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The top three Aussie franchises

Written on the 11 February 2014

By Adam Courtenay
The Age & Fairfax Network

If you're researching franchises, you need to know why these are the best.

A company which has managed to wheel out 100 shops in 100 days was recently named the top franchisor in the country for 2013. Sounds like a simple business, easy to set up and quick to generate revenues? A passing fad perhaps? Not at all.

If Specsavers had its way, there would be an optometrist on every street corner, and it appears to be well on the way. It is officially Australia's top franchiser for 2013, a British-born company which in five years has managed to seamlessly spread its tentacles into the Australian market and dominate its area of expertise.

The top award was announced by the Franchise Council of Australia was announced last October. The runners up were Foodco and Snap-on tools. Foodco is an Australian company which runs two cafe brands (Muffin Break and Jamaica Blue) while Snap-on Tools is a US-based company which delivers all manner of tools to mechanics and engineers through its on-road service. Like Specsavers, Snap-on Tools delivered a model already proven to work overseas.

According to FCA general manager Kym De Britt, these three were the standouts of 1200 franchisors that applied for the awards last year. What did they bring to the table? It was extremely hard to separate them, he says. “All of them scored highly over the 11 different categories of assessment. But it's hard to argue with financial performance. Specsavers is the classic example. Ever since it arrived in 2008 it has experienced continual growth. They've made this area their own,” De Britt says.

Advertisement Specsavers has not just been judged top franchisor, but recently won last year's award for Australian Retail Employer of the Year. In its five years of operation, it has opened close to 300 stores and now employs more than 3000 people in Australia in its stores and support office.

There are some sine qua nons in the franchise world and chief among them is the quality of systems and support. “Anything can be franchised but what makes them work is having a proven system, delivering support to the franchisees and ensuring that the company is adequately resourced to support them,” De Britt says.

De Britt says Foodco, which has produced two coffee shop brands in the past decade, came highly recommended for its training programs. “They have an excellent set-up for trainees. They're well organised and have good, working systems.” Over the past decade the company has built up 128 Jamaica Blue stores in South East Asia and 275 Muffin Break outlets in Australia, New Zealand, the UK and India.

Snap-on Tools operates in the mining and mechanical engineering area but is also highly favoured by mechanics for their suite of diagnostic tools. They key to their success is their mobile vans, which come to the businesses on demand. De Britt says they work from “the little guy up”.

“They supply one-off tools for apprentices as well as supplying big industries. It's predominantly automotive but they supply all sorts of businesses.”

Phil Blain, a franchise consultant and co-author of The Franchisee's Guide, was involved in judging the awards and says the top three were judged highly because of their ability to maintain support and feedback at all times to their franchisees. “They keep coming back and updating their support when it's necessary. They have a good collection of data on all the franchisees and they have benchmarks which allow them to go back to the franchisee with reports and analysis explaining not only how they're going against their competitors, but how they're performing against their peers.”

Blain mentions the story of a franchisee that was up 12.5 per cent on the previous year, only to find that the average among the other franchisees was around 16 per cent. “The three top franchisors all had systems which would have detected that,” Blain says.

Blain also mentions the work done by psychologist Greg Nathan, who surveyed 600 franchisees as part of his book Profitable Partnerships. Nathan, who is considered the expert on the “people issues” of franchising, discovered that for most franchisees, profitability was only the third or fourth priority.

“Nathan's message was that it is not about money. It is about lifestyle and credible leadership,” Blain says.

Blain mentions a famous phrase – "without a plan the people perish". “If a business exhibits care, then those working for them will accept, adopt and follow the plan. All three of these finalists nurtured that with their franchisees extremely well.”

Read more: http://www.theage.com.au/small-business/franchising/the-top-three-aussie-franchises-20140122-318zk.html#ixzz2sy5eAZSk

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