For those who aren’t aware, My Business magazine is a monthly publication aimed at business managers and owners with a circulation of 40,000 and a readership of 105,000!

It was just fantastic to see it appear as we actually had a couple of false starts over previous months. The current edition is a great spot for it as it is also the franchise feature edition so I do recommend getting a hold of it.

My Business Magazine Editor, Simon Sharwood and the team saw just how much detail ‘Buying Your Franchise’ contributes to the available knowledge out there to help people through the process of buying their franchise for the best possible result.

So, we put together a decent snapshot of the key points from each of the ten contributors in book 1, Buying Your Franchise to give potential buyers a handful of key points on each of the key topics associated with making the buying of a franchise happen.

The full four-page coverage in My Business has already given Shaking The Profits From Franchising some fantastic attention after only being released for just a few days – so we are certain to be helping potential franchise owners as we speak get closer to their dream of owning their own business….and that’s great!

Thanks again to the team at My Business!

My Business Magazine March 2011

Learn how one established franchise grows sales by over 35% in 7 days without a promotion

It is only about 20 pages long and it details ten steps that were taken by a franchisor I spent some time with to achieve really remarkable results in the businesses it was implemented it in. I highlighted the 35% sales growth in 7 days figure in the title to this post, but that was just the average result across all of the businesses the process was implemented in.

200% Sales Growth!

I kid you not – 200% sales growth (compared to the business 3 month sales average) was the astounding record that this process achieved for one franchise owner! It really wasn’t rocket science and it was intentionally always done without promotional activity so that the franchisor could prove to the franchise owner that the potential was there in the business.

It makes interesting reading how they did it so I highly recommend you grab your free copy of Remarkable Sales Growth For Your Franchise here.

On Sunday of last weekend, myself and a few mates made our way up to Brisbane from the Gold Coast (about 1 hour north) armed with shovels, brooms, buckets and a gurney to try to at least provide some help to what we have all seen on TV as a truly massive cleaning and re-building task.

It really was quite strange to be driving toward what we knew were devastated areas by passing through surrounding untouched areas that were going about business as if nothing had happened. I suppose you expect that everyone and everything had stopped – thankfully, this is not the case.

We went out to one of the worst areas hit, Goodna, a suburb of Ipswich. This suburb was the one many would have seen the images of where the businesses like the McDonald’s by the highway were totally underwater.

The caravan park on the way in was an absolute disaster zone with dozens of peoples homes scattered like toys throughout. A sobering site was to see a park bench wedged at the top of a tree (photo below – centre tree) – this really gave us a feeling of the magnitude of what happened right where we were standing.

Park Bench Goodna

We dropped into the St Ives shopping centre to see if we could assist a franchise owner whose business had been inundated, as it turned out an army of volunteers had already powered through that task.

St Ives Shopping Centre

The store owner asked if we could come out to where he lived at Karalee a suburb about another 15kms away – and one that is unfortunately right in the spot where the Brisbane and Bremer River’s meet. These were the two big water systems that caused all the damage so you can only imagine what the residents of Karalee went through.

We first stopped to help residents on Queensborough Parade, Karalee. It was a hive of activity as I estimate that every house along the street had at least 15 – 20 people working on them. Practically nothing in the houses was salvageable and the piles building up down the whole street were very obviously peoples’ entire lives on the nature strip.

It takes 9 months to build, and then only about 5 or so hours and 15 – 20 people to totally gut a house. This was the story of the day – once a house, now just a timber frame with tiles on top.

Multiply this by about 15,000+ houses and then you get a picture of what is happening up here.

There were so many helpers that we were literally getting in each others way as there is such a tremendous spirit flowing through the entire region with so many pitching in to help.

We decided to move on further down the road and the drive down took as right along side the Bremer River which by now looked so calm and un-threatening. That was strange.

Further down, South Queensborough Parade has been utterly devastated. As it happens the Governor General, Quentin Bryce was there on that day to visit what is said to be one of the worst affected areas – so we were in the right spot.

South Queensborough Parade Clean Up

After a number of proud home owners knocked back our offers for help, instead encouraging us to go further down the street to help, we ended up in Stuart Court.

We spent the next few hours with ‘Mel’ and her husband. Mel is a policewoman. I actually feel a little bad not knowing her husband’s name but he hardly said a word and kept to himself, and as far as I could tell, never came inside the house.

Their house was almost totally empty of possessions – that was all out the front in the driveway waiting for the Army bobcats and tippers to scrape them off the ground and take them to a landfill.

