Franchise Everything

Many people looking to invest in a franchise business are not ‘sufficiently across the numbers of their investment’ according to Peter Knight, one of the country’s leading franchise Accountants.

In the first of our ‘Explainer’ series formats in the podcast, we asked Peter to join us to zero in in a succinct manner on the key factors in assessing the ROI of a new franchise business. That is one that has not traded before and is a new location.

This is as distinct from assessing an existing franchise business ROI which we will look at in a later episode.

The episode is a live recording from the Franchising Business Opportunities Expo in Melbourne, featuring Peter, and we focused on;

- Challenges with New Franchises: New franchise locations, or "Green Field" sites, lack existing financial data, making it challenging to predict profitability. Accountants have to estimate costs such as rent, wages, and other expenses from scratch.

- Cost Estimation Process: Key costs include rent, wages, superannuation, insurance, finance charges, and other operating expenses. Accurate estimation involves obtaining detailed information about these costs specific to the new location.

- Disclosure Document Limitations: Franchise disclosure documents provide general benchmarks and percentages but may lack specific details relevant to individual locations, making it crucial to gather precise figures for a new franchise.

- Decision-Making Styles: Potential franchisees often fall into two categories: those who are emotionally invested in a brand and those who over analyse every detail. Both approaches require careful balancing of passion and thorough analysis to make informed decisions.

00:00 Introduction to the podcast and guest, Peter Knight, The franchise accountant.

0:47 What Peter sees in the market and accountants view of new franchises

2:06 Benchmark data from existing franchises

2:58 How does a person enquiring for a franchise get the information? The problems with it.

3:44 Working out the wages and rent and cost of goods sold

4:16 Next step in the process to come up with the target sales figure for the owner to cover expenses, finance and how much the owner wants to make

4:48 The level of knowledge of buyers

5:22 How much do you want to earn and over what time frame?

6:29 Sees two approaches or types of people asking about a franchise

7:40 Identifying the key factors in information for profitability

9:22 If those numbers are not very good but people are still in love with the franchise

10:28 What does he tell franchisors in circumstances where the numbers are challenging

11:19 The benefits for the franchisors with a financial basis to work off

11:42 Wrap-up

Podcast Produced by: www.magneticbusinessmedia.com.au

Franchise Stories and Knowledge Base (our other website): www.franchisebuyer.com.au

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YouTube:  https://youtu.be/eEYyHb1uhhY

Meron Sleiman is the Master Franchisee of Victoria for the Urban Clean Commercial Cleaning brand.

Meron runs the business with his brother Kameran, and they have been in business together for 20+years.

They found Urban Clean almost accidentally when looking for a cash flow business while they were in the process of exiting their fast food franchise business that they owned.

The demanding hours and lack of family time is what led the brothers to look for another business and get some more control over their lives. Initially the desire was to purchase only a single unit exclusive territory franchise with Urban Clean while they planned their ‘next move’.

However, it was not long after getting involved with the business that they saw a much bigger opportunity was possible than they anticipated, and quickly purchased the Victoria Master Franchise rights.

The lure of the business of commercial cleaning became too strong after they quickly understood how the business can scale.

Meron’s story is one focused on family, and a desire to ensure his franchise partners are as successful as they can possibly be.

00:00 Introduction to the podcast and the live setting at the Melbourne Franchising and Business Opportunities Expo.

00:23 Meron’s position as the Master Franchise Owner for Urban Clean in Victoria.

00:50 Urban Clean Business Overview with a focus on commercial cleaning and the distinction from domestic cleaning.

01:27 The main differences between domestic and commercial cleaning.

2:24 Starting as a Master Franchise Owner Meron describes his initial plan to own a single territory and how it expanded to owning the entire state of Victoria.

03:19 Transition from a fast food business to cleaning with Meron's background in the food industry and the reasons for transitioning to the cleaning business.

04:36 Working with family as Meron discusses his experience working with his brother, Kameran, for over 20 years.

05:07 The process and reasons for exiting the fast-food franchise business.

06:06 How Meron discovered Urban Clean and why he decided to invest in it.

07:45 Early challenges in transitioning to the commercial cleaning business, including sales and operations and becoming the Master Owner of Victoria.

08:46 Supporting and mentoring franchisees, and the potential for financial growth within the Urban Clean system.

09:11 Money in cleaning as a service business and the goals franchisees set for themselves

10:41 Meron's role in recruiting and mentoring new franchisees in Victoria and what they look for.

11:24 Emphasis on building strong relationships with customers as a key to success in the cleaning business.

