An insight into franchising from a Franchisee's perspective

Written on the 15th of March 2011 by Will Fulton

Buying a franchise is a great step if you are a first time business owner - especially if you’re coming out of a successful job in a similar field to that of your target franchise. That was my motivation for getting in. I also figured it would take way too long to set up endless business systems so why reinvent the wheel? I did very little due diligence prior to getting into ActionCOACH and have some perspective on this approach with the benefit of 5 year’s hindsight!

Here’s what you may want to be thinking about…

A key task as you look at what’s available is to consider how motivated you are towards DOING the work with your target customer base versus FINDING the work from your target prospect base. This distinction between operations and sales is important as you will want to evaluate what systems you will be relying on the most from your franchisor.

It’s sometimes said “your business is about what you are LEAST good at”.  So, if you are fairly outgoing and confident with FINDING work, then have a look at how strong the franchise’s systems are for delivering a high quality product or service to their customers (and any points of difference between them and their opposition). This will be important to you as you find new customers with your sales skills. Sometimes getting customers may be a relatively straightforward process, but customer retention and delivery may be compromised without solid back-up systems.

On the other hand, you may be very confident with the delivery side of your service or product but be less confident about drumming up SALES with your new customer base. If this sounds more like you, then the marketing and sales systems of your target franchise should probably be looked at in more detail. How well and to what extent your franchisor generates leads or clients for you will let you know how reliant you’ll need to be on either them or you.

Talking to other franchisees in the network is another great indicator of life in the system. This is one step I did do before getting into ActionCOACH.  I was already quite keen to join ActionCOACH but talking with others really cemented the decision. Think up some good questions before you phone around.

Overall, I have found that self-reliance is the hallmark of all the best franchisees. Too much reliance on the franchisor breeds a “feed me” mentality; too much dependence on the operator rather than the franchise system can sometimes breed resentment. Do your homework and give yourself enough (some!) working capital to get started.

Best wishes with your decision and back yourself to be the best!

This article was contributed by Will Fulton from ActionCOACH.

Will Fulton has seen the franchise system from many angles. He has been a franchisee with ActionCOACH for 5 years winning many awards including 2007 Australasian Coach of the Year. He’s also a Director of Advanced Cabinet Solutions who licence joiners to manufacture using a unique system for waterproof cabinet construction. He has trained franchisees in all stages of franchise ownership from induction training through to experienced operators. This has taken him to the USA, UK, Ireland, Australia as well as NZ with his training systems. In addition to his franchising activities, he operates an internet company and is a keen property investor.

An insight into franchising from a Franchisee's perspective

Written on the 15th of March 2011 by Will Fulton

Buying a franchise is a great step if you are a first time business owner - especially if you’re coming out of a successful job in a similar field to that of your target franchise. That was my motivation for getting in. I also figured it would take way too long to set up endless business systems so why reinvent the wheel? I did very little due diligence prior to getting into ActionCOACH and have some perspective on this approach with the benefit of 5 year’s hindsight!

Here’s what you may want to be thinking about…

A key task as you look at what’s available is to consider how motivated you are towards DOING the work with your target customer base versus FINDING the work from your target prospect base. This distinction between operations and sales is important as you will want to evaluate what systems you will be relying on the most from your franchisor.

It’s sometimes said “your business is about what you are LEAST good at”.  So, if you are fairly outgoing and confident with FINDING work, then have a look at how strong the franchise’s systems are for delivering a high quality product or service to their customers (and any points of difference between them and their opposition). This will be important to you as you find new customers with your sales skills. Sometimes getting customers may be a relatively straightforward process, but customer retention and delivery may be compromised without solid back-up systems.

On the other hand, you may be very confident with the delivery side of your service or product but be less confident about drumming up SALES with your new customer base. If this sounds more like you, then the marketing and sales systems of your target franchise should probably be looked at in more detail. How well and to what extent your franchisor generates leads or clients for you will let you know how reliant you’ll need to be on either them or you.

Talking to other franchisees in the network is another great indicator of life in the system. This is one step I did do before getting into ActionCOACH.  I was already quite keen to join ActionCOACH but talking with others really cemented the decision. Think up some good questions before you phone around.

Overall, I have found that self-reliance is the hallmark of all the best franchisees. Too much reliance on the franchisor breeds a “feed me” mentality; too much dependence on the operator rather than the franchise system can sometimes breed resentment. Do your homework and give yourself enough (some!) working capital to get started.

Best wishes with your decision and back yourself to be the best!

This article was contributed by Will Fulton from ActionCOACH.

Will Fulton has seen the franchise system from many angles. He has been a franchisee with ActionCOACH for 5 years winning many awards including 2007 Australasian Coach of the Year. He’s also a Director of Advanced Cabinet Solutions who licence joiners to manufacture using a unique system for waterproof cabinet construction. He has trained franchisees in all stages of franchise ownership from induction training through to experienced operators. This has taken him to the USA, UK, Ireland, Australia as well as NZ with his training systems. In addition to his franchising activities, he operates an internet company and is a keen property investor.

Australian franchise group buys The Coffee Guy

November 2012 - Listed Australian franchisor Retail Food Group (RFG) has announced that it is to buy The Coffee Guy, New Zealand’s leading mobile coffee franchise.

Retail Food Group (RFG) has advised the Australian Stock Exchange that it has entered into a conditional agreement to acquire the business and intellectual property assets of The Coffee Guy Group.

The Coffee Guy was established by founder Richard Karam in 2005 and now represents the largest mobile and portable coffee franchise system in New Zealand with 55 espresso vans around New Zealand. Recently, the company launched new retail formats including drive-thru espresso kiosks and hole-in-the-wall espresso bars. It has recently finalised the design and construction of a ‘fixed container’ site model.

In its press release, RFG CEO Tony Alford noted that, ‘The Coffee Guy concept incorporates proprietary mobile coffee van technology, conspicuous brand imagery, van and outlet livery, an uncomplicated operational and franchisee service structure, relatively inexpensive new franchisee entry costs and demonstrated capacity for organic growth.’

‘The transaction not only increases RFG’s penetration outside of shopping centres; importantly it further fortifies RFG’s existing investment in coffee by facilitating entry into an allied sector (mobile) whilst assuring continued supply into The Coffee Guy system of roasted coffee and allied products by RFG-owned Evolution Coffee Roasters,’ he said