Thursday, February 27, 2014
Wednesday, February 26, 2014
Friday, February 21, 2014
Five legal tips for new franchisees
There are many avenues that a potential franchisee needs to
cover prior to embarking on their journey within a particular franchise
system.
It goes without saying that undertaking comprehensive due diligence is a must for each and every potential franchisee.
However, there are a number of considerations within the realms of such due diligence that must be looked at in more detail.
The top five tips for potential franchisees to aid them in their search for the ‘right fit’ franchise business:
1. AFFORDABILITY AND NUMBER CRUNCHING
You must have a clear understanding of how much investment is required to see if you can afford to invest into the business and whether that investment is warranted given the potential return on your investment.
The answer to this question may not necessarily be obvious by way of adding the immediate start-up costs such as the initial franchise fee, equipment purchase and/or fit-out expenses.
The actual total investment will also incorporate a realistic working capital amount and allow for the inevitable unexpected items.
2. APPROACHING CURRENT AND FORMER FRANCHISEES
Franchisees are the best people to speak with to find out more information about the franchisor and the franchise system.
Find and speak with as many franchisees as you can and ensure you speak with a broad cross section of those who have recently joined, more experienced operators and those who have moved on. Don’t be afraid to ask difficult questions about the franchisor, the business and the numbers.
3. PERFORM ALL RELEVANT SEARCHES
We recommend that comprehensive searches are undertaken in relation to the franchisor, its directors and the franchise system you are considering.
These include company searches, intellectual property searches, insolvency searches and Google searches . You can engage the services of a solicitor to aid you with performing some of the relevant searches.
What you may uncover may be quite an eye-opener. For example, the ACCC has a process whereby franchisors can obtain immunity from exclusive dealing arrangements, such as forcing franchisees to buy exclusively from a particular supplier.
The disclosure document does not actually have a requirement to disclose such arrangements but the ACCC website includes a register of exclusive dealing notifications which can be searched by the name of the franchisor.
4. LIFESTYLE AND INDUSTRY
If you plan to work in the franchise business you are buying , then you must understand how that position will impact on your lifestyle and your family. You must also understand what skills you currently have and may need to either obtain or improve for your franchise business to succeed.
You should also look at what formal qualifications, if any, you or your staff members will need to obtain and how easily obtainable they are.
5. TAKE ALL DOCUMENTS TO BE REVIEWED BY SPECIALISTS
You will benefit in a number of ways from obtaining legal and accounting advice from the experts of the industry.
If you are investing a substantial amount of money and time into a franchise, not only will the advice give you the confidence to proceed, it may actually save you from future problems arising as a result of something inherent in the documents.
A lawyer may be able to uncover an issue you haven’t considered, an accountant may tell you that the franchisor is asking too much for too little in return. Either adviser may be better placed to give you unbiased professional advice and possibly get you a better deal, which is worth well over the cost of that advice.
Jane Garber is a solicitor at Franchise Legal, which has offices in Melbourne, Sydney, Brisbane and Adelaide.
It goes without saying that undertaking comprehensive due diligence is a must for each and every potential franchisee.
However, there are a number of considerations within the realms of such due diligence that must be looked at in more detail.
The top five tips for potential franchisees to aid them in their search for the ‘right fit’ franchise business:
1. AFFORDABILITY AND NUMBER CRUNCHING
You must have a clear understanding of how much investment is required to see if you can afford to invest into the business and whether that investment is warranted given the potential return on your investment.
The answer to this question may not necessarily be obvious by way of adding the immediate start-up costs such as the initial franchise fee, equipment purchase and/or fit-out expenses.
The actual total investment will also incorporate a realistic working capital amount and allow for the inevitable unexpected items.
2. APPROACHING CURRENT AND FORMER FRANCHISEES
Franchisees are the best people to speak with to find out more information about the franchisor and the franchise system.
Find and speak with as many franchisees as you can and ensure you speak with a broad cross section of those who have recently joined, more experienced operators and those who have moved on. Don’t be afraid to ask difficult questions about the franchisor, the business and the numbers.
3. PERFORM ALL RELEVANT SEARCHES
We recommend that comprehensive searches are undertaken in relation to the franchisor, its directors and the franchise system you are considering.
These include company searches, intellectual property searches, insolvency searches and Google searches . You can engage the services of a solicitor to aid you with performing some of the relevant searches.
What you may uncover may be quite an eye-opener. For example, the ACCC has a process whereby franchisors can obtain immunity from exclusive dealing arrangements, such as forcing franchisees to buy exclusively from a particular supplier.
The disclosure document does not actually have a requirement to disclose such arrangements but the ACCC website includes a register of exclusive dealing notifications which can be searched by the name of the franchisor.
4. LIFESTYLE AND INDUSTRY
If you plan to work in the franchise business you are buying , then you must understand how that position will impact on your lifestyle and your family. You must also understand what skills you currently have and may need to either obtain or improve for your franchise business to succeed.
You should also look at what formal qualifications, if any, you or your staff members will need to obtain and how easily obtainable they are.
5. TAKE ALL DOCUMENTS TO BE REVIEWED BY SPECIALISTS
You will benefit in a number of ways from obtaining legal and accounting advice from the experts of the industry.
