How franchisors earn their keep, and their franchisee’s respect


How franchisors earn their keep, and their franchisee’s respect - Bay of Plenty Business News

Good franchisors have and are standing by with their franchisees in challenging times, often undertaking functions outside their contractual scope of works.

There are a number of traditional reasons why the pundits such as myself spruik the virtues of franchising versus a stand-alone or independent business model. Top of the list has to be the fact that franchised businesses have a higher success rate versus the independent business.

For many, that fact would simply be enough in itself. In my view the three core drivers of this statistic stem from brand, purchasing power and the superior systems often associated with a well-developed franchise system.

Factors such as the brand, market position and marketing allow a single franchise business unit to project itself as larger than it actually is, capturing market share, sales and profitability accordingly.

Group purchasing power harnesses the power of many, delivering to the individual business savings that ultimately translate to margin and increased profitability. And or the ability to be more price competitive and in turn capture market share.

"There are some roles that franchisors never anticipated that they would need to be undertaking, as the cheerleader, the resilience coach and the lifestyle coach."

Franchising is based on a model of doing or performing a business function, so it's no surprise that often a franchised business has operational and business systems and processes far superior to a similar independent business unit.

New approaches in Covid-19

In 2020, all of these elements are as relevant as ever and well-developed, well-supported franchise systems will almost certainly exhibit all three.

However, the pandemic and the ensuing market and economic disruption has created a need and opportunity for good franchisors to work with and for their franchisees and systems in some entirely new ways.

There are numerous stories and examples of franchise systems being able to innovate and implement change in a very short and challenging period.

Innovations have ranged from developing and introducing complete online shopping platforms, to virtual store and business meetings with franchisees, through to product and delivery "pivots" to either fill a revenue hole or capitalise from new market opportunities.

For bricks and mortar-based businesses the April-May (and now August-September in Auckland) lockdown, created literally an untenable situation for many including franchisees where they had rental obligations with no income.

The Government's complete inaction and flip-flopping has meant that franchisors have had to perform the role of tenancy advocate and negotiate with landlords, whether the franchisor held the head lease or not.

In many cases this has literally saved franchisees from going broke. I know many franchisors that have spent 100's of hours both publicly and privately advocating for their franchisees.

And finally, there are some roles that franchisors never anticipated that they would need to be undertaking, as the cheerleader, the resilience coach and the lifestyle coach.

Many franchisors during lockdown were quick to perform business-focused check-ins with franchisees, but as the lockdown dragged on, with no business, this check-in role developed into one of resilience coach, keeping in contact with the franchisees and their families to ensure they did not feel isolated and alone.

I have heard of group Zoom chats, after hours virtual drinks and even a franchisor that sent care packs to franchisees with young children, realising that between home schooling and limited purchasing opportunities, something new was going to quieten the masses.

The well-worn franchising cliché, "be in business for yourself, not by yourself" has never rung more true.

Good franchisors have and are standing by with their franchisees in challenging times, often undertaking and performing functions well outside their contractual and traditional scope of works.

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Established or Greenfields?


Established or greenfields? - Bay of Plenty Business News

The first consideration for a potential franchisee is purchasing an established franchise or starting a Greenfields or new franchise?

The first consideration for a potential franchisee with a particular brand in mind is, do they look at purchasing an established franchise or starting a Greenfields or new franchise? Unfortunately, there is no single correct answer and what's "right" for one potential franchisee will not be for another.

The well-performing existing franchise

An existing business has a number of unique aspects; if bricks and mortar – it is physically there, it can be touched and seen and most importantly it has a trading history. A profitable established franchised business has been through the trials and tribulations and the associated costs of a start-up. The value, and time of getting to this position is, and can often be, underestimated.

The potential purchaser can assess the actual, not the benchmarking or theoretical, financial performance of the business. On the assumption of the business continuing to perform in much the same way, the potential franchisee can plan from day one, including what earnings they are likely to be able to take from the business.

The banks are also able to review and assess the historic performance of the business, and the ability for the business to repay debt. This may facilitate bank funding. Both the bank and the purchaser also have a reasonable market value of the business based on actual historical performance.

The operational aspects of the business can also be evaluated; does the incoming franchisee think they can achieve the same or better performance? Where and how does it rate against other units in the system?
Of course, the value created by the current franchisee-owner is going to be captured in goodwill and reflected in the asking price of the business.

The underperforming existing franchise

What if the particular unit is underperforming; not yet profitable and or has been, but is no longer profitable? Should it be disregarded as a potential purchase? Well for the right franchisee buyer, they absolutely should consider it as a purchase option.

It comes down to three dynamics; the price, the performance of the business against benchmarking and the belief that the potential franchisee has the ability to alter the performance.

Underperforming franchise businesses create circumstances where an existing business can be purchased for less than establishment costs.

A lower investment cost alters the return on investment ratio, often making the investment work for the new owner. But usually, a potential franchisee will purchase an underperforming franchise because there is an obvious upside – eg, if the business is not hitting some or all of the franchise system benchmarks, and or if the potential franchisee believes that they are able influence or alter these.

There are numerous examples of highly successful franchisees that have purchased underperforming units. Some systems even have franchisees that specialise in fixer-uppers.

Additionally, purchasing an underperforming franchise unit may be the only way to get into a particular market.

That being said, the astute buyer would still need to consider the above.

The Greenfields or start-up franchise

Why would a potential franchisee choose and what factors would tend them to lean the other way?

The first is usually cost, and often opportunity. With a Greenfields operation, there is no goodwill. The initial franchise fee for a well-developed and performing system is relatively low versus the accumulated know-how of a franchise.

Franchising provides not only the blueprint for establishing new business units, it should provide a good idea of lead time to reach break-even and beyond.

Once the franchisee has a profitable business, they also have the possibility of re-selling with capital gains. Sometimes establishing a new franchise unit is the only option as the system is not in the market. This could be either a new system or a new market.

There are also the less commercial and more emotive reasons. Some people are intrinsically motivated by the establishment and growth of a new business. It's fun, and for serial entrepreneurs the franchise framework provides a faster development timeline. Many of these serial entrepreneurial franchisees have specific skillsets suited to start-ups and development, versus ongoing running of a franchise business.

