Franchises set path to success
Franchise Council of Australia is on a recruitment drive ahead of its state conference in Brisbane this month, promoting franchises as the most successful and supported form of employment for anyone interested in working for themselves.
“If small business is the engine room of the economy, franchising is the turbo booster on that engine,” FCA chairman Steve Giles says.
“Sadly, about 45 per cent of small businesses fail in the first two years.
“In franchising, the average term of the franchise agreement is just under seven years, and 95 per cent of franchisees go to a second agreement.
“It’s like comparing chalk and cheese.”
There are 70,000 franchisees in Australia, of which more than 10,000 are in Queensland.
Nationally, franchise businesses employ more than 600,000 people and injected $128 billion into the Australian economy last year.
FCA state conference guest speaker Michael Paul, who founded the Pack and Send International retail franchise network, says the key to maintaining strong economic growth in the current climate is to continue to innovate and invest in business systems.
“A lot of retailers these days are up against online retailing and they are considering going into multi-channel distribution offices,” Paul says.
“Look at Domino’s Pizza. You can now order a pizza through an iPhone app and that has helped them to expand their market.”
But he says any business system is only as good as the people running it, which is why some franchises thrive while others just survive.
Paul says promoting from within is a successful recruitment approach. This involves training staff to become business owners, using the company’s own sophisticated training systems.
Ashley Knight, 28, from Rockhampton, has turned a part-time job making sandwiches at a Subway restaurant into a career path.
He is now co-owner and manager of Australia’s favourite Subway restaurant as voted by patrons nationwide, on Blanchard St in North Rockhampton.
“I didn’t come from a rich family, I had no financial backing from my parents,” Knight says.
“The franchisees loaned me the money out of the store and I bought a 30 per cent portion of the store.
“I sold my car and had some savings for a deposit.”
Knight has repaid more than half the initial loan and is now co-owner and manager of two of Rockhampton’s four Subway restaurants.
When he’s not on the job, Knight is value-adding to his business system by developing an iPhone app for quick service industries, so businesses can place orders for all their different suppliers from their iPhone.
“In my own store it was a bit of a pain. We have a bunch of different suppliers, and all with different ways of ordering,” he says.
“We had to fax the salads, call up Coke, go online for something else.
“With this app, the suppliers don’t have to do anything at all. It sends an email off to all of our suppliers.”
Giles says it doesn’t need to cost a fortune to buy into a franchise.
“You could pick up a cleaning or mowing franchise for $30,000,” Giles says. “You’d be getting the cleaning equipment, branded trailer and a very strong business pipeline delivery. The franchise brand owner does it for you.”
At the other end of the scale, it could cost $750,000 to buy a high-turnover 7-Eleven franchise.
Knight’s tips for good management
– Select the right staff. Look for people who are passionate and energetic. Experience in an industry is not always necessary.
– Spend time with new staff to ensure they understand their job. Knight works alongside staff on their first three shifts to ensure that they learn the right way to do things.
– Create a happy and harmonious working environment for staff, with shift flexibility.
– Teach good customer service. Good eye contact with customers is important. Be consistent, friendly and don’t just look down when making their food.