12:45 A day in the life of Meron and Kameran, including franchisee support.

14:42 Discussion on the growth potential for Urban Clean in Victoria and the ongoing recruitment efforts.

15:55 Meron’s vision for the next 3-5 years, focusing on dominating the commercial cleaning sector and helping franchisees achieve financial independence.

17:24 Wrap up

Podcast Produced by: www.magneticbusinessmedia.com.au

Franchise Stories and Knowledge Base (our other website): www.franchisebuyer.com.au

Listen or Watch on;

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YouTube: https://youtu.be/thN9ZWBvODM

Andy Pham is a Soul Origin multi-store franchise owner. Soul Origin’s mission is to bring ‘good times and delicious food and barista, crafted coffee’ in over 150 locations across Australia.

We explore Andy's journey from working as a barista in Sydney to owning multiple Soul Origin stores across Queensland.

Andy started his journey with Soul Origin eight years ago, initially working for franchise partners before opening his own store.

He moved from Sydney to Queensland and gradually expanded his operations, starting with a store in Helensvale and later acquiring stores in Garden City and Brisbane Uptown (Previous Myer Centre CBD). He is currently preparing to open his third store at Fortitude Valley train station.

Andy emphasises the importance of effective staff training and trust in managing multiple stores. He believes that training and empowering staff are key to successful multi-site ownership, as it allows him to delegate responsibilities and focus on growing the business.

He also discusses the differences between operating in suburban shopping centres and high-traffic CBD locations, noting that each requires a tailored approach to maximise opportunities.

Andy shares insights into Soul Origin's franchise model, highlighting the strong support from the brand's central kitchen and the streamlined production process that allows franchisees to focus on customer service and business growth.

Also covered are the brand's expansion plans, including ventures into international markets like New Zealand and potential new sites in universities.

00:00 Introduction and Background

00:21 Introduction of Andy Pham

00:43 Andy’s Journey with Soul Origin

01:13 Starting in Sydney and Moving to Queensland

01:42 First Franchise Store and Experience

02:08 Challenges of Opening a New Store

02:30 Training and Trusting Staff

02:58 Growing the Business at Helensvale

03:26 Soul Origin’s Support System

03:59 Importance of Training and Staff Development

04:25 Managing Multiple Store Locations

05:18 Andy’s Second and Third Store Locations

05:50 Operating in Different Environments: Suburban vs. CBD

07:15 Soul Origin Expansion to Train Stations

07:43 Day-to-Day Operations as a Multi-Store Owner

08:16 Empowering Store Managers

08:44 Discussion on Soul Origin’s Popular Dishes

10:03 Soul Origin’s Production and Kitchen Setup

11:24 Multi-Site Franchise Ownership

12:17 Bringing Family into the Franchise Business

13:15 Future Plans and Expansion Goals

13:54 Training Future Managers

14:22 Conclusion and Wrap-Up

Podcast Produced by: www.magneticbusinessmedia.com.au

Franchise Stories and Knowledge Base (our other website): www.franchisebuyer.com.au

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The Mail Boxes Etc (MBE) franchise business is a B2B business service centre that provides a wide range of services to the SME market.

The services on offer from franchise owners in MBE range from printing, which is a large part of the business, to graphic design, street address postal service and more.

In our discussion with Clayton Treloar, CEO Australia, he provides insight into  the fact that printing technology has enabled the business to dispel the ‘myth’ that printing services are in decline to SME’s.

The larger printing offset type press in massive volume has declined significantly, while the fit-for-purpose printing such as brochures, booklets, flyers and more for business is well and truly in demand.

MBE fills this need along with many other services and support elements to the market.

Our discussion focused on;

• What the MBE brand is and does

0:00 Intro

0:31 What MBE does as a business service - a business service centre

1:15 Since covid the need for a business address while still working from home has become a key offer

1:41 MBE number of businesses globally, a large business

2:15 Types of locations in Australia, suburban and CBD

2:38 Services an MBE franchise owner offer to the market in the B2B space

3:37 Clayton was originally franchisee and eventually bought into the business

4:25 A misconception that printing is diminishing, but with digital printing the technology is enabling growth

5:35 Describing the ideal MBE franchise partner

6:32 The benefits of owning a B2B business compared to other business types

7:55 Day in the life of a franchise owner

8:40 The future and the change Clayton sees in technology in the business

9:42 Expansion and key growth states

10:32 Entry cost to invest in an MBE store is lower than likely expected

Podcast Produced by: www.magneticbusinessmedia.com.au

Franchise Stories and Knowledge Base (our other website): www.franchisebuyer.com.au

Listen or Watch on;

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YouTube:  https://youtu.be/F2-tVZnUwsk

Joe Rossi is the CEO of Town & Country Pizza & Pasta franchise business which is a family-owned, premium positioned food business in the market for more than 30 years now.