If you are investing a substantial amount of money and time into a franchise, not only will the advice give you the confidence to proceed, it may actually save you from future problems arising as a result of something inherent in the documents.
A lawyer may be able to uncover an issue you haven’t considered, an accountant may tell you that the franchisor is asking too much for too little in return. Either adviser may be better placed to give you unbiased professional advice and possibly get you a better deal, which is worth well over the cost of that advice.
Jane Garber is a solicitor at Franchise Legal, which has offices in Melbourne, Sydney, Brisbane and Adelaide.
Twist on crowd funding: Crowd franchising lets investors buy part of franchise
Ever walked into a small business and liked it so much that you thought, "I could make a bundle if I owned one of these!''
A Chicago-based yogurt shop owner says that shouldn't be a pipe dream.
Mandy Calara, co-founder and CEO of Forever Yogurt, has started an online business that allows ordinary people to buy ownership in a franchise for as little as $1,000.
Calara launched CrowdFranchise.com in December with the hopes of
expanding his chain of 24 self-serve yogurt shops and, eventually,
connecting investors with other franchise concepts. He's promoting nine
new group-owned franchises, including one in Tampa and another in Miami
Beach, where the chain already has a store on Ocean Drive.
CrowdFranchise.com works like crowd funding sites such as Kickstarter and Indiegogo, except instead of backers donating money to make a new product, campaign or organization come to life, investors buy part of a franchise.
The investors vote on decisions concerning the franchise and get a cut of any profits based on what percent of the franchise they own. The corporate office scouts the sites and provides the management. If the business flops, investors lose their initial investment but aren't financially responsible.
Calara got the idea for crowd franchising when he started franchising Forever Yogurt, a Chicago-centric chain founded in 2010. Despite plenty of interest from investors, not everyone had the $350,000 to $400,000 to start a franchise.
"We were looking for new ways for interested franchisees who did not qualify individually to open a store,'' he said. "We wanted something that the average income investor could participate in.''
So far, Forever Yogurt has received commitments from 19 investors totalling $402,000 to create a location in Chicago's Wicker Park near its flagship store. To open, it needs $650,000 — enough to cover a larger than usual reserve fund.
For anyone thinking about buying a franchise, Calara says group ownership is a good way to gain experience without all the work. Investors are privy to documents and various aspects of the business but don't have to wash the dishes or lock the doors at night.
Finally, some validation for us book nerds. New data from Chase Freedom card services shows that holiday spending on books — including e-books — was up 31 percent over last year, the most of any category.
Interestingly, the survey also found sales of electronics were down 15 percent and toys were down 4 percent. A victory for books? Maybe, in a roundabout way. Chase's analysts credited the boost to so many people already owning tablets, e-readers and laptops, but needing more titles to download.
Denver might be mourning the Super Bowl loss but, at least, has this to cheer: Walmart is offering shoppers there online grocery ordering and store pickup — the first test of "Walmart to Go'' nationwide.
Walmart started online delivery service in Colorado last year and, based on the results, decided to expand to store pickup. Delivery charges run $5 to $7 per trip, but store pickup is free.
Publix tried a similar curbside service several years ago but dropped it in 2012 because of low customer support. It also charged $7.99 per order, which could have been a deterrent.
There's no saying when or if Walmart will expand its online/pickup service, but I'm sure all its competitors will be watching. To promote the new service, Walmart gave Denver area shoppers who ordered groceries online during Super Bowl week a free "Game Time Snack Pack'' with two sodas, two bags of chips and a jar of salsa.
After that blowout of a game, they probably could use it.
Susan Thurston can be reached at sthurston@tampabay.com or (813) 225-3110. Follow her on Twitter @susan_thurston.
A Chicago-based yogurt shop owner says that shouldn't be a pipe dream.
Mandy Calara, co-founder and CEO of Forever Yogurt, has started an online business that allows ordinary people to buy ownership in a franchise for as little as $1,000.
CrowdFranchise.com works like crowd funding sites such as Kickstarter and Indiegogo, except instead of backers donating money to make a new product, campaign or organization come to life, investors buy part of a franchise.
The investors vote on decisions concerning the franchise and get a cut of any profits based on what percent of the franchise they own. The corporate office scouts the sites and provides the management. If the business flops, investors lose their initial investment but aren't financially responsible.
Calara got the idea for crowd franchising when he started franchising Forever Yogurt, a Chicago-centric chain founded in 2010. Despite plenty of interest from investors, not everyone had the $350,000 to $400,000 to start a franchise.
"We were looking for new ways for interested franchisees who did not qualify individually to open a store,'' he said. "We wanted something that the average income investor could participate in.''
So far, Forever Yogurt has received commitments from 19 investors totalling $402,000 to create a location in Chicago's Wicker Park near its flagship store. To open, it needs $650,000 — enough to cover a larger than usual reserve fund.
For anyone thinking about buying a franchise, Calara says group ownership is a good way to gain experience without all the work. Investors are privy to documents and various aspects of the business but don't have to wash the dishes or lock the doors at night.
Finally, some validation for us book nerds. New data from Chase Freedom card services shows that holiday spending on books — including e-books — was up 31 percent over last year, the most of any category.