Preference, skillset and market conditions

While there is a myriad of factors influencing a potential purchaser's decision or inclination towards a Greenfields or established franchise business, these can be evaluated on both the specific opportunity and also the individual's skillsets and risk profile.

What is critical is doing the due diligence on the opportunity and matching it with the individual. 

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No secret to regional success

Moving from the big cities to the Bay of Plenty remains a hot topic of discussion, and as an ex-Aucklander myself, one I have had many a time.

It was once a trend associated with retirees, trading or winding down from their city property and lives, but is now increasingly involving younger individuals and families that are making or looking to make the exodus.

The questions remain, what's driving the desire, what are the benefits – and the biggest one – what do they do when they move?

Lifestyle attractions

What do regions such as the Bay or Plenty offer over the big cities?

More attractive property prices. While Tauranga has seen significant increase in property prices in recent years, the levels are still nowhere near the Auckland property market and on a dollar for dollar basis, your money still goes a lot further.

Less commuting. Along with the lower property pricing comes the reduction in commute times. A desire to avoid the commute is often cited by Aucklanders as the primary driver for looking to leave the City of Sails.

Add to these perhaps the most emotive and greatest driver, the elusive "work life balance". Just the thought that you could go for a walk on the beach or a surf after work in itself makes the day a bit brighter.

Combined with easy access to the central North Island, an increased disposable income from not paying an Auckland mortgage, and the scales are tipping towards the "life" on the scales.

However, the employment opportunities available in the big cities may not be available in the regions, which leads many to their own business, often in franchising.

And this is where the work life equation gets very interesting, with many franchise systems having some of their highest performing units and franchisees in the regions.

Better business fundamentals

Statistically, regional businesses have a 30 percent higher chance of being successful than big city businesses. And statistically franchises have a higher success rate than independent business units. That makes it seem like a lot of sense to start or purchase a regional franchise.

The factors that bolster franchised businesses' performance in the regions include lower rentals and lower wage costs, which are two of the largest costs for most businesses.

Lower operating costs are often matched by less competition due to the size of the market, making it easier to penetrate and stand out. A national or international franchise comes with the power of brand and marketing machine, adding further fuel to the mix.

It's not just the individual franchise units that do well in the regions, The Bay of Plenty is home to major national franchise brands in the building, home services and business to business sectors.

So who's coming?

In recent years we could categorise a majority of our movers and new entrant franchisees as the lifestylers as discussed. This trend will only increase in a post Covid world where many have had their first taste of work life balance via work from home and are not eager to go back to the daily commute or structured grind.

There are two additional groups that I expect to start to look at the region as a desirable franchise business opportunity: returning expat Kiwis, looking to avoid the cities and the ex-corporate redundancies, looking for opportunities that match their skill sets.

So, whether the motivation is a work life balance, securing a high-performing franchised business or escaping the corporate world, franchising in the Bay of Plenty looks a great option for many.

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A Darwinist look at the future of franchising


A Darwinist look at the future of franchising - Bay of Plenty Business News

The world has changed. In fact, we have witnessed the impact on human health, we have not even glimpsed the tip of the economic iceberg.

The world has changed. We are not talking summer to winter, we are talking ice age. In fact, I would suggest that while we have witnessed the impact on human health, we have not even glimpsed the tip of the economic and social iceberg that is coming over the horizon.

I have previously discussed the counter-cyclical relationship between the economy and franchising and why the unique traits of this economic iceberg will lead to a new growth of franchising. It should be noted, not all are going to benefit, and we are already seeing glimpses of what successful will look like as we move into this new economic and social environment.

As always, those that change and adapt will prosper, those that do not, will not survive.

Franchise models that were able to continue to trade online during shut-down or by being an essential service benefitted from the initial environmental change, but moving forward, genetic sequencing of the successful franchise species will have similar characteristics.

Best systems likely to be more successful

Having the best burgers, coffee or retail offering will not equate to survival or dominance of the species.

Unquestionably, as unemployment increases, an increased number of people will look towards franchising as their Plan B.

Many would have spent considerable time as employees learning fantastic skill sets, suited to performing a role or job function. They will not be looking at a franchise to learn a task, they'll be looking at a franchise to buy and develop a business. However, their ability to run or manage a business may be non-existent.

Over time, the truly successful franchise brands will be those that have the best systems. Everything from how they manage a recruitment process, how they take someone with no business experience and train, to how they support and develop franchisees to grow their businesses. Better systems also include protecting the brand, and looking forward at the challenges and opportunities.

Capital is a critical component and generally, the more capital intensive a franchise model, the more challenging it is to grow that system. We are seeing a rise in interest in lower investment level franchising. But it is not only the absolute numbers involved, it is the ability to borrow, fund and produce a return on investment.

Franchise systems that can accommodate different funding and capital arrangements and/or produce super returns on investment levels will be more successful.

These could involve any combination of mixed capital models, the rise of the traditional co-operative structure, preferred funding arrangements with banks, through to crowd funding and social capital investment schemes.

New rental and property models

We have seen an immediate swing away from bricks and mortar businesses towards mobile and work from home. Suddenly having premises and a lease has become a potential and significant burden. Conversely, those without premises, and associated cost, have fared reasonably well.

Capital is a critical component and generally, the more capital intensive a franchise model, the more challenging it is to grow that system.

However, there will always be businesses that require a physical presence. Models that do not tie a franchisee to a traditional extended period lease, and or models that are able to provide a flexible rental or property model for franchisees, will unquestionably be favoured in the short-term and benefit from growth. And these will potentially be more robust and successful over time.

Hamburger chains selling bread and milk and high-end restaurants delivering cook your own food boxes are perhaps extreme examples of the now almost cliched "pivot" approach to diversifying income streams and even the concept of the business.

I would suggest the need for franchisors to protect income will encompass both the aforementioned change in product or delivery model at a unit level and perhaps more importantly, their need to insulate and diversify income. This will often be intrinsically linked to the franchisees income. This may involve multi-brand and multi-concept ownership, or vertical integration including distribution outside the franchise system.

