then be able to tweak and improve as required before investing the resources in rolling the campaign out nationally.
Ensuring only the most effective campaigns are rolled out nationally will help maintain franchisee engagement over time too, and having the data from the trial will help build confidence among franchisees that the campaign is worth investing in.
You can also increase marketing effectiveness and help franchisees achieve greater impact with their local marketing spend by developing franchisee cluster groups, where franchisees within a region or market pool their local marketing spend.
Not only will their marketing have greater reach, this approach also helps ensure consistent messaging throughout a region, which again enhances marketing effectiveness
Some of the best franchise marketing minds will be sharing their insights and expertise at the Franchise Marketing Forum 2013: Building brand equity and engagement on November 20 in Brisbane.The Forum runs annually and is a joint initiative of Griffith University’s Asia-Pacific Centre for Franchising Excellence and the Franchise Advisory Centre.
Find out more or register online at: http://wired.ivvy.com/event/FMAR13/
|Posted in: Lorelle Frazer|
Research released earlier this year identified 14 key factors that differentiate successful franchisees and small business owners from those who fail.
During the ‘Survival of the Fittest’ panel discussion at the National Franchise Convention (NFC) on the Gold Coast next week, I will explore the research findings with the real life experiences of:
The discussion will take place on Tuesday, October 22 from 1.25pm – 2.10pm.
You can download a copy of the ‘Survival of the Fittest’ research report at: http://www.franchise.edu.au/survival-of-the-fittest-research.html
The research was conducted by the Centre and funded through an Australian Research Council Linkage grant with Franchise Council of Australia and the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education.
AND, If you're attending the NFC and see me, please come up and say hello.
|Posted in: Lorelle Frazer|
Two thirds of franchises use a formal Board of Directors or an Advisory Board to assist with strategy and governance, according to the Franchise Performance Metrics research findings.
Founder and former franchisor of Eagle Boys Dial-A-Pizza Tom Potter says getting a Board was one of the best decisions he ever made in business.
He even went so far to get an external review of the Board periodically to assess what skills the Board needed to move the business forward at that time.
Here at the Asia-Pacific Centre for Franchising Excellence we have an Advisory Board to provide advice on strategy and governance to ensure the Centre continues to be relevant to franchise sector needs.
The key functions of the Board are:
Our Board has also been instrumental in providing introductions to help build our relationships throughout the Asia-Pacific region.
Here is an overview of our Board:
The Centre is fortunate to have Australian Competition and Consumer Commission Deputy Chair Dr Michael Schaper as the current chair of our Board.
Michael Schaper was appointed a deputy chair of the ACCC on 30 May 2008 for five years. Dr Schaper brings extensive experience in the area of small business through his previous roles as the Australian Capital Territory Small Business Commissioner, Dean of Murdoch University Business School in Western Australia and as President of the Small Enterprise Association of Australia and New Zealand. He has also been a member of the board of directors of the International Council for Small Business, served as head of the School of Business at Bond University and held the foundation professorial chair in entrepreneurship and small business at the University of Newcastle. Before this, he was employed as a senior lecturer at Curtin University, responsible for the university’s entrepreneurship degree programs. Between 2001 and 2003 Dr Schaper held several posts as visiting professor at the Ecole de Management in Lyon, France and at the University of St Gallen, Switzerland. In Australia he has served as an adjunct professor at both Curtin University and the University of Canberra. In addition to his extensive academic career, Dr Schaper has worked as a professional small business advisor and as the owner of a number of new business start-ups. The author or co-author of eight business management books, he has been a regular columnist in a number of national magazines, newspapers and journals on business issues. He has also worked as a policy advisor to government at both state and federal levels. Dr Schaper is a member of the ACCC’s enforcement and adjudication committees. He holds a PhD and a Master of Commerce degree from Curtin University, as well as a Bachelor of Arts from the University of Western Australia.
Professor Powell is Pro Vice Chancellor (Business) at Griffith University. Previous to this appointment he held the position of Dean of the Griffith Business School, having joined Griffith in early 2004 from the University of Auckland. His current portfolio includes leadership of the University's Business Group, and associated Research and Academic Centres. In addition to his role as Pro Vice Chancellor (Business) at Griffith University, Michael is currently the Treasurer of the Australian Business Deans Council. The Council is a national entity comprising Deans, Heads and Directors of Australian University business faculties and schools seeking to advance and promote business education and research.