The Town & Country business is a premium positioned, yet high volume pizza and pasta offering that has had what Joe refers to as 'humble family beginnings' in regional Victorian markets.

With a solid brand built and franchise model in 13 locations throughout regional Victoria (as at Aug 2024), the timing is right for expansion of the offer into metro markets and beyond.

In our discussion around the brand on the franchise business model, we focused on;

• The family beginnings with grandmother’s recipes still in the business

0:00 Intro

0:32 How the Town & Country Pizza & Pasta brand started

1:42 The growth of the brand to 13 locations so far today

2:00 The menu and product range in pizza and pasta with family recipes still part of the business

2:51 Quality control in an ever-expanding franchise business

4:09 Planning around growth strategies as they have kept local so far

5:24 The location strategy for the brand and focusing regional, now looking to metro

6:30 Premium offering of the business yet still in high volume, and the role of delivery in the network

7:28 Chosen not to partner with 3rd party delivery apps and why

8:55 The impact of the cost base of having their own delivery resource

11:23 Positioned premium and how a tighter economic climate is managed

13:17 Wrap up

Podcast Produced by: www.magneticbusinessmedia.com.au

Franchise Stories and Knowledge Base (our other website): www.franchisebuyer.com.au

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YouTube: https://youtu.be/5FqjUDy50Tg

Paul Mitchell is Founder of the Houseproud Cleaning franchise business which has been operating for more than 25 years now.

When many talk about ‘low barriers to entry’ in business, they are for the most part thinking of low cost of entry. Paul is very aware that in the cleaning industry, those low barriers to entry that are just as important are the ability to start a business without a certain qualification or skill or strong english language skills in many cases.

The key focus of the Houseproud business model according to Paul is to ensure the business is as simple as possible, and with as much support as is needed by newer franchise partners in particular.

Paul focused our chat on the franchise business model on;

• Low entry costs and wider reduced barriers to entry

0:00 Intro

0:38 Low barriers to entry nature of the business and especially suitable for first time business owners and new Australians

1:51 Type of customers and the types of work in domestic, strata and insurance work along with NDIS and aged care

2:22 Not just cost but barriers to entry around things like language is crucial

3:50 Business sales through referrals, at 80% at one point

4:25 The model and fee structure including a no fee period while they are building income

5:21 Marketing for new owners to make sure their business gets up and moving quickly and focusing on an area close to where they live

6:10 How Paul builds his close relationships in the business with franchise partners after 25 years in the business

7:48 Franchise partner respect for Paul and the leadership in the business

9:03 What sort of support does the business provide and what ongoing help is mostly needed

10:40 The Priority Program and structured support to assist franchise partners requiring it

11:21 The operations manual of the business and the detail required

12:07 The focus for the brand into the future after 25 years in the market, and what the future looks like

13:16 Wrap up

Podcast Produced by: www.magneticbusinessmedia.com.au

Franchise Stories and Knowledge Base (our other website): www.franchisebuyer.com.au

Listen or Watch on;

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YouTube:  https://youtu.be/omOStEiN_vU

The Rubber Stone franchise business is a resurfacing business for damaged concrete and tiling surfaces. Used around pools, patios, garages, stairs and more the brand is expanding into the Australian market.

A 35+ year old family owned and run business from Canada, Jayme Kegel is spearheading the brands entry into the Australian market.

Jayme explained some key aspects to the business and focused on;

• The longevity of the brand globally

0:00 Intro

0:33 The Rubber Stone business and where it is from, a family business from Canada

1:21 International expansion and locations

1:34 What is the Rubber Stone product

2:01 Preparation to get into the Australian market from a Brisbane base

2:44 The other options being used for resurfacing who Rubber Stone is effectively competing with in Australian market

4:15 The key uses of the Rubber Stone product, pools, stairs, patios and more

5:00 The difference of surfaces used Canada to Australia

5:49 How it works laying Rubber Stone

6:58 Applications of the product to offer to home owners and the market

7:35 Experience of residential v commercial application in places like aged care homes

8:23 Being 35 years into the business, what technology have they developed and evolved

9:28 Testing for the Australian market in particular and our heat

10:32 Training provided and the type of people looking at the franchise

11:18 Landscapers can add on Rubber Stone as an add-on feature

11:33 Training time frames to get up and running

12:25 The usual needs in support for franchise owners once they are on the road

13:15 Key growth areas in Australia focusing on

14:20 Wrap up

Podcast Produced by: www.magneticbusinessmedia.com.au

Franchise Stories and Knowledge Base (our other website): www.franchisebuyer.com.au

Listen or Watch on;

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YouTube:  https://youtu.be/FR5IMRpLCLk

Stop trying to compete on price, and instead actively work to take peoples ‘eyes off the price’.