It might be cold outside. But do not worry, the franchise business model won't just survive the cold, some will adapt and thrive in it.

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Franchising can help entrepreneurship renewal


Franchising can help entrepreneurship renewal - Bay of Plenty Business News

Growth of entrepreneurship through franchising will go hand in hand, and I suggest that franchising will both accelerate and take a starring role.

New Zealand, at heart, is a nation of entrepreneurs. The tyranny of distance, added with the old number 8 wire mentality has created many a commercial endeavour. The economic and social conditions post COVID-19 will stimulate and feed this national inclination. For many the inclination will morph into franchising.

Why we will see a growth in entrepreneurship

Entrepreneurship – the propensity for people to go into or create a business for themselves – tends to be anti-cyclical to the economy.

This sounds counter-intuitive, but good times and full employment, coupled with a comfort level in the status quo, means fewer people are inclined to take the jump to business ownership.

At the other extreme end, which unfortunately we are now facing, with a recession and significant growth in unemployment as well as under-employment, many will have that push. The post COVID-19 recession will be very different to previous downturns.

Interest rates are low, many would-be entrepreneurs have created equity in property and at this stage they have access to capital.

Also, importantly, the world has suddenly got a lot smaller. Globalisation of the labour market has suddenly ceased.

We are looking at a potentially massive social shift. Few people knew what WFH stood for, or even considered this an option a few months ago. As the workforce has had to come to terms with this new way of working, a great number of people will be reluctant to return to the daily commute, the stipulated hours and work environment. Many have tasted having a greater control over one's day, work and ultimately their own destiny, and will look at exiting the corporate world.

Why franchising will champion entrepreneurship

Growth of entrepreneurship and the growth of franchising will go hand in hand, and I suggest that franchising will both accelerate and take a starring role. Franchising provides opportunities to use almost any existing skill set. From cleaning to home loan brokerage, to building and hair styling, there is a franchise system that provides a traditional employee the opportunity to go into business for themselves applying their existing skill set. If the decision to go into their own business has been one of necessity, this will be highly desirable for many of them.

A franchise system or framework provides the business tools, systems and support around a skill set, turning it from a job function to a business.

The business in a box approach means the incubation period for a start-up franchise business is likely to be shorter than a stand-alone and an established brand and marketing machine is likely to lead to a shorter period to break-even and beyond. Faster will translate to more growth.

The old franchise saying of being in business "for yourself, not by yourself", has never rung truer.

The safety net and support of being in a franchise is no doubt being felt by many at the moment.

Not only have franchisors sought to support their franchisees, New Zealand's franchise community has collaborated to seek out cross-industry solutions.

Moving forward, franchise systems will have the skill set and resources required to pivot and capitalize on the changing environment, outpacing the individual or corporate business.

The post COVID-19 New Zealand economic and social environment has created ripe grounds for entrepreneurship and the growth of the traditional New Zealand owned and operated business.

That could be the perfect environment for planting the seedlings provided by franchising.

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3 Areas where Franchisors can make positive steps to deal with COVID-19's impact

It is fair to say, it is this week that COVID-19 really hit home in New Zealand. The franchise sector is no different, and covering so many, mainly small businesses, employing over 124,000 people, collectively there is a lot of concern.I do not think that anyone has seen or has foreseen disruption to the level that many are envisaging.

We should all follow the guidelines on how to slow the spread of the virus but we should also be looking at how we can flatten the franchise sector's "impact curve", limit the damage and speed the recovery.

If there are positives out of any of this, they are that we can look towards, learn and share what is happening in the franchise sector and what franchisors are and should be doing.

1. Communicate

Now is certainly no time for franchisors and franchise leaders to be quiet. Make some calls, risk sending one too many emails and or Facebook / LinkedIn posts to your customers and stakeholders.

Most franchisors would have correctly started by communicating with their head office teams.They themselves need to feel secure not only in the face of the virus but also the potential impact that it will have on the business and their livelihoods.Franchise support teams need to feel they have support from the top down, they are likely to be the facing franchisees and even the well experienced ones will now be dealing with new challenges.It goes beyond the initial email or discussion and should be every day, if you have teams working remotely, start the day with a 5 minute virtual huddle via zoom or skype meeting.Think about how you can safely maintain contact with franchisees and continue visits.Some systems are splitting teams and keeping remote teams away from head office.

Franchisees will be looking towards their franchisors for support, guidance and re-assurance. Good franchisors are not only in constant communication with their franchisees, but ensuring that they are providing updated information that can be distributed to franchisees' teams, and most importantly customers. Brands need to be owning and taking the lead of communications with customers as much as possible.Now is also the time for franchise advisory councils to be stepping up and assisting with communications with-in the system.High up the list of things to communicate should be the Government Business Support Package, every franchisee should be looking at this now.

Pro-active franchisors are engaging with their larger stakeholder groups. Depending on the industry this will include, banks, landlords, and most importantly and not to be forgotten, industry or trade associations and colleagues. The Franchise Association of New Zealand is looking at avenues to maintain interaction with members including virtual sessions and workshops on topics of interest and assistance to members. And yes, colleagues include your brand competitors, right now they are facing the same issues and are most similar to yourself.

Lastly, there is a huge amount of press and industry information, do not get media overload, but work on keeping abreast of what information is available, scan it, share it. 

2. Keep business open!

To be clear I am not advocating that anyone risks making others sick and or disregards any official advice but, we need to keep doing business!

However, franchisors should be looking at every opportunity to keep "the doors open" on their franchisees businesses.Iridium Partners works closely with a number of food and beverage brands, an industry that is already facing a plethora of changes. For them it is being proactive in communicating with customers that they are open and taking steps to protect public health, expanding pick up and delivery services and focusing on digital platforms.Even for non food and beverage it's about moving as much as possible to digital and online. Get "business" to where customers are, if they are going to be home, work on getting it there. If your current format does not fit this model, change it.

