Testimonials on what makes a valuable franchise
Now that we’ve covered how buying a franchise can give you the independence of owning your business with the security of backing from a large company and how to start a franchise, we thought we’d share some franchising success stories to inspire and lend insight into best practices. McDonald’s Australia, which operates nearly 1,000 stores, attributed the fast food chain’s success to what chief executive Andrew Gregory refers to as the “three-legged stool.”
“Our way of doing franchising is best summed up by what we call the three-legged stool,” Gregory said in a parliamentary hearing. “McDonald’s is one leg, the suppliers and franchisees are the other legs. If one leg of the stool is not strong or not growing at the same pace or breaking, then of course the stool falls over and it fails.”
This philosophy keeps all parties happy and in a mutually beneficial partnership. It’s a big reason, Gregory said, that the average tenure of a McDonald’s franchisee is 28 years. “We are not always successful; no way do we make every business decision to be the right one,” he said. “No business person can claim that, but over a long period of time we have made more right decisions than wrong.”
That kind of support is all you can hope for from a franchisor. Below are other examples of successful franchise partnerships:
Hire A Hubby
Hire A Hubby franchisees won three awards at the Franchise Council of Australia’s 2018 Excellence in Franchising Awards. Jim Kelly and Crystal Petzer, owners of Mona Vale and Narrabeen franchises of the handyman service, won New South Wales/Australian Capital Territory multi-unit franchisee of the year. They attributed their success to a combination of knowledge and passion, plus a solid plan from the parent company.
“Together we’re a really good combo,” Petzer said. “Jim’s skills are that he’s amazing with the customers, they all love him, and he’s great at managing the staff side of things. I’m awesome at the marketing and business side. We love the brand, we find time to promote the brand and we’re passionate about the brand.
“The franchisor has a really good system and we follow that system to a T. Maybe that’s our secret — we take that system and we work it.”
Dan McKenzie owns Kwik Kopy Miller Street in North Sydney and won the NSW/ACT franchisee of the year for stores with two or more staff. McKenzie took over a store that was ranked dead last out of 100 Kwik Kopy stores and made it No. 1. He credited the network of fellow franchisees for the turnaround. “We’re a local business, but being part of a national franchise system means we benefit from the support of the entire Kwik Kopy community,” he told ProPrint.
“To win this NSW/ACT FCA Excellence in Franchising Award within four years with a fantastic team and wonderful support blows my mind, actually,” McKenzie said at the awards ceremony.
ANZ Mobile Lending
General manager Kate Thomson was recognised as NSW/ACT franchise woman of the year. From a franchisor’s perspective, she said ANZ Mobile Lending’s focus on supporting its franchisees ensures a rising tide lifts all boats.
“We’re always looking to recognise our franchisees, particularly our women franchisees, and encourage them to grow and develop and recognise them for their contributions to our business,” she said. “The thing that gets me out of bed every day is to make the business that little bit better for our franchisees. As long as the business is moving forward and we can see growth and improvement, then we’re really happy with what we’ve done,” she said.
Digital Stack doesn’t have franchises of its own, but the franchise marketing platform has worked with enough to know what makes a successful one. “The most successful franchises often demonstrate the highest commitment to engaging with local communities both online and offline, creating value for existing and new customers through sharing customer stories/experiences, value-add promotions and retention campaigns – which may need to differ depending on the local catchment,” CEO Peter Harris told Business Insider.
Franchisor flexibility is also key, Harris said. “Each location needs the ability to tailor their marketing for their own catchment,” he said. “One location might live off an adjacent business park, while another is wholly dependent on transient tourists.”
A good franchise stays ahead of the curve, Lift Brands Asia Pacific CEO Ty Menzies told VENTURE. “No matter which brand you go with, we are always looking at what’s next,” he said. “If you invest in the Snap Fitness brand now you may be investing in a 9Round in six months’ time in your same territory. In 18 months’ time you could be investing in something completely different that we’re developing in the pipeline. We’re not just a one-stroke wonder. We have opportunities that go outside one set brand; even with that one brand we are always developing to stay both relevant for our members and progressive within the industry.”
Passion for the product is just as important in a franchisor as a franchisee, he said. “I’ve been both a franchisee and franchisor, and I think the biggest piece when looking to invest in a franchise is to understand the leadership that comes with the franchise you’re investing in. How invested in the business are they? What’s their background? Are they interested in what they do? I’ve been passionate about health and fitness since I was 20 years old — actually even younger — so for me that’s an important part of who you’re partnering with.”
Fitness is definitely a popular industry to be involved in, but you still have to do your homework on which company to work with. Belinda Szalinski, owner of an F45 gym in Bentleigh, Victoria, says doing your due diligence pays off.
“Research is very important,” she told Business Insider, “and finding out the background of the franchise you are looking at. Getting the financials, start-up costs, and growth potentials help with making the best decision for you. Speaking with other franchisees is another avenue to get a better understanding on how the franchisor operates and the support you will receive during set up and ongoing operations.”
Set goals and keep them, Poolwerx founder John O’Brien says. “Your No. 1 key performance indicator should be average franchisee profit,” he told Fast Company. “If you focus on that, your other problems will go away, and everyone will be happy. I have never been to court with one of my franchisees.
“We have a constant 10-year rolling plan. We created the last one in 2010 called the 2020 plan, and every year it rolls on for another year. Every single franchisee creates a five-year plan, and every year they re-do that plan with their business development manager, while also doing quarterly reviews.”
Gloria Jean’s Coffees
“What struck me about Gloria Jean’s Coffees was the minute we opened the door, people just streamed in,” franchise owner John Giovas told the Sydney Morning Herald. “Everybody just knew Gloria Jean’s Coffee. People knew what to expect. There is a lot of power in the brand if you pick the right one. It makes the process much simpler and validates the franchise fees.”
That consistency flows from the top down. Giovas said Gloria Jean’s model “includes lots of tools and processes with things like online web training. We’re very dedicated to staff doing that training, it’s a mandated requirement that we have fully trained staff.”
A quality product that fills a need, combined with relentless drive, doesn’t hurt. Specsavers sells designer glasses, and each franchise is jointly owned by an optometrist and a retailer. This blend of medical and business expertise has helped Specsavers capture nearly 40 per cent of the market share in its field.
“When people come into your store, they are looking for value, but value is not all about price, it is about quality of the product and how easy it is to access the brand,” global retail director Derek Dyson told Smart Company.
When Specsavers came to Australia, it opened 100 stores in 100 days. It was no accident. “You cannot open 100 stores in 100 days without great planning and great execution,” Dyson said. “Unless you can execute, it’s not a strategy, it’s a concept.”
Jim Penman needed some extra cash whilst studying for his PhD in history, so he started mowing lawns. Today, Jim’s Group franchises just about everything, from antennas to window tinting. How did a business that began with $24 grow into having thousands of franchises? Just plain caring, according to Penman.
In his book “What Will They Franchise Next,” Penman recounts seeking advertising help from Peter Rancie.
“He had done nothing to sell me on his business, yet he had given me the most powerful sales pitch of my life,” Penman wrote. “Because his sole concern had been my welfare and the success of my business. So, I felt I could trust him. And then, just as I reached the car and leaned over to open the door, I figured out how to sell lawn-mowing rounds. This idea, this flash of inspiration, this blinding light on the road to Damascus, was the key to all that followed.”