Interestingly, the survey also found sales of electronics were down 15 percent and toys were down 4 percent. A victory for books? Maybe, in a roundabout way. Chase's analysts credited the boost to so many people already owning tablets, e-readers and laptops, but needing more titles to download.
Denver might be mourning the Super Bowl loss but, at least, has this to cheer: Walmart is offering shoppers there online grocery ordering and store pickup — the first test of "Walmart to Go'' nationwide.
Walmart started online delivery service in Colorado last year and, based on the results, decided to expand to store pickup. Delivery charges run $5 to $7 per trip, but store pickup is free.
Publix tried a similar curbside service several years ago but dropped it in 2012 because of low customer support. It also charged $7.99 per order, which could have been a deterrent.
There's no saying when or if Walmart will expand its online/pickup service, but I'm sure all its competitors will be watching. To promote the new service, Walmart gave Denver area shoppers who ordered groceries online during Super Bowl week a free "Game Time Snack Pack'' with two sodas, two bags of chips and a jar of salsa.
After that blowout of a game, they probably could use it.
Susan Thurston can be reached at sthurston@tampabay.com or (813) 225-3110. Follow her on Twitter @susan_thurston.
Franchises Target Immigrants as Buyers Foreign nationals hope franchising will be the key to obtaining a green card
Chains such as YoBlendz, Elements
Therapeutic Massage and Battery Giant have begun pitching themselves to
well-heeled foreign buyers using so-called EB-5 visas as a selling
point. The federal program, launched in 1990, gives foreign nationals
the chance to obtain permanent residency by investing a minimum of
$500,000 in a U.S. business.
The catch: The investment must create at least 10 new jobs within two years, or the foreign investor is sent back home.
Despite
the risk, franchisers see it as a chance to lure buyers who are set up
to seal a deal quickly. And for foreign applicants who lack the
entrepreneurial chops to launch a venture from scratch, franchises offer
a ready-made business model with a proven record, says
Stephen Caldeira,
president of the International Franchise Association, a
franchising trade group.
"We're seeing
growing demand from franchisers for well-capitalized investors, and EB-5
applicants see franchising as a safer bet, in terms of an investment,"
Mr. Caldeira says.
New Interest
Last
year, 6,343 foreign nationals applied to the EB-5 program, up from
6,040 in 2012, and just 470 in 2006, according to the latest data from
U.S. Citizenship and Immigration Services. The agency estimates that as
of September 2013, the program has raised more than $8.6 billion and has
created some 57,300 jobs.
Interest in the program has
skyrocketed since the financial crisis, as traditional forms of
financing dried up, immigration lawyers say. Several big companies have
tapped the once-dormant program to fund huge projects through hundreds
of foreign investors, including Marriott International Inc., Sony
Pictures Entertainment, and the developers of the Barclays Center, home
of the National Basketball Association's Brooklyn Nets.
But now franchises have begun courting EB-5 investors, too, says
Jania Bailey,
president of FranNet, a franchise consulting firm. "It's really new for us," she says.
One
franchise buyer who has tapped the EB-5 program is
Zhijun Mao.
In March, the 25-year-old borrowed $550,000 from his parents in
China to open a YoBlendz frozen-yogurt stand, as well as a JuiceBlendz
fresh-juice stand, at the AmericanAirlines Arena in Miami. A graduate of
the State University of New York at Buffalo, where he studied finance
and international business, Mr. Mao applied for an EB-5 visa in July
based on the investment, which included a one-time franchise fee of
$40,000. His student visa is set to expire in June.
Mr.
Mao says the two stands will put about 24 people to work, including up
to eight workers behind the two counters. The rest of the jobs are based
on estimates of increased consumer spending, as his investment ripples
through the local economy, he says.
The
immigration agency is currently processing his application, including a
full analysis of his business plan and economic projections. If all goes
well, he expects the stands to be up and running by July. "I'm 100% new
to this business," says Mr. Mao, whose father owns a construction firm
in China. "But I want to stay here in the United States. That's my
goal."
Mr. Mao says he looked into
several other franchise options, including McDonald's, Burger King and
Subway. But YoBlendz caught his eye, he says, because it had posted
information about the EB-5 program on its website, in both Chinese and
Spanish.
Based in South Florida, the
company started franchising in 2005 and currently has nearly 30
locations, including two that are owned by EB-5 investors. The company
began promoting the program on its website in 2011, and since then has
attracted 12 foreign investors to back new locations currently in
development across the region, says
Adam Ogden,
founder of YoBlendz and JuiceBlendz. The EB-5 program is a "great
opportunity to attract investors and launch new locations" at a time
when financing is scarce, he says.
But
the program isn't a perfect fit for every franchise. Most outlets cost
less than $500,000 to launch and thus don't meet the minimum threshold
for investment under the EB-5 program, Ms. Bailey says. Another major
drawback: The immigration agency's background checks and economic
analyses can drag on for several months, even years. That can run afoul
of franchisers' tight development deadlines, says
Dennis Monroe,
a franchising lawyer in Minneapolis. "They're just not interested
in waiting that long," he says of franchisers.
What's
more, immigrant investors receive only a two-year visa until
immigration officials are satisfied that the job quotas will be met,
leaving them in limbo.