I am aware of a number of conversations that franchisors are already having on behalf of franchisees, whether affected now or potentially in the future. As a sector and economy, we have never been more in this together. There needs to be dialogue on everything from franchise fees, rental holidays, bank loan repayment scheduling and just about anything else that keeps money moving.

3. Stay calm.

As I said at the beginning, franchisees will be looking for leadership from franchisors perhaps like never before. Remember that it won't last forever, but there is no doubt that it will change the economic and franchise landscape.Stay Calm, make and communicate your plans and look after your people. Looking after starts with checking in and making sure that they are ok, there is so much disruption and concern already. Let's flatten that "impact curve".

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The importance of walking the talk

I am continually amazed at what appears to me to be a growing gap between what people say and what they actually do.

In the business world one would expect it to be relativity simple, be clear on what you are offering, and deliver on that. Walk the talk – or just do what you say you are going to do. In other words, deliver.

These gaping holes appear everywhere. From how long it takes to get a cup of coffee and the quality or lack of said coffee, through to having supposedly customer-centric large companies address customers' issues.

What's this got to do with franchising? I believe the franchise business model can address the delivery of walk the talk in a number of unique ways.

Franchise systems provide frameworks

Franchising involves the systemisation and documentation of a business process, service or product.

To be successful as a brand, a franchise system needs to be not only be good at, but able to reproduce the process, and train others to do it. Reproduce, refine, develop.

A franchise is also more likely to monitor feedback and use it as a proxy measure of customer delivery versus solely revenue. Whatever it is, chances are that it will evolve over time and benefit from group learnings.

The franchise mind set

As a business model, franchising is not for everyone, but a successful franchisee will be one that is able to follow a model or process.

This starts at the beginning when they apply for or examine a franchise business. The franchisor is able to see quickly whether or not the franchisee can follow an application process. If they can follow the systems here they are more likely to follow the systems that are designed to walk the talk in the business itself. The franchisee picks up the system, and one supports the other.

Human nature helps. As competitive individuals, franchisees often share and compare information on performance, which leads, no great surprise, to improved performance. Corporates may have similar benchmarking, but for franchisees it's far more personal, which leads us to the last area where they have a great incentive to walk the talk.

Everyone has skin in the game

Here's the big kicker and it's a factor that is very difficult for a corporate model to emulate. A franchisee has a personal and vested interest to deliver.

Incentive programs, KPI's and the like cannot reproduce for an employee what the personal skin in the game provides for a franchisee. It's personal – their livelihoods depend on it. They are closer to the customer interaction and as such more motivated to walk the talk.

Add the next layer to this. A good franchisor will ensure that the franchisee is walking the talk. They will receive coaching, training and if ultimately, they are unable to walk the talk, the franchisor will assist them in walking along.

I am not saying that a franchise business is going to deliver the goods each and every time, because obviously there are multiple factors involved.

However, starting with a systemised approach for a business that has already proven that it works, delivered by an individual that has a personal interest in delivering well on the business offering, sounds promising to me.

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Bring in the Coaches

As we start a New Year and new decade there is no shortage of articles and trending social media posts on advice. High amongst them is the rise of executive or business coaching.

The analogies are that becoming a high performing professional in business is no different to a top athlete's need to perfect their golf swing, swimming stroke or basketball lay-up shot.

The Cambridge definition of a coach is "someone whose job is to teach people to improve at a sport, skill, or school". Makes sense, but how does their role relate to the franchise world and particularly the franchisor? They themselves are often seen as the coach.

So how does their role intersect with the often heard comment, "shouldn't the franchisor provide or have that knowledge"?

Well, I would suggest franchisors would benefit from having coaches as much as any professional, the hint is in the dictionary definition – to improve. So in what areas should they seek and take some advice?

Many franchisors grow from being good at the doing of something – the classic economics example, say, of "building widgets". First they build widgets, then a system around the widget building. This is the essence of franchising. The professional and commercial backgrounds of franchise builders can vary significantly. And not surprisingly, their skill set may also vary significantly. But there are three common areas in which they could likely benefit from coaching. People management, leadership, and the traditional human resources management skill set are becoming increasingly valued and are all important for commercial success. 

In other words, the franchisor's core skills may be widget building when the business needs soft skills. The often unrecognised point, however, is that a franchisor's business is actually not based around the widget building, it is around engaging their franchisees to widget build. It is also about managing a franchise support team, a group of people with a hard job who need coaching and support themselves.

Many franchisors simply do not have the support skill set required. It doesn't matter how good their process for making widgets is, if they are unbearable to work with, do not develop their teams and cannot relate to their franchisees, they are going to have a lousy franchise business.

Don't just wing it

At the risk of alienating some franchisors, I am going to say that many are winging their way through a marketing programme. There are some franchisors who are savvy marketers and have well executed marketing and advertising programmes, but both groups could still benefit from a marketing coach.

Often franchisors – particularly founders – are either too close and protective of their own brand and or do not have the time and capacity to see a bigger picture. Marketing is also often a point of contention between franchisors and franchisees, so bringing in an experienced, neutral external view can be highly beneficial. Many franchisors develop relatively good skills in reading and understanding legal documents including their own franchise agreement, leases and supply contracts. However, again they risk viewing these in isolation and without a broader context. Every franchisor should have a trusted legal advisor that they regularly review and discuss all things legal with. The law changes, as does the business climate and what was a good approach five years ago may not cut it today.

In 2020 it appears we all need coaches, not because we don't have skills, but to hone the ones we have and deliver our best selves. Franchisors owe it to themselves, and their franchisees, to seek out the coaches they need, or they may end up with 2020 hindsight.

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Important Notice For Franchisors

How many franchise enquiries did you receive over the Christmas break?

How many did you miss, and are you getting back to those enquiries just now?

The bad news for you is that you may have left it too late.

Common knowledge amongst franchisors would have you believe that you have 24 hours to respond to an enquiry. From there the potential franchisee will rightly or wrongly create their initial assumptions on the brand, it's franchise support and even the likelihood of them being successful in the brand.

But it gets worse, we know it is no longer 24 hours. It can be hours or minutes which is why we have a 24-hour response promise and can usually respond in person within minutes.