We gutted Mel’s lounge room, bedroom and laundry while others did the rest of the house. We removed all the heavy, stinking, soaking wet plaster off the walls, the waterlogged insulation bats and piled it all up in the driveway with the help of so many friends and volunteers.

If it was your house, would you come inside to see that?

Stuart Court, Karalee

The water came up to roof height in Stuart Court. Mel and her husband and their two beautiful Bull Mastiff dogs had to swim out – she said she thought they were going to die, several times. They swum out of the house with the dogs and got to some higher ground and tried to get into a 4WD which they quickly found was seriously unstable. They climbed out and raced to a 3 story house where the water then rose up to the third level.

An emergency call saw them rescued 2 hours later by boat. Incredible.

There are literally thousand’s upon thousand’s of stories like this. It was a very moving experience to meet these people and see them coping so amazingly well with what is just, devastation. I have no other words to describe it.

When it was time for us to leave and return to our comfortable, dry homes, can you believe that Mel and her next door neighbour wanted a group photo of us all – to remember US!

That was quite an emotional thing – we helped them for just a few hours while knowing they have months – actually, years of re-building their lives ahead of them, and unbelievably they were humbled by the help…..amazing people as we were the ones humbled.

I have uploaded a few photos of the area just to give you an idea of what is needed to be done, and will continue to for a long time into the future. I hope they give you a little more perspective of what is happening in the not so high profile back streets and areas of the entire region.

South Queensborough Parade

Please do give what ever you can so that the thousands of families can re-build and get their lives back on track at http://www.qld.gov.au/floods/donate.html

Our thoughts are with them all.

Your Opportunity to Get Noticed

You should be trying to take advantage of the space left and grab some coverage for your business.

Firstly, Sue’s advice is to basically have a go as so many talk about wanting some PR for their business but don’t really take action to make it happen. Trying once is not enough, you have to be persistent.

Secondly, have an ‘angle’. The fact that you serve great coffee, bake tasty bread, or mow the best lawns in town for example, is not newsworthy. So, short of having an event like winning an award, or something happening out of the ordinary, you need to come up with an angle that is worth reporting on. Now is a great time of year to find that angle!

Your Publicity Angle

Cast your mind back to last year and just think of the number of Christmas and New Year related stories you saw or read. Sue made a great point that the role of the media is to report and reflect on what is happening in culture and society at the time – the festive season and christmas spirit is now…so that is newsworthy.

Maybe you are taking your whole team christmas caroling, or baking product for charities on christmas and you have been doing it for years, placing a christmas wish tree for disadvantaged children in your store, or adding a Christmas present to the value of $X to be opened on Christmas day with every widget bought!

The angles and possibilities are endless so its time to be creative. It is the perfect time of year to introduce yourself and develop a relationship with your local paper and media. You can then build on this going forward and grow your business’ profile at the same time.

Good luck!

But do they?

The dynamic of the relationship between franchise owner and field support manager can be a complex one. I did it for some time and it really can be a challenging task to juggle compliance ‘policeman’ with supportive business coaching and development.

The more I have thought about it since being out of direct field support management for franchise owners, the more I conclude that a coach for many franchise owners is the answer.

In all my years in franchise operations and field support, I only ever heard of one franchise owner who had a business coach. Unbelievably, that is one business out of 600+ franchise businesses.

That just totally blows me away!

What’s Good About A Coach

The great thing about a good coach is that they:
- Are independent (so they are only focused on you and your business growth)
- Serve one person – You (never any doubt about their intention or agenda)
- Are a qualified true outsider (so they can see things you can’t and probably that your field manager won’t either)
- They give you focus (let you know when you are not paying enough attention to the things that matter)
- They hold you accountable for results (make sure you take the actions you need to grow your business)

Why Would You Need One In A Franchise?

Why Not? A relatively small investment to a potentially very significant return.

It just doesn’t make sense to me. We are all after the best possible return on our business – correct?

Forget about the “every top athlete has a coach” example for justification. I see the best in business with either a coach or mentor specifically engaged to take them to the next level and beyond. They plan with them, they challenge them, they confront them to operate better businesses than they could ever dream.

I personally never had a coach or mentor until only 2 years ago when everything changed for me. Now I can’t imagine what I’d be like without one.

Here’s the thing. My coach has a coach, and a mentor!!!!!

Even though they are enormously successful, and multi-millionaires in their own right, they are always looking for guidance to take them beyond their current performance. A coach does that for them.