Adding to the
uncertainty, the immigration agency has clamped down on EB-5
applications in recent years, after a number of ventures tied to the
program were charged with fraud, including a Chicago real-estate
developer and a McAllen, Texas, pooled-investment fund that were both
shut down last year by the Securities and Exchange Commission. In
October, the SEC issued an alert warning of "investment scams targeting
foreign nationals who seek to become permanent lawful U.S. residents"
through the EB-5 program.
Mr. Ogden, of
YoBlendz, says the crackdown has made it more difficult to sell the
program to wary investors. "It has been a constant challenge dealing
with investor concerns," he says.
Another Route
Rather
than taking a risk, some foreign franchise buyers are vying for a
temporary E-2 visa, which tends to have faster processing times and a
lower upfront investment of roughly $100,000 in a U.S. venture. But
unlike green cards, the visas must be renewed every two years.
Alex Gomez,
a 39-year-old from Vera Cruz, Mexico, obtained an E-2 visa last
year after investing $220,000 in a ProCuts barber shop in McAllen, which
currently has five employees. "I would never have pictured myself as
the owner of a hairdressing salon," says Mr. Cruz, who also owns a
hardware store back in Vera Cruz.
Mr. Mao says the twin pressures of running a business and "learning to live in a new country" can be stressful.
For
now he's sticking with the program, he says. "It's not the fastest way
to get a green card, but I want to be an entrepreneur, too. And this way
I'm achieving both."
Mr. Loten is a small-business reporter in The Wall Street Journal's New York bureau. He can be reached at angus.loten@wsj.com.
Franchise Trends for 2014
| Franchise Trends for 2014: Forecast by An Expert |
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“The franchise
industry provides an ideal route to business ownership for many
people,” Hall said. “There are so many choices to fit each individual’s
personal and professional goals. In 2013 the top franchises purchased
by our clients included senior home
care, new and refurbished personal electronics, fast casual food, hair
care, temporary staffing services, personal wellness, and hearing
testing and devices. Clients also purchased businesses that offered
children’s fitness, provided medical staffing and ran private learning academies.” Here are some of the top market sectors that Hall thinks will continue to show or begin to show rapid growth in the 2014 and beyond: Officing Solutions: “Remember executive office suites?” Hall says. “They are still around and provide well-appointed offices and support to larger corporations and smaller companies that need an impressive appearance. New franchises in this space are offering office solutions that fit today’s entrepreneurs and their fast-growing and smaller companies. Usually located in the suburbs, these newer officing concepts offer full-service virtual office solutions which include private offices, daily use offices, conference rooms, common working space or drop-in lounges, all supported with the necessary infrastructure and technology.” Wellness: Fitness franchises will continue to grow and evolve in 2014, Hall predicts. “Much of this is fueled by lower-cost business models which segment fitness and weight-loss training and offer more individualized services at lower prices. The wellness segment also includes the popular and continued-fast-growing massage therapy franchises, nutrition stores and healthy vending concepts. Services are purchased by a growing and more health-conscious consumer base created, in part, by health-conscious baby boomers, corporate wellness programs and a government and insurance-company focus on health maintenance.” Electronics: “The continued growth of smart phones and other personal electronic devices has created the need for repair and refurbishing services,” Hall explains. “Franchises that sell and service these PED’s will continue their rapid growth which started a couple of years ago. Services include the repair and restoration of cell phones, iPods and iPads, gaming devices and laptops. These are environmentally friendly businesses which also sell accessories and prepaid cards to customers fed up with long-term contracts from the larger wireless companies.” Senior services: “This trend is a no-brainer with the growth of the over-65 population,” Hall noted. “Home non-medical and personal-care franchises have seen significant growth during the last six to seven years, and that trend will continue. Contributing to the growth will be the pent-up demand in North Carolina, caused by a three-year moratorium on licensing that is expected to be lifted mid-year. Food: Food continues to be the largest segment of franchising, Hall says. “Today’s brand names will continue to grow and new concepts will be introduced. Who knew that frozen yogurt concepts would become so popular again? These franchises, along with several other food concepts, offer healthier food fare, semi-absentee ownership and relatively easy expansion opportunities. We also expect to see coffee concepts grow during the next few years as would-be owners look for concepts that can offer competition to Starbucks and to the relatively few and expensive coffee franchises that currently dominate the market.” Mike Hall is president and owner of Franchise Resource Group Ltd., a.k.a. FranNet Carolina, a franchise sales and consulting firm with offices in Charlotte and Raleigh, N.C and Charleston, S.C. He advises clients on how to search for and evaluate franchise opportunities and is responsible for placing hundreds of new franchise owners throughout North and South Carolina. Mike has served on the FranNet National Board of Directors and was named a Consultant of the Year or Top Performer in 1999 and 2000 and again in 2006, 2009, 2010 and 2011. In 2009 his office was recognized with a "Commitment to Excellence" award. He is a frequent lecturer on franchising and small business ownership and conducts public seminars on a regular basis. Hall is a franchise owner himself, and has been since 1991. Learn more at www.FranNet.com/mhall and his blog site, www.franchiseacumen.com. Contact: Buck Lawrimore President Lawrimore Inc. 1320 Fillmore Ave., Ste 312 Charlotte, NC 28203 704-332-4344 Buck(at)Lciweb.com http://www.Lawrimore.com |
Canada: Ontario Franchise Legislation – Tough Times For Franchisors
Canada: Ontario Franchise Legislation – Tough Times For Franchisors
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As an example, if the disclosure material contains the slightest deficiency, a franchisee can operate its business for up to two years before deciding whether or not to terminate the franchise agreement.