We were busy whilst our clients relaxed over Christmas with the knowledge that their enquiries were answered, promptly and professionally allowing them to enjoy time with family and friends. They are now starting the year by doing their due diligence with potential franchisees.

We also had a great number of buyer advocacy enquiries with people looking to find out more about franchising and what their options are. Would you like to be on that list?

Now, let's talk about you, how are you going?

If you would like to understand how we can tailor a franchise recruitment support model that works for you, get in contact.

This email address is being protected from spambots. You need JavaScript enabled to view it.


0275 393 022

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What's in view for 2020?

Franchising Trends
The end of a year and the start of a new one is always a great time to contemplate and plan for what's coming.

It is also a great opportunity for us to review the crystal ball gazing we did earlier in 2019 with what's trending in franchising.

Time to polish the crystal ball for the coming year. So how did our trend predictions play out this year, and what's going to trend and where are the opportunities in 2020?

Multi-brand franchisors
Big tick here, in the food category alone, with BurgerFuel World Wide re-focusing on the New Zealand market and introducing two new brands.

Columbus Coffee owners Café Brands purchased the Mexico group, Coffee Club has started to expand Bird on a Wire and perennial creators and owners of Mexicali and Burger Wisconsin expanding the Ha Poke brand and working on future brands. A focus on product diversification and market segmentation will see other mature franchisors develop and introduce additional brands to their portfolios and existing franchise base.

Multi-site and multi-brand franchisees
We may have been a bit ahead of ourselves here, so this is still a watch this space as the sector matures, but it's happening.

Again, innovation is emerging with multi-brand single location franchisees increasing their offerings and market appeal and combating ever rising operating costs.

Health and well-being
Goes from strength to strength, multiple and new fitness brands continue to expand, often in places that you would not expect. Workouts are getting shorter and somewhat more interesting.

Based on the US and Australian markets, we will continue to see change and innovation in this consumer – and in turn franchise – market space.

Commercialising and eventual franchising in the mental health space is an area to keep an eye on.

An environmental focus
I predicted disappearing plastic bags were just the beginning – and was this an underestimate.

Consumers drive the future of brands and if worldwide student protests are an insight into the future of consumption, then it's green. Overseas markets have seen massive growth in bulk retailing, which is emerging in New Zealand.

A couple of areas to also watch will be systems focused on recycling and resource use reduction, whether conversion of existing processes such as making your house more eco-friendly or incorporated into delivery of their core service or product.

Plant-based food
My prediction for 2019 was this "will be a category to watch as it becomes mainstream".

Almost all the major food franchise brands are now chasing a segment of the plant-based food market.

New Zealand's only 100 percent plant-based branded offering – Lord of the Fries – is looking to expand through franchising and a major crowdfunding exercise.

We identified disruption and technology as the macro-trend of our times.

Disruption will continue in large, noticeable ways as well as the insidious creep of technology, hardwired into
processes such as AI.

Shared and gig economies
As predicted, there were big developments in this area also with the world's largest shared office space provider IWG introducing and rolling out a franchise model across New Zealand.

On a smaller scale, expect to see savvy franchisors explore ideas to pool capital and human resources in all sorts of franchises from social enterprise cafes to ride sharing.

Other factors that will influence New Zealand franchising in 2020
The economy. Local and international pessimism persists. This may drive an interest in franchising generally as people look to exit corporate life for a sense of control and relative stability.

However, a changing banking environment could potentially make funding harder.

Concerns over the introduction of legislation are re-emerging, which may be either tempered or could flare up with an election looming in the latter part of 2020.

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New Zealand Coffee V3.0

It has been over 5 years since I left the franchised coffee space, but I guess all that coffee consumed from over a decade in the industry and opening 70 cafes, somehow got in my bloodstream. I still keep an eye on what is happening from here in New Zealand to New York and in between and I have a view that we will see what I'm calling New Zealand Coffee Version 3.0 rise over the horizon in the near future.

What is V3.0?

V1.0 - Saw the emergence of local coffee roasters and the birth of a number of New Zealand coffee brands. It was cool, it was new and provided an alternate to the traditional New Zealand tea consuming behaviour. We saw the café scene grow which embodied Starbucks - The Third-Place concept.

V2.0 - Defined by the growth of the branded offering, whether through a roasting and distribution, company operated or franchise model. Local and a few international brands started to look dominant in the market and generally coffee was looking more and more like an ambiguous commodity. Cafes grew in size, fit out and operational costs grew, and the food offering became as or more important than the coffee itself.

V3.0 - Is on the way. What does it look like? There is a hint with a small number of New Zealand operators, but none have blended all the elements as yet.

A successful Coffee V3.0 operator will have all three distinct features

  1. A focus on coffee quality. A real focus, not just rhetoric and marketing
  2. Innovation hardwired. Utilising technology, which is not a gimmick, encompassing all aspects including the consumer interface, production processes and business management.
  3. A significant change in business format. It will be (or need to be to succeed), a low capital and low rental model which is capable of operating with a relatively low wage cost to revenue ratio.

And don't forget... the essential element to all successful businesses in the future, meeting social and environmental responsibility.   

Coffee V3.0 will deliver here too.

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Local entrepreneurship alive and well in 2020!

Here's a great little story to start 2020!

It's about local entrepreneurship, social media marketing, the importance of timing and critically how being purpose driven leads to success.


Let's start with purpose. It was pretty clear… need to make enough money to buy a new surfboard so three young grommets (that's a little surfer dude) decided to sell bacon butties next to the beach. I'm down for that and happy knowing where the proceeds are going.

Social Media Marketing

Connect with your market when they are ready to buy! We saw their post pop up on the local Facebook page so went to support them. The beachfront was strewn with numerous campervans and worse for wear Mount Maunganui party goers from the night before. Talk about right product, right place and right timing. And… possibly the best day of the year to be selling through social media.

Young and local entrepreneurs

We are always keen to promote and support local businesses. Doesn't get much local-er for us and love seeing some young guys learn customer service skills, basic business accounting, staff management and division of tasks. Really happy to buy from them, great butties too!