I’m raising this because I passionately believe it is a very important subject that will contribute immensely to growing an amazing wave of super successful franchise owners.

Franchise owners who don’t just rely on their franchisor for guidance and advice, but instead look at everything around them, for the next advantage and where ever that may come from.

Franchising is fantastic because it’s always an exciting environment with new challenging concepts and cutting edge approaches to everyday problems becoming tomorrow’s franchise businesses. But somehow we then tend to become a little insular and stale and think that we have all the ideas, answers and knowledge we could ever need – so we stick close and only look into the franchise system for guidance and growth.

Look outside the square, I reckon you will be very surprised at the value that a fresh set of eyes and perspectives that a qualified coach can bring to your franchise business.

What Your Field Manager Probably Won’t Tell You

Put simply, the biggest impact on your chances of success are how well you leverage and take advantage of the resource of your field support manager. This is your foundation for success. They are your daily contact with your franchisor so a lot hinges on how well you have their ‘buy in’.
This is a different take on it for many people, as everyone always wants to talk about field managers trying to get franchise owner’s to buy in, and that this is the key to growing a franchise business.
Not true – its your business, you drive it and you’re steering the ship. What’s all this talk about trying to get your ‘buy in’? You bought into the brand and the system so you should be well and truly ‘in’ – if not, its best you get out.
But that’s a whole other story.

A Formula For Leveraging Maximum Value From Your Field Manager

Field Manager Max Value To You = Connect & Engage in Deep Collaboration

In my experience, so many resources go untapped by franchise owners, so this is about getting access to all of them through your field manager to grow.

How Do You Do This?

Connect – The first step, announce your intentions and draw a line in the sand with anyone you have direct contact with about your plans and how you have appreciated and will continue to appreciate their support.

Engage – The second step, bring those same people in on your plans for your business and request their input into your strategies. You are turning the tables as you are getting ‘buy in’ from your franchisor and not the usual other way round that they would be used to. You are changing the psychology here.

Deep Collaboration – The result of the first two steps being a committed ongoing relationship where you involve them heavily and continually in your plans. You are responsive, appreciative, respectful and supportive of them in their efforts.

Adopt this as a culture and attitude within your business and you will reap the rewards. All those other strategies to work on now have a solid foundation for you to implement.

Don’s is an amazing story with a career path many would dream of, going from delivery driver to CEO of the company. He is at the helm of a publicly listed company that has the rights to Dominos in 5 countries and 800+ locations reaching as far as Europe.
The story of the way he came to contribute to the book says a lot about Don and his company.

How I Got Don To Agree To Contribute

I ‘sounded’ him out through someone I know in Dominos late on a Saturday afternoon.
I expected to wait a few weeks to get some progress on it but I asked my buddy in Dominos “how long do you think it will take before I know?”.
His response “Mate, Don is a machine who works so hard that I’ll be surprised if you don’t get an answer tonight”.

I had an email response later on Saturday evening that Don has agreed to be involved and that he had the following times available next week…..
No mucking around, no delay, just straight to the point.

We set an appointment for later that week and we spent a couple of hours in an interview and we were done! I sent it back to him for pre-print approval and it came back within two days and had just one typo change from memory, and that is it.
He is a very impressive man with an imposing record.

But what impressed me most of all, and the point I’m sure he’d prefer I got across was his passion for his company, and especially for it’s franchise owners. Referring to himself as ‘Chief Enthusiasm Officer’, I have no doubt what so ever that he could talk for days on end about what is great about his company! (and he warned me he could)

Don talks of ‘the Dominos family’ and he also talks a lot about two other key things, fun and profit for all stakeholders in the business. In my brief time with him and all that I’ve heard and seen, they deliver on this.

In franchising, to retain this passion for the business at the level Dominos is at, I think much can be learnt and admired in the way Don Meij goes about his work.

It was a well organized and great event put on by the FCA, but the biggest question I have from my experience is “Where were the franchise owners?”. Sure there were a handful around, and I mean “a handful” of very keen franchise owners no doubt looking for every advantage they can find to make their business more successful – and power to them.

I Know You Think It’s Not For You

I get the fact that the great majority of franchise owners view the FCA Convention as a ‘franchisor’ event. That was clear to me in my days inside franchise companies as this was often made quite clear.

So for the ‘handful’ of franchise owners that were there, are they the true entrepreneurial types looking to squeeze every advantage that they can get their hands on?

I reckon they must be.