If the franchisee decides to terminate on that basis, it is entitled to receive back from the franchisor all of the money paid to the franchisor for the franchise rights including any money paid for equipment purchased for use in the business. Obviously, that equipment has to be returned.
The recent case of 2189205 Ontario Inc. v. Springdale Pizza Depot Limited deals with the question of the franchisor's obligation to re-purchase equipment when the equipment itself is in poor condition.
In this case, the franchisor was ordered to pay compensation to the franchisee in a substantial amount for certain supplies and equipment payable upon the return of that equipment.
The franchisee had kept almost all of these items in storage in a barn in rural Ontario since 2009. It was now prepared to deliver this material to the franchisor in exchange for payment.
The franchisor argued that the franchisee was "unable" to return the supplies and equipment because of their poor condition given that they had been in storage for almost five years. The franchisor argued that the poor condition was at least partially as a result of what it alleged was improper removal and storage by the franchisee.
The Court ruled in favour of the franchisee. It determined that under the legislation, equipment has to be repurchased regardless of its condition. The Court considered that the legislation is remedial in nature and contains no duty on a franchisee to mitigate its damages. As a franchisee is entitled to be made whole, and as there was no evidence in this case of any deliberate acts of damage to the equipment by the franchisee, it was entitled to repayment of the entire purchase price. Its condition was irrelevant.
The legislation is indeed remedial in nature. It came into force as a result of an enormous amount of abuse heaped on unwitting and vulnerable franchisees by unscrupulous franchisors. However, cases like this must make one wonder as to whether or not the legislation simply goes too far.
Originally published at www.irvinschein.com.
Wednesday, February 19, 2014
The multi-unit franchisee kicking goals
Steve Rollings opened his first Anytime Fitness franchise in
Muswellbrook in early 2008, and has gone on to open a total of 10 gyms
in just five years.
He owns gyms in locations including Cessnock, Forster, Greenhills, Gunnedah, Kotara, Muswellbrook, Singleton, Tamworth, Taree and Thornton.
“I decided to purchase a franchise because I wanted to operate a business system, not create one. It’s much faster to do business this way,” he says.
A GREAT BUSINESS MODEL
Steve has expanded his empire rather rapidly, so it comes as no surprise he was sold on Anytime's ability to establish a strong presence for itself in the USA.
“I loved the massive growth and culture that Anytime Fitness had in the USA. They had grown from zero to 800 clubs in just six years.
“I also loved the fact that you can run multiple Anytime Fitness clubs with ease,” added Steve.
Expansion has been made easy thanks to the brand’s business model, a key factor being the gym's ability to operate with little or no staff.
“Once I had established my first club and trained up my management team they were able to handle it on their own and I didn’t need to be involved in the day to day activities, so I had spare time again,” he explains.
“From there I decided to open more clubs and it just continued. I loved the fact that the gyms were never staffed on weekends or public holidays. This was a massive benefit for me as I have a young family with four kids.”
SUPPORT = SUCCESS
Steve has employees that oversee the day-to-day running of his clubs, allowing him to head up a regional office that oversees all 10.
“This involves having meetings with my team, going out and visiting the clubs, and planning new club upgrades, purchases and relocations,” he says.
While he is a sole franchisee, Steve has a strong support network of head office staff behind him
“I run my team with a general manager, Scott Brown. Under Scott there’s Jarrod, who looks after club compliance and personal training, Jess who looks after marketing and IT, Lisa my financial controller and Michelle, the admin assistant," Steve says.
He also receives assistance, when required, from Anytime’s support office, and is in regular contact with his franchise consultant.
“[We] have access to an e-learning platform which is great, [and] there is also an online operations manual which includes a step-by-step breakdown of what to do.
“Sales training moves through the country every six weeks and when you first sign up you take part in a week long franchisee training program which equips you with all the tools you need to get started and stay successful,” Steve explains.
THE PERFECT LIFESTYLE
“After being with Anytime Fitness for five years, I am in the process of selling a few of my 10 clubs and investigating other business opportunities,” says Steve.
He has been involved in the franchising industry for nearly 20 years and loves the lifestyle, so it seems additional franchised brands could be on the cards.
“It [franchising] has enabled me to have a fantastic life with my wife and four kids. Being an Anytime Fitness franchisee means I only work an average of 30 hours a week.
“This means I am lucky enough to have more time with my family which is the best benefit of all. It also enables me to travel overseas three to four times a year with them,” he adds.
He owns gyms in locations including Cessnock, Forster, Greenhills, Gunnedah, Kotara, Muswellbrook, Singleton, Tamworth, Taree and Thornton.
“I decided to purchase a franchise because I wanted to operate a business system, not create one. It’s much faster to do business this way,” he says.
A GREAT BUSINESS MODEL
Steve has expanded his empire rather rapidly, so it comes as no surprise he was sold on Anytime's ability to establish a strong presence for itself in the USA.