Get help from JD now to quickly grow franchise store sales with great incentive-based marketing strategies and campaigns via this link;

www.theinstituteofwow.com/franchise

According to world-leading expert in it, John Dwyer (JD) he achieves avalanche sales results for clients with incentive-based marketing campaigns.

JD has developed programs for the biggest to the smallest businesses in the country over more than 3 decades in the industry. The same principles and mechanics apply according to him whether you are Rupert Murdoch trying to increase newspaper circulation, or turf farm trying to sell more turf, or even a single hardware store franchise going up against a Bunnings warehouse opening up across the road!

And taking peoples ‘eyes off the price’ does not have to be complex at all. It can just involve a process of searching for that ‘big idea’ that will sustainably set you a part from your competition at a single store or entire franchise network scale.

A passionate ‘anti-price discounter’ as the solution to your problems, after career of seeing constant ‘races to the bottom’, JD assures you that there is always another way.

Here is amazing insights with equally outstanding results and case studies in this illuminating chat on marketing franchise locations!

0:00 Intro

0:29 exploding sale contact details www.theinstituteofwow.com/franchise

0:45 What is incentive-based marketing, giving a reward for buying your product

1:19 Why are we so focused on price reduction in business - it’s easy

2:24 Examples of incentive-based marketing out in the market right now

3:03 Case study selling out of turf using beer as an incentive

6:10 Making the worst customer the best customer

6:37 Case study the ‘ugliest backyard fence’ to sell new fencing

8:15 How you should be thinking about Facebook advertising - give away the chance to win your product

8:49 Case study on a pool slide company win a pool slide and a free holiday generating 1,600+ leads to buy a pool slide

9:41 Why businesses don’t do it more often - the mistakes businesses make, the perception of it being too difficult

10:47 The highest performing campaigns are ones where the incentive has nothing to do with the product

11:19 The variety of incentive type of programs you can run, as far back as bingo scratch cards

12:20 Insured prize promotions where you can have a draw to give away $1million and how this works

12:59 Case study lifting Fijian Holiday Resort occupancy by incentive to travel agents

14:21 Example costs of insurance prize promotions and how it works

15:51 The Holiday program, JD’s most successful promotion and Fuel Programs

17:16 The number 1 incentive in the world is a holiday and how it works

19:20 Hardware franchise goes 450% up in sales using the Holiday incentive program

20:26 How franchisors can use the Holiday program and incentives in general, and reasons they don’t use incentives

22:15 Not properly taking peoples details to build an audience to contact effectively and the impact it can have

25:00 Wrap up contact JD via www.theinstituteofwow.com/franchise

Podcast Produced by: www.magneticbusinessmedia.com.au

Franchise Stories and Knowledge Base (our other website): www.franchisebuyer.com.au

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Is a foot high traffic shopping centre is the best place for a business?

Ange Kondos is an expert in determining the answer to this question for many.

“Business has become so hard, so prohibitive, so costly I can see true entrepreneurs taking to the strips.”

Our discussion came about following seeing a LinkedIn post by Ange where he highlighted the deal numbers and performance attributes of a food business in a strip mall location. Comparing it to some typical lease circumstances faced in a high traffic major shopping centre location, we thought the scenarios was worth digging a lot deeper into.

The key factors of the business focus on;

• Rent $50-$60k - no penalty for succeeding,

Ange has some very firm opinions on the circumstances of leasing and food retail in particular in the market.