One of the key note speakers Craig Rispin (Futurist), made an observation about the great Steve Jobs of Apple fame, when he talked about innovation and gaining an advantage on your competitors. Jobs said many years ago to a keen group of Apple employee’s “Look at what everyone else in your market is doing – and then go in exactly the opposite direction.” or words to that affect.

What’s this got to do with a lack of franchise owners at a franchise convention you ask?

Well, the Griffith University statistics on franchising presented on day one in their Franchising Australia 2010 research, say that their are 62,000 franchise businesses in Australia.

So my guess is that those ‘handful’ of franchise owners who left behind around 61,950 of their peers by being at the National Franchise Convention are obviously “doing a Steve Jobs”.

Given their commitment to access information on improving their business, my money is on those franchise owners to take their businesses above and beyond.

More later on why I believe you should be pencilling in the next FCA Convention In Melbourne on October 9, 10 and 11, next year in Melbourne!

I’m certain more franchise owners would get value, but even more importantly, you would bring value as well…..

Now with me not being at all close to, nor having had anything to do with Allied other than eating the occasional ice cream with my boys, I can honestly say I am mostly just a very interested yet concerned observer of what is happening. But this much seems clear to me:

• Regardless of all the claims of potential economies of scale, the brand stable shows a lack of focus by the franchisor,
• I can’t see how resources can be most effectively & efficiently used with that lack of focus,
• I’d reckon field support staff would have been stretched beyond their limits and capacity to help franchisee’s as much as they wanted to,
• There is a huge amount of angst within the business that has been building for some time.

So the Cookieman brand with its 50 stores is in liquidation and up for sale, and Baskin Robbin’s as I understand it for Allied Brands, is either in the process of, or at least in serious danger of loosing the rights to operate that brand in Australia.

So How Do You Protect Yourself?

By “protect yourself” as a franchise owner, I mean protecting your investment in your business to ensure you get your targeted return – just as any investor should.

My best advice to protect your self is two-fold and simple:

1. Continually hold your franchisor accountable to their obligations and commitments, and
2. Continually allow your franchisor to hold you accountable to your commitments and obligations.

No franchisor worth their salt should be afraid of being held fairly, maturely and professionally accountable if they can expect to be able to do the same with their franchisee’s.

Now this is a fair deal.

Keep in mind though that we are all human and some things are not always going to work out how we planned or wanted. But we can also all quite easily judge the merits when this happens.

What this arrangement does is that it ensures that both parties are focused equally on what really matters – growing each individual franchise business, which in turn gives strength to the entire system.

My Read So Far

My reading (and it appears that of the media) of the Allied Brand’s mess so far is that accountability is a significant issue. Where this will end up is anyone’s guess but I think we are in for some very eye opening allegations, action and discussions in the foreseeable future.

I just hope that the value of the many individual businesses involved can be protected as much as possible through careful and considered actions by all parties involved.

Many franchise businesses need to consider the effects market maturity and subsequent change amongst the other players will have on their future. The type of store that you opened 10 to 15 years ago could be a far cry from what the market demands today.

What can we learn from the oil industry?

My background was from the oil industry, and you don’t have to be Einstein to know it is becoming harder and harder to find a service station these days. The changes have been bought about by quite a few factors over the last 30 years. These include the change to self serve, customers going away from smaller cramped stations to large convenience stores, and the value of the land that many smaller stations were on.

In 1970, there were 20,000 retail sites, which by 1995 had reduced to around 9,000. There is no national register of service stations that is readily available, however according to the Australian Institute of Petroleum’s 2003 report, there was still in excess of 8,000 service stations.

While we can attribute many reasons to the changes, the biggest reason within the oil companies was the need to be more cost efficient in selling petrol. Self Serve was the first major change – how to cut down labour by training the customer to do the job themselves. After that major change, we came to look to other ways of improving efficiency in moving fuel from the Fuel Terminal into your car.

In looking at service station efficiency, a common indicator that was used was what was each companies’ market share % compared to the % of sites they had in the total market. The drive was therefore to have fewer sites pumping as much volume as possible.

In a mature market, with multiple competitors, and a free price setting system, you come down to a situation that the efficient survive, and the inefficient can no longer afford to remain in business. It becomes a change or perish mentality especially in a market like petroleum where the price you sell the product for is so transparent (2 meter high price boards).

When I joined the oil industry in 1978 there were 9 companies. Now we are down to the 4 majors, being Shell, BP, Mobil and Caltex. Back in 1978 we also had:

• Amoco – bought by BP
• Golden Fleece which was bought by Caltex
• Total which was bought by Ampol
• Esso that was bought by Mobil
• Ampol which merged with Caltex.