“I loved the massive growth and culture that Anytime Fitness had in the USA. They had grown from zero to 800 clubs in just six years.
“I also loved the fact that you can run multiple Anytime Fitness clubs with ease,” added Steve.
Expansion has been made easy thanks to the brand’s business model, a key factor being the gym's ability to operate with little or no staff.
“Once I had established my first club and trained up my management team they were able to handle it on their own and I didn’t need to be involved in the day to day activities, so I had spare time again,” he explains.
“From there I decided to open more clubs and it just continued. I loved the fact that the gyms were never staffed on weekends or public holidays. This was a massive benefit for me as I have a young family with four kids.”
SUPPORT = SUCCESS
Steve has employees that oversee the day-to-day running of his clubs, allowing him to head up a regional office that oversees all 10.
“This involves having meetings with my team, going out and visiting the clubs, and planning new club upgrades, purchases and relocations,” he says.
While he is a sole franchisee, Steve has a strong support network of head office staff behind him
“I run my team with a general manager, Scott Brown. Under Scott there’s Jarrod, who looks after club compliance and personal training, Jess who looks after marketing and IT, Lisa my financial controller and Michelle, the admin assistant," Steve says.
He also receives assistance, when required, from Anytime’s support office, and is in regular contact with his franchise consultant.
“[We] have access to an e-learning platform which is great, [and] there is also an online operations manual which includes a step-by-step breakdown of what to do.
“Sales training moves through the country every six weeks and when you first sign up you take part in a week long franchisee training program which equips you with all the tools you need to get started and stay successful,” Steve explains.
THE PERFECT LIFESTYLE
“After being with Anytime Fitness for five years, I am in the process of selling a few of my 10 clubs and investigating other business opportunities,” says Steve.
He has been involved in the franchising industry for nearly 20 years and loves the lifestyle, so it seems additional franchised brands could be on the cards.
“It [franchising] has enabled me to have a fantastic life with my wife and four kids. Being an Anytime Fitness franchisee means I only work an average of 30 hours a week.
“This means I am lucky enough to have more time with my family which is the best benefit of all. It also enables me to travel overseas three to four times a year with them,” he adds.
Friday, February 14, 2014
Franchise Players: Terry and Lisa Jeffers on Running a Franchise With Your Spouse
Franchise Players is Entrepreneur’s Q&A interview column that puts the spotlight on franchisees. This week, in honor of Valentine’s Day, we’re honoring power couples in franchising. If you're a franchisee with advice and tips to share, email ktaylor@entrepreneur.com.
Terry and Lisa Jeffers wanted to own a franchise that came from the heart. With experience in social services and management, the two teamed up to buy a Right at Home franchise. With the perfect combination of heart and business, the couple has learned the ups and downs of dealing with a true 24/7 profession. Here’s how they learned to run a franchise with someone who is more than “just” a business partner.
Name: Terry and Lisa Jeffers
Franchise owned: Right at Home in two territories (Rancho Cucamonga and Claremont) managed from an office in Rancho Cucamonga, Calif.
How long you have owned the franchise?
Four and a half years
Why franchising?
The home care industry is one from the heart, and we knew we were well-equipped with our compassion and Lisa's experience with the disabled and senior communities. But owning and operating a business is a beast with too many heads to try to manage, from human resources, to taxes, to laws and regulations. We understood and appreciated the support that a franchise would provide.
Related: Franchise Players: Franchising Gave This Young b.good Owner Real-World Experience
What were you doing before you became a franchise owner?
Terry was the branch manager for a major truck leasing corporation. Lisa worked for the Dept. of Social Services in several capacities including assisting the disabled with their benefits, licensing and monitoring assisted living facilities and investigating adult and elder abuse.
Why did you choose this particular franchise?
We knew we wanted to partner with a reputable franchise with a solid business model to help us be the most successful in the shortest period of time. We researched and interviewed all the major franchises and Right at Home had the best combination of heart and business.
How was the process of becoming a franchise owner different for a couple versus and individual? It really was a huge leap of faith that our marriage would withstand the ups and downs of being business owners together! Because of our relationship, and our love and respect for each other, we didn't want to let the other down in any way. Our decisions not only impacted our business, they had the potential to completely disrupt our marriage and home life.
How much would you estimate you spent before you were officially open for business?
Franchise fee $45,000. Additional $75,000 for the office, supplies, taxes and fees, recruiting, training, marketing etc etc etc!
Where did you get most of your advice/do most of your research?
Terry did a lot of online research on all the major franchises. He then narrowed the list down to his top 5, at which time Lisa got involved. Lisa talked to her contacts in the disabled and senior care fields to get a good idea of who had the better reputations and provided better service. Meeting the executives of Right at Home headquarters in Omaha solidified that this was the company that best matched our values and goals.
Related: Franchise Players: A Complete Nutrition Franchisee on Learning to 'Be the Boss'
What were the most unexpected challenges of opening your franchise?
A 24/7/365 industry means we did get calls at 3 in the morning, that a client would need TLC at a moment's notice, that a caregiver would have an emergency and would need a replacement in 30 minutes, that a family could only meet on a holiday. There is never the sense of relaxation, of being able to lock our doors at 5 p.m. on Friday and all would be quiet until Monday at 9 a.m. This isn't a widget business, it's a people business and we need to be accessible.