0:00 Intro

0:23 What LeaseWise does - property tenants advocacy for managing retail property portfolios

1:54 A LinkedIn post by Ange a while ago highlighting key points on strip mall profitability

2:45 What Ange is seeing in the market in shopping centre v strip malls at present

4:00 Shopping centres have been spoilt for choice as centre owner and now a shift by many to drive thru

5:10 The impact of a bad decision in a shopping mall v strip site with lower rent

5:50 The LinkedIn post example of Luke’s Viet Rolls, Puckle Street Moonee Ponds

6:15 Rent and no penalty for succeeding in strip mall leasing

8:15 Achieving great sales on low rent makes it all work for the business

9:32 Fit-out costs and shopping centres demanding too much expense for no reason

13:01 Category 1 costs at zero $, as opposed to ‘obscene’ in shopping centres

15:24 Strip mall having little requirements on you to trade at specific times, unlike a shopping centre enforcing certain hours

18:48 No extra charges for trading late in a strip mall as opposed to a shopping centre where they often require to pay more costs pro-rata

19:46 ROI being created faster quite often in a strip mall, and particularly in this example with significant goodwill advantage

21:16 Shopping malls seeing an operator doing well and seeing that as an opportunity to add another competing in the same category

21:43 True entrepreneurs taking to the strip malls into the future, particularly those that don’t need complimentary brands around them

23:45 The message is not ‘no shopping centres at all’ but to be very aware and well-advised

24:39 Don’t underestimate the power ‘no’ in leasing deals

25:03 Wrap-up

Podcast Produced by: www.magneticbusinessmedia.com.au

Franchise Stories and Knowledge Base (our other website): www.franchisebuyer.com.au

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Stephen Penfold lives a family business legacy that links closely back to the infancy of modern Australia as far back as 1820, with the Penfold family directly involved in the business since 1880.

A passionate franchise supporter who was just the second inductee into the Franchise Council of Australia Hall of Fame (FCA), and founding member of the Franchising Association back in the mid 1980’s that would go on to become the FCA, Stephen is Australian franchise history personified.

Experience through many facets of the printing industry since the 1950’s, Stephen was a spearhead of ‘flexible packaging’ into the Australian market - technology that dramatically altered shelf-life of supermarket foods, an experience that taught him the crucial role of customer relationships - a key competitive advantage.

While moving into running the W.C. Penfolds stationary division after 10 years in flexible packaging, and eventually growing it to 21 locations, the quick printing technology emergence set him and the business on a new path. An ill-fated attempt to place quick printing facilities in-store early on, resulted in the eventual search and discovery of the Kwik Kopy franchise business in America.

With franchising almost entirely new in the Australian market at this time in the early 1980’s, Stephen set about growing a franchise network off the guidance of overseas benchmarking, and was effectively playing a key role in building the franchise sector in Australia today as we know it.

Circumstances eventually saw Stephen and wife Barb make a scary and  important decision to put it all ‘on the line’, to buy the Kwik Kopy brand from the main company and embark on a journey that eventually brings the Penfold family to today and 100+ Kwik Kopy franchise locations.

0:00 Intro

0:40 Foundational Hall of Fame Member for Franchise Council of Australia

1:28 Convict origins of the business way back in Australian history

4:43 The main product offering being general commercial printing for many years

5:40 The business’ evolution through the years as a typical commercial printer for all types of clients and one stationary store

7:23 Stephen’s initial involvement into the business

8:53 Back to the Penfolds business into the 1960’s after learning the trade as well an apprenticeship in England

9:44 Flexible packaging and the new technology

10:40 Back to Australia and started a division of W.C. Penfolds called ‘Flexible Packaging'

11:57 Enjoying his time for 10 years working in the flexible packaging field

13:19 What it was like running a public company

15:03 At the end of the 1960’s they had one stationary store and Stephen moved on to run that part of the business

15:43 The plan for growing the stationary business via sales growth and more outlets

17:00 Creating a benchmarking group

20:25 Eventually built to 21 stationary stores and looking back thinks Penfolds could have been Officeworks

21:10 Finding Quick printing

23:32 Going overseas to find out who is quick printing very well to learn, and finding Kwik Kopy

24:30 Going to meet Bud Hadfield, the creator of Kwik Kopy with 700 franchises in the USA

28:00 Impression of the Kwik Kopy business at that early stage in America

29:26 Bringing Kwik Kopy to Australia in 1981

32:13 Franchising was very early stages in Australia

35:28 The growth trajectory of the Kwik Kopy franchise in Australia early on

37:05 Stephen and wife Barb bought the business

39:38 How precarious the position was they were in buying the franchise system at the time

40:35 Franchising was new in Australia

41:05 Point of difference

41:41 The family involvement moving forward in the business and leadership transition

43:12 Passion for franchising and the joy in it

46:31 Wrap up

Podcast Produced by: ⁠www.magneticbusinessmedia.com.au⁠

Franchise Stories and Knowledge Base (our other website): ⁠www.franchisebuyer.com.au⁠

Listen or Watch on;

Spotify: https://tinyurl.com/2p4c2437

Apple Podcasts:

Amazon Music:

YouTube: https://youtu.be/bCqnnONS40I