A few things that I really like:

  • Deliver on your promise. Post said "Bacon Butties $4", that's what we got and with a smile. Took all of about 2-3 mins!
  • Stick to your Knitting. No attempt to upsell to a sausage or add sauce, sides, drinks or subscribe to their customer loyalty program to be able to access the best price or latest product.
  • Be authentic to yourself and the brand. The three little dudes were fronting the business. Dad was in the back cooking the bacon but the boys were leading the charge and fronting the business.
  • Dealing with the third-party delivery challenge. Apparently, someone had made an enquiry if they were on Uber Eats. No… but no problem, they had the scooter there ready for deliveries!

Kia Kaha boys… have an awesome day and look forward to seeing the new board. I suspect we may be seeing these boys in some future business endeavours!

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"Right People, Right Place" by Simon Lord Franchise New Zealand

"Right People Right Place" - Simon Lord, Franchise New Zealand Media

Iridium Partners matches the people with the franchise to put round pegs in round holes​ - find out more in Simon Lord's article in the latest Franchise New Zealand magazine.

There are over 630 different franchise brands in New Zealand and thousands of new and existing franchise outlets on the market at any time. This means that anyone looking for a business opportunity faces a bewildering choice of opportunities. Even if you know you're looking for, say, a café franchise, which one is best suited to your pocket, your skills and your personality?

At the same time, franchisors are keen to find people who are a good match for their own culture; people who will make a success of the opportunity and build thriving businesses in their own local area. That matchmaking process can be a time-consuming one for both parties.

That's why Nathan Bonney and Meredith Taylor established Iridium Partners. 'You could say it's "Tinder for franchising",' says Nathan. 'Our aim is to pair people with their perfect franchise systems.'

The couple bring massive experience to their role. Nathan has over 17 years' experience in franchising, including over 10 years with the multi-award-winning Columbus Coffee and roles with Mexicali Fresh, Burger Wisconsin and Cobb & Co. His passion lies in franchise business development and helping individuals succeed in franchised businesses. Meredith, meanwhile, has more than 20 years of experience as a senior Human Resources professional across sectors including hospitality, tourism, construction, engineering and digital. For Meredith, achieving successful business outcomes for all parties is her goal.

Finding a business match

'Good franchising isn't about selling the most franchises – it's about recruiting the right people as franchisees,' says Nathan. 'But it's hard to make the right decisions when everyone's trying to sell you a business. That's why our approach is focused on recruitment, not sales.'

'It's like dating – you have to find out if you are right for each other,' smiles Meredith. 'That's why, if you're considering buying a business we like to talk to you, ask lots of questions and find out about your experience, your dreams and goals, your family and your financial situation. What do you like doing or not like doing? We'll take you on a journey to find out.

'A lot of people don't understand very much about franchising, so we'll also go through how it works and help you work out if franchising is right for you at all. If it's not, we'll tell you; if it is, which franchises are worth considering? You might think lawnmowing, we might suggest a renovation franchise. We'll carry out psychometric testing to help ensure you won't be a square peg in a round hole. Only after we've identified the specific brands that might appeal will we approach the franchisors on your behalf.'

Potential franchisees pay no fee for the service – instead, franchisors pay Iridium a 'finder's fee' in the event of a match. No match, no fee.

Attracting good franchisees

Iridium work directly with some leading-brand franchises to approach recruitment from the other direction, helping them to attract and qualify good potential franchisees. 'Recruitment is a big concern for many franchisors and a vital part of keeping their brand energised and growing, but few companies can afford to have a full-time specialist in the role,' Nathan says.

'We can effectively run a franchise's recruitment programme for them, including recruitment strategy, interviews and testing, credit and police checks, and personal and professional reference checking.

'Knowing the brands that we work with really, really well means that we can identify potential franchisees who have the right qualities to succeed in those systems and ensure that we only present qualified candidates, saving everybody's time and precious resources. Just as with the candidates, we "date" the franchisors, digging deep into how their system works and what makes a successful franchisee.

'We can also work at a strategic level. Some brands have a clear view of where they want franchisees or need to set territories, others appreciate some input. We also understand the New Zealand market when it comes to property and leasing, so we can help franchisors put the right people in the right place. And we can also help create your recruitment plan, create appropriate processes and documentation, review existing databases and develop communication. That allows franchisors to concentrate on supporting existing franchisees and building their business.'

Good brands, good people

Nathan and Meredith say that they only want to work with credible brands which are structured to do well in New Zealand. 'Our client base includes such leading names as Mexicali, Rodney Wayne, Burger Wisconsin, LJ's and Lord of the Fries, and we also work on a referral basis with a number of other brands across various categories. We also do one-off project consulting.

'By working with both franchisees-to-be and existing franchisors, Iridium covers all levels and stages of buying, running and growing franchises. The result? Franchisors with the right people representing their brands, new franchisees with the right skills to create thriving businesses within that particular system, and everyone involved sharing the ingredients for success.

'So whether you're considering buying a franchise or looking for the right new franchisees, contact Iridium today to find out more.'

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Who doesn't love a sparkling clean shower?


Franchise Opportunities Available Now | New Zealand | Diamond Fusion

Hawkes Bay, Taranaki, Wellington, Manawatu, Christchurch, Taupo/Rotorua/Whakatane - secure your territory and say "see ya" to the 9-5 grind.....

Iridium Partners loves clean sparkling glass just as much as you do and we are super excited about this business opportunity.  Fraser and Toni of Diamond Fusion were looking for a business that provided them with freedom and financial returns that worked in with their lifestyle - they have done such a great job working in the business, setting up the right business model and systems that they now have Franchise territories and opportunities available throughout New Zealand.  

Here's your opportunity to have the freedom of working for yourself  in a well structured and supported business that can provide fantastic financial returns. 


Had enough of the 9 – 5 grind?

Have you been thinking about becoming your own boss and growing a business, so you can put your hard work toward a valuable asset for yourself rather than someone else?

Are you ready for your opportunity to own an extremely easy to run business, with low running costs, that, with some effort & commitment, can provide you with a work life balance that will be the envy of your friends!