Is this a good example of an industry rationalising and the less efficient being swallowed up?

In today’s mature market, we see the thrust for efficiency with 2 of the 4 majors creating strong liaisons with the 2 biggest supermarket chains in Australia, namely Shell and Coles Myer, and Caltex and Woolworths / Safeways. It was no real surprise, as this is what happened in the UK and Europe over the last 20 years.

This new rationalisation therefore leaves 2 players out on their own, and I can only say we shall watch with interest as they also need to try and match the retail efficiencies now being created by Shell and Caltex.

Can this be happening to you?

Similar changes have been happening in the hardware industry for example. What effect has Bunnings had on small hardware stores across Australia, and even on the large membership co operatives such as Mitre 10? Again you don’t have to be Einstein to see the change in the offer, and effects it has had on the smaller business.

The retail electrical business has gone from one where a 500 sq m shop was a large shop 20 years ago, to where the likes of Harvey Norman and The Good Guys amongst others are building standard stores of 2,500 – 4,000 sq m, and offering a complete range of electrical goods in each store.

Take a look at the business you are in and start considering if this is happening to you. What steps can you take to NOT be the inefficient operator in the industry, and therefore forced to follow the 5 defunct oil companies mentioned into obscurity and the pages of history?

Analyse your cost structure

I believe you need to break your cost structure down and analyse it against that of your industry in these simple terms:

1. Buying or manufacturing costs
2. Head office overheads
3. Retail distribution costs and efficiencies

Whilst you could break this down into smaller segments, let’s start here for now.

1. Buying or manufacturing costs

All businesses must try to remain as competitive as they can in this area. Whilst not my field of expertise, I do note some of our larger clients are now bringing in goods for retail from China and India, and it is always an area that needs continual review. If your COGS is equal or better than your competition, it is a good start!

2. Head office overheads

This is an area that you must see value for money coming out of. I do not believe in a “cut and burn” approach, rather value for money. My oil industry experience was always that in time of low profit, slash the staff, cut training and cut all promotional activity. The long term effect especially of cutting staff and training was always a couple of years down the line where our “new” field staff were out there without the basics, and very costly errors were made. In a franchise business I would see it as prudent to set some KPI’s relating to Head Office staff numbers and total costs as a % of sales, and see how you feel you compare to your competitors. Large companies often have Annual Reports from which you can glean the base information and evaluate.

3. Retail Distribution costs.

Network Planning should take into account new store opportunities, as well as rationalisation. In the oil industry, a rough guide was to close 3 poor performing service stations and use the return from the asset sales to build one modern service station. That is why the valuable small inner metropolitan sites have disappeared, and the new sites are large, with the full Convenience Stores, in the middle and outer suburbs of the main capital cities.

With many of our clients, we now are working to classify sites as to their suitability to what we see as the future marketing requirements. It is then a matter of management decisions to what the Network should look like in 5 and 10 years from now.

It appears obvious to me that one of the largest changes to retail marketing at the moment is the advent of the Home Maker Centre. Very few large shopping centres are being built, and what new retail we see in the market is often a supermarket of around 3,500 sq m and 20 specialty stores in the growth suburbs, or Home Maker Centres.

Many retailers are moving to larger format stores, and then participating in these new Home Maker Centres, which will mean a reduction in the smaller format stores that may have been their traditional offer.

The Home Maker Centre’s $ per sq meter rental is normally lower than in a shopping centre or strip, the size of the retail space allows a “full offer”, and the manpower in terms of sales can be significantly lower. Combine this with the overall pulling power of the Home Maker Centre, and we are seeing retailers occupying quickly the new space that is coming to market.

This transition from smaller stores, often in expensive shopping centres or on prime land, into new large format stores can bring about new efficiency in the supply chain, and assist in the bottom line of both the Franchisor and Franchisee.

Summary

As markets mature, what was the original “offer” may no longer be what the customer wants, nor may it still be an efficient way of distributing your product. Strategic Network Planning should be considered on a large scale to not only look at new opportunities, but also to move with the times where necessary, or run the risk of extinction for being too conservative.

Peter Buckingham is the Managing Director of Spectrum Analysis Australia Pty Ltd, the leading Geodemographic and Retail Sales Modelling Company in Australia. Spectrum assists many large retailers and Franchisors in better understanding the retail market from a site and area selection view.