What have been the biggest challenges and positives of running a business with your spouse?
The challenge is staying married while seeing each other all day every day! Working with your spouse is different than "just" a business partner. If you don't live together and it's a tough day, fraught with challenges and disagreements, you can each go to your own homes and relax and recuperate in your own ways, and detox and refresh. But when you're married, you have to go home to the same home and deal with home issues too, like cooking, cleaning, laundry, errands, etc. It never ends. The business can consume your home life and we have to make a conscious effort to be marriage partners in addition to business partners. The positive is that we know each others' core values, we completely support and trust each other and we are pulling on the same rope. That makes the good days, the victories, the knowledge that we are helping our community, that much sweeter. It is so special and rewarding to know that we have built this business together!
What advice do you have for individuals and couples who want to own their own franchise?
For couples, assess your strengths and limitations and be brutally honest with yourselves about what you can and can't do, what you do and don't want to do in the business. Being upfront will help you determine if this really is a good fit for your personalities and skills. For individuals, your biggest challenge will be to find the person you can trust to work hard for and with you. As a couple, we already had a built-in coworker!
What’s next for you and your business?
Massive growth! The first two years, we ran this all on our own and were very successful! But now, we have four full-time and one part-time employees in the office and expect to skyrocket! We absolutely love being able to help our community with high quality care. Thanks to a staff we can trust, we might even be able to take a day off!
Related: Franchise Players: The Sweet Success and Brand Support of a Cinnabon Franchisee
McDonald's Allows Franchising in Shanghai, Shenzhen
McDonald's Corp (NYSE: MCD) has allowed franchising in Shanghai and
Shenzhen to step up its business in the most developed cities of the
world's fastest growing major economy, Yicai.com reported.
The Golden Arch said it opened franchising in China's two richest cities on December 10, 2013. The move came as the company's revenue and earnings turned out worse than expected after being hit hard by sluggish global economic recovery.
Last year's bird flu outbreak in China has taken its toll on Yum! Brands Inc's (NYSE: YUM) KFC business in the country, but had a limited impact on McDonald's. Industry watchers say McDonald's is taking advantage of KFC's setbacks to gain a greater market share.
On the other hand, franchising will help offset slower organic growth and reduce operating risks, a marketing strategist told Yicai.
McDonald's first allowed franchising in China in 2010 in Jiangsu, Fujian, Sichuan and part of Guangdong provinces. It currently operates around 4,000 restaurants in the country.
Up to 80% of McDonald's 32,000-plus global locations are franchises.
See McDonald's stock market performance:
http://finance.yahoo.com and type in the ticker symbol (MCD). Plot against YUM. What can you learn about McDonald's?
The Golden Arch said it opened franchising in China's two richest cities on December 10, 2013. The move came as the company's revenue and earnings turned out worse than expected after being hit hard by sluggish global economic recovery.
Last year's bird flu outbreak in China has taken its toll on Yum! Brands Inc's (NYSE: YUM) KFC business in the country, but had a limited impact on McDonald's. Industry watchers say McDonald's is taking advantage of KFC's setbacks to gain a greater market share.
On the other hand, franchising will help offset slower organic growth and reduce operating risks, a marketing strategist told Yicai.
McDonald's first allowed franchising in China in 2010 in Jiangsu, Fujian, Sichuan and part of Guangdong provinces. It currently operates around 4,000 restaurants in the country.
Up to 80% of McDonald's 32,000-plus global locations are franchises.
See McDonald's stock market performance:
http://finance.yahoo.com and type in the ticker symbol (MCD). Plot against YUM. What can you learn about McDonald's?
Thursday, February 13, 2014
Thursday, February 6, 2014
Wednesday, February 5, 2014
What's next for Domino's?
According to group CEO Don Meij, another 200 stores,
technological developments and healthier, more adventurous product
offerings are all on the cards for the pizza franchise.
EXPANSION
Domino’s opened its 600th Australian/New Zealand store at the end of last year, and it has firm expansion plans for the future.
“We’ll be opening 50 stores in Australia and New Zealand over this financial year. We've had a very good first half - we have basically already opened just over half of those stores,” says Meij.
“We’re having our strongest store opening growth since 2005-06.”
Over the next four years, Domino’s aims to open its 800th store across Australia and New Zealand.
Meij attributes the brand’s continued expansion to its sales performance, product offering and digital prowess.
“Between our product, digital platforms and reimaging of our stores to ensures Domino’s continues to look fresh and relevant, we’re getting a lot of good growth.
“We are Australia’s most sophisticated digital retailer, almost 60 percent of our sales are made online, and more than half of that is mobile,” he explains.
TECHNOLOGY THE FOCUS
Much of Domino’s time was devoted to product in 2013 (the brand launched its ‘game changing’ Chef’s Best range) however technology will be at the forefront in 2014.
“Yes we do have some new, innovative pizzas and side items coming but we are investing in technology more than anything.
“We are spending a record amount on digital development this year to ensure we continue to lead in the space.”
Meij remained tight lipped as to what the technological developments are, however he said the brand’s first instalment will launch in March, and we can expect another by the middle of the year.
THE PIZZA INDUSTRY: MEIJ'S VIEW
Meij describes the pizza industry as “dynamic and exciting,” and welcomes the gourmet pizza chains.
“I think we will continue to see on one fringe there is a lower volume of business but we will see the gourmet chains continue to grow.”
He sees price point as a key differentiating factor between Domino’s and gourmet pizza chains, and doesn’t see them as a threat.
“They are really good for the category, when you’re paying twice to three times as much for a gourmet pizza it’s a very different pizza experience.
“A Domino's customer is buying significantly more frequently because we are a genuine meal replacement, we are not a treat in a sense that it’s a priced out there treat,” he says.
“We want the gourmet chains to be successful because they bring more attention to pizza overall and when people see the difference in prices there is obviously going to be a lot more Domino’s experiences.”
HEALTHIER ALTERNATIVES
Meij stresses Domino’s isn’t trying to portray itself as a destination for people on a diet; however the brand’s pizzas are much better for the waistline today than in the past.
“Our fastest growing consumer is women with kids because we’ve made the product healthier than it once was,” he says.
“We’ve been pulling the fat out of our product; our mozzarella is a 30 percent fat reduced variety - that’s standard on every pizza, we’re the only pizza company to do that. The product has a lot less fat, sodium and preservatives than it once did - it’s just much better for you.”
PRODUCT INNOVATION
Domino’s introduces new products on a quarterly basis, and the brand has been experimenting with a range of different varieties - including a new Peri Peri range, which launches today.
“What has encouraged us to do more and more exciting topping combinations is people’s increased interest in food over the last five to 10 years. This is the MasterChef generation - that’s really what we’re embracing,” he says.
Despite serving up pizzas that diverge from the typical ham and pineapple, Meij reiterate Domino’s products aren’t gourmet.
“We sell what would be considered premium products,” he says.
“Our philosophy has always been to democratise great food, to take things that you might buy in a premium restaurant and make them really affordable.”
Images: Domino's, Domino's Australia Facebook page.
EXPANSION
Domino’s opened its 600th Australian/New Zealand store at the end of last year, and it has firm expansion plans for the future.
“We’ll be opening 50 stores in Australia and New Zealand over this financial year. We've had a very good first half - we have basically already opened just over half of those stores,” says Meij.
“We’re having our strongest store opening growth since 2005-06.”
Over the next four years, Domino’s aims to open its 800th store across Australia and New Zealand.
Meij attributes the brand’s continued expansion to its sales performance, product offering and digital prowess.
“Between our product, digital platforms and reimaging of our stores to ensures Domino’s continues to look fresh and relevant, we’re getting a lot of good growth.
“We are Australia’s most sophisticated digital retailer, almost 60 percent of our sales are made online, and more than half of that is mobile,” he explains.
TECHNOLOGY THE FOCUS
Much of Domino’s time was devoted to product in 2013 (the brand launched its ‘game changing’ Chef’s Best range) however technology will be at the forefront in 2014.
“Yes we do have some new, innovative pizzas and side items coming but we are investing in technology more than anything.
“We are spending a record amount on digital development this year to ensure we continue to lead in the space.”
Meij remained tight lipped as to what the technological developments are, however he said the brand’s first instalment will launch in March, and we can expect another by the middle of the year.
THE PIZZA INDUSTRY: MEIJ'S VIEW
Meij describes the pizza industry as “dynamic and exciting,” and welcomes the gourmet pizza chains.
“I think we will continue to see on one fringe there is a lower volume of business but we will see the gourmet chains continue to grow.”
He sees price point as a key differentiating factor between Domino’s and gourmet pizza chains, and doesn’t see them as a threat.
“They are really good for the category, when you’re paying twice to three times as much for a gourmet pizza it’s a very different pizza experience.
“A Domino's customer is buying significantly more frequently because we are a genuine meal replacement, we are not a treat in a sense that it’s a priced out there treat,” he says.
“We want the gourmet chains to be successful because they bring more attention to pizza overall and when people see the difference in prices there is obviously going to be a lot more Domino’s experiences.”
HEALTHIER ALTERNATIVES
Meij stresses Domino’s isn’t trying to portray itself as a destination for people on a diet; however the brand’s pizzas are much better for the waistline today than in the past.
“Our fastest growing consumer is women with kids because we’ve made the product healthier than it once was,” he says.
“We’ve been pulling the fat out of our product; our mozzarella is a 30 percent fat reduced variety - that’s standard on every pizza, we’re the only pizza company to do that. The product has a lot less fat, sodium and preservatives than it once did - it’s just much better for you.”
PRODUCT INNOVATION
Domino’s introduces new products on a quarterly basis, and the brand has been experimenting with a range of different varieties - including a new Peri Peri range, which launches today.
“What has encouraged us to do more and more exciting topping combinations is people’s increased interest in food over the last five to 10 years. This is the MasterChef generation - that’s really what we’re embracing,” he says.
Despite serving up pizzas that diverge from the typical ham and pineapple, Meij reiterate Domino’s products aren’t gourmet.
“We sell what would be considered premium products,” he says.
“Our philosophy has always been to democratise great food, to take things that you might buy in a premium restaurant and make them really affordable.”
Images: Domino's, Domino's Australia Facebook page.
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