We are seeking the best people to be franchisees in generously sized areas, that will provide you with a large customer base, which if committed to, could provide you with a great income. Potentially, ideal for a Husband & Wife style business, or grow bigger & employ staff for the hands on work, while you run the business from your home office.

Although residential new shower glass is our core business, potential for work is almost unlimited, as our range of products hugely improve any glass or silica based surface. One day you may be working on a residential shower, the next the glass of a commercial fishing boat. The direction you take your business is in your hands.

To be successful you will be a hard worker, with ambition to own & grow your business, you like to interact with people from a variety of backgrounds. You will be able to grow contacts & networks to create a steady flow of ongoing work. You will have an eye for detail, & be able to solve issues & problems if they arise. You will be tidy, well organised, & be able to plan your days in advance.
Your background could be sales, or customer services, or something completely different. Most important is that you are honest, friendly and reliable.

We will show you how to use our products & business systems & provide you with comprehensive initial training & the ongoing support. A Diamond Fusion Franchise provides you with all the benefits of owning your own business, with the added advantage of belonging to a network where support & assistance is provided.

We are looking for people nationwide to supplement our existing network.

If your interested get in touch via Facebook, or email us at This email address is being protected from spambots. You need JavaScript enabled to view it., and we can have a talk

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The best time to buy a franchise


The best time to buy a franchise - Bay of Plenty Business News

A number of factors come into play, and like life in general, no two people's situations are identical. 

The decision to buy a franchise business will be one of the largest decisions in most people's lives. And like life's other big decisions, deciding on the right time can be challenging.

A number of factors come into play, and like life in general, no two people's situations are identical.

From working within the franchise sector for many years, it has become clear to me that there are certainly factors that influence and those that should be considered when thinking about when is the right time to buy a franchise.

One of the first things people tend to consider is the economic cycle. Business confidence, or the view of where the economy is or is heading is important. You may be more confident in investing in a franchise if the economy is looking good. And you would probably be right.

An economy in growth generally speaking is good for business and a good time for someone to invest and operate a franchise business. The old "a rising tide lifts all boats" analogy.

Assess the economic cycle
While a buoyant economy increases the likelihood of a new franchise business doing well, does a slowing economy or decaying business confidence environment make for poor timing? Not necessarily. In fact, there can be a number of reasons why it's actually a good time.

An upside is that weaker economies are often accompanied by lower interest rates, making borrowing less expensive and contributing towards improved profitability and return on investment. Coupled with the fact that most business owners will also have a mortgage, they create a double happy scenario. A franchise may also create stability if you are concerned about, or facing, redundancy.

What about business and consumer confidence and the rising tide analogy with an outgoing tide?

Well, some sectors, businesses and franchises actually do well and even relatively better during economic downturns and buying into these during that period could be beneficial. A couple of categories that surged during the GFC were casual dining and liquor retailing.

However, I would suggest the most important factors are based on your personal situation. Consideration needs to be given to your capital base, age and experience, energy levels, family commitments and support.

Age and experience will influence not only when and whether you have the work and life-experience skillset to successfully operate a franchise business. It may also influence how much capital you have and are willing to risk.

If you are older, you can perhaps not afford to risk as much, so while you have more capital, you may look towards established brands and businesses and a farmer versus hunter approach. What are your income and debt servicing requirements, do you need a certain income or are you after longer-term capital gains? And, how would the potential earnings and capital gains from a franchise compare against your current income over time?

How much energy do you have to commit to a new business venture and what sort of hours can you manage?

Any new business will require significant initial hard work, so there is a balance between youth and experience. How are your health and energy levels?

Lastly and most importantly for both the success of and satisfaction from your franchise is what are your family commitments and the family support structure you have in place? You need to be able to balance life commitments outside the franchise as well as having the full support of your family.

So while the economic conditions are important, the personal checklist of your personal position is the critical factor in determining when it's the right time for you to jump into a franchise. 

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In business you've got to be nimble

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Lord of the Fries Equity Crowdfunding

Want to get your very own piece of the ethical fast food Lord of the Fries empire........? 

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How Franchising can help save the planet

Whether you choose to believe or debunk climate change, there is no question that collectively we need to take action to save the planet. From a perspective of a commercial structure, the franchise business structure has distinct advantages that could just help save the planet!

Size and ability to scale creates opportunity

Size really does matter; decisions and actions of large franchise systems can create significant impact. We know the removal of plastic straws from use by a few global franchises could eliminate many millions of straws from ending up in the oceans. What about the innocuous bar of soap?

Hilton Hotels claim their soap recycling program across their 5600 hotels has produced more than 9.6 million "new" soap bars and diverted more than a million tons from landfill.

Let's pursue the case study of a franchised hotel chain further.

Their ability to exert positive impact extends well beyond soap and straws. Environmental practices influence everything from food sourcing, their associated carbon miles and food wastage, through to where and how to build hotel properties. Usage policy influences water usage and recycling, through to energy including its production method.

Hilton's overall 2030 environmental targets are impressive and achievable because of their size, and importantly because the franchise structure allows them to develop and implement decisions at speed and scale. (1) And, in most cases it saves and therefore makes money.

Size also creates flow-on effects, competitors and associated supplier businesses will follow if for no other reason than to remain commercially competitive.

Thinking global and acting local

In the commercial world the definition and practice of think global and act local is embodied in a franchise, a locally owned and operated outlet of either a national or international brand. Acting local creates positive environmental results on a global scale. From reducing carbon miles by purchasing locally produced goods to re-investing and supporting local causes, often environmental. Strong local economics reduce the need for people to travel or relocate for employment.

The same could be argued of large corporate structures, but what creates authenticity in the franchise structure is the local franchise owner really is local and vested.

The Tauranga franchised fish and chip shop owner really does care that their system is sourcing fish sustainably – their livelihood depends on it as does the local fisherman's.