Brett Roveda is a multi-unit franchisee and consultant. Brett has over 25 years national and international experience including line management and senior executive roles in the mining, transportation and information technology industries. Furthermore, he has extensively consulted to these industries in areas such as supply chain management, management information systems selection and implementation, change management, business and strategy reviews, operations and process improvement and major project evaluation. Brett has grown IT companies in Japan and the Asia-pacific and was responsible for turning around a major IT business in the North American market. Since 2007, Brett and his wife have owned a Gloria Jeans in northern Brisbane and acquired a second store in 2009.
Sandy Carrington is the Managing Director of Fitness and Dance Australia Pty Ltd, a leading dance studio franchise operation offering 54 locations across Queensland and Melbourne servicing 5000 members. A successful Fitness and Dance Franchisee, Sandy developed 8 new locations, 4 with record opening client numbers and purchased an additional 5 locations growing the client base in each. During time as Franchisee Sandy developed and mentored 3 new Franchisees and won franchise awards for excellence in 4 consecutive years. Sandy took over the franchise company in 2008 with plans to grow the operation outside of SE Queensland. Sandy has continued to grow the business introducing 7 new Franchisees, established locations in Melbourne and Regional North Qld, developed an integrated software system and broadened the core program and merchandising operations. Sandy’s other relevant business experience includes senior finance and management roles in both the public and private sector and she holds a Graduate Certificate in Franchising.
Albert Kong (CFE, CMC, PMC) is CEO of Asiawide Franchise Consultants. Albert and his team have helped more than 500 Asian franchise brands develop and market their company throughout the region. Albert has been an Executive Council member of Singapore’s Franchising & Licensing Association for more than 15 years and has been Chair of the International Development Committee for 13 years. He also lectures on franchising at Ngee Ann Polytechnic in Singapore and is publisher and editor of the inaugural Asia Pacific Franchise Directory. Since March 1994, Albert has been publishing the only bilingual English-Chinese franchise magazine, Asia Franchise & Business Opportunities. Albert speaks regularly at franchise events across Asia and the world.
Josh has been with McDonald's for 17 years, beginning his career as a crew person in restaurants on the Sunshine Coast at the age of 16. Josh worked as a restaurant manager whilst at university completing a Bachelor of Business (Accounting). Josh then pursued a corporate career in the Finance Department within McDonald's. During this time he worked with both Corporate and Licensee restaurants and was the key financial contact for the Queensland, Northern Territory, Western Australia and Pacific Islands Regions. He is also a full member of CPA Australia. Most recently he has moved back into an Operations role. For the past 3 years, Josh has been the Field Service Manager QLD/NT and is responsible for working directly with Licensees for the Queensland & Northern Territory Region. There are currently 172 licensed restaurants and 62 licensees within the region. As the senior Field Service role for the region, Josh is primarily accountable for restaurant operations, franchising and people development. In that position Josh had a team of 7 Field Service personnel that reported directly to him. However, earlier in 2013 Josh took on a new position of Real Estate Manager for NSW and the ACT.
Michael Sherlock transformed leading Bakery Franchise Company Brumby’s into an Australasian success story taking it from a capitalized value of $6 M to $46 M in 3 years! Under Michael’s leadership direction and strategy it was transformed into to a highly regarded franchised system with over 320 stores when it was sold via the ASX in 2007. Michael now spends his time as a regular columnist for BRW Smart Talk, AFR Enterprise and Franchise and baking magazines: Speaker: Mentor and Consultant /Director to numerous companies such as Shape Shopfitting, GrassAds, Stepz 24/7 Gyms and Singways. He has co-written a book on Growth strategy, Jumpshift! , shift your business into Hyperdrive which has been selling well since it was released in 2011, he has also contributed to two other books on franchising and mentoring.
Former Board Members have included:
Expressions of interest are invited for our Advisory Board in 2014. The Board meets quarterly and is an honorary position, however travel costs to attend meetings will be covered. For further information contact Centre General and Business Manager Ms Kerry Miles via email or phone 07 3382 1125.
|Posted in: Lorelle Frazer|