Franchising's ability to harness the powers of purpose and the market

Whether you like her or not, Greta Thunberg and her Gen Z, along with the millennials will change the world and hopefully save the planet, but it won't be through protest, it will be through consumption choices. Millennials make up approximately 30 percent of the world population and possess more buying power than any other generation. They are the generation most concerned with the environment and sustainability, deciding the fate of many products and companies not only by purchases, but through likes, followings and influencing on social media.

But where the franchise structure is uniquely placed to deliver the products or brands that best meet the millennials' environmental concerns is through its ability to harness the powers of both purpose and market forces.

Globalwebindex's Sandy Livingstone discusses the difference between CSR – Corporate Social Responsibility – and purpose. (2) CSR sits in the realm of corporate marketing, often used to offset a negative image, purpose is cultural and he stresses "when the intent is genuine, and the impact positive, commercial gain follows".

I believe millennials are able to spot the difference between the so called green-washing by corporates with an environmental CSR statement, versus a franchise developed by a cause- orientated founder. And perhaps more importantly, the latter is supported by vested franchisees that believe and act on the brand's purpose, versus shareholders or employees wanting solely a financial return.

Millennial consumers have created a market positioned to reward these purpose-driven franchise founders and their franchisees. And just maybe to help save the planet at the same time.

1) Hiltons Hotels 2018 Corporate Responsibility Report
2) Sandy Livingstone – Globalwebindex

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Lord of the Fries selects NZ growth partner - Iridium Partners

Making more ethical choices when it comes to what we eat doesn't mean we need to eat solely soy beans and lentils for the rest of our lives or that we can't have a treat every now and then - we can still have a cheeky burger and fries - phew!

It's been very interesting watching the plant based movement become so accepted into main stream, everyday dining and fast food options. It has become something that has been accepted by a complete cross section of the population. No longer is plant based just something that vegetarians or vegans enjoy. There are entire aisles and freezer sections completely dedicated to plant based and who ever would have thought that plant based "Meat" would be sold alongside a piece of eye fillet in the meat aisle.

With many high profile Chefs and personalities promoting plant based and ethical food it is certainly one "trend" that we will not see disappear any time soon. Recently I noticed a well known personality and long standing Australian Chef personality post on Instagram a recipe for their "Plant based soup range - Sweet Red Capsicum and grain soup"....the traditional "Vegetable soup" has been given a makeover and a total rebrand.

Being aware of what and how we eat is becoming increasingly more and more important. Climate change is in the news each and everyday whether it be the current climate change marches throughout the world, the plastic in our oceans, the drought and early bushfires in Australia or the burning and devastation of the Amazon - being more ethical in the food choices we make is each and every one of our responsibilities.

Iridium Partners understands and supports the drive behind the Lord of the Fries founders​ and their desire to bring ethical fast food that also happens to be plant based to everyone. We are very excited to have been selected by Lord of the Fries to assist with their NZ growth and franchisee selection. We understand that finding franchisees who align with the values and beliefs of the NZ Franchisors Bruce and Baksho Craig is vital to the growth and success of the brand in New Zealand. 

If you believe you share the Lord of the Fries ethos, have proven business experience and wish to know more about owning your own piece of the Lord of the Fries Franchise family then contact us today - we have opportunities in Wellington, Queenstown, Dunedin, Christchurch and Auckland. Equally if you think we have missed somewhere and you would like to chat to us don't hesitate - reach out to us today!

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How to get the best deal when buying a franchise

The old saying with houses is that you make your money when you buy. The principle being, what you pay will influence your return when you sell. Pay too much on the way in and it will be difficult to obtain a gain on the way out.

Similar dynamics apply to buying a business. What you buy and for how much will definitely influence the future sale price and the return on investment when sold.

However, when buying a business there is much more to consider than just the price and location.

And with a franchised business, there are additional factors that will influence the future return on investment.

These factors create opportunities.What are the secrets and tricks and tips that nobody tells you?

Understand the market
Instead of questioning if there is a current market for the business – ask will there be one in the future?

To reference the all-time classic example: back in the day Blockbuster Video franchises were hot.

They made a lot of money and accordingly the entry and resale prices were significant.

Technology played its hand here, significantly changing the market and the value of the individual and overall franchise businesses.

We also need to consider other socioeconomic trends and where we are in the economic cycle and how it relates to the business.

There are always winners and losers at each stage of the cycle. Understanding the cycles and trends may help you pick what's trending up, or down and spot an opportunity.

A brand's position or its perception will influence sale and purchase pricing. What opportunities does this create?

The logic is that a category or brand leader may present the best opportunity to obtain a return on your investment through higher sales and market position.

You are likely to pay for this in goodwill if buying an existing business and potentially through a higher initial franchise fee than if it was a greenfield business.

However, challenger brands may represent a good opportunity for a higher return on investment.

A well-resourced and aggressive challenger has room in the market to grow and carry your business, and its value with it.

Look further than the Profit and Loss statement
Essentially, existing businesses are valued by a multiple of their earnings or profit.

I would suggest that to maximise your return on the investment opportunity when buying a franchised business, you need to look beyond the profit and loss statements.

In addition to the market and brand issues above, look at the sales trend line over the life of the business.

Have profitability changes been driven by management of the business or sales? Look at the performance of the business against the franchises' benchmarking information – are there opportunities to improve performance and ramp up the return?

Another property analogy: the best house in the worst street fixer upper approach also applies.

Look for underperforming franchises in good brands. Is it user error or market location? If the former, this may present potential to purchase an underperforming asset, and with it perhaps the largest opportunity make to money.

Negotiate the best deal
Finally, you need to understand what you can, and what you should not, try to negotiate with the franchisor.

There is a tendency for people to critically look at the franchise fees and attempt to negotiate these as a way of saving money.

The franchisor needs fees to run, develop and market the system. Assuming the business stacks up overall, they are a cost of doing business.

However, you may be able to negotiate your entry and exit costs, renewals and transfer obligations.

There is also significant potential in being able to negotiate territory expansion rights. Equally, be aware of refurbishment and re-development costs.

These are essential to ensuring brands remain fresh and current, so are required at some stage.

Again – as in selling a house – evaluate your potential return on investment and whether you will be reselling a fixer upper, or a fully renovated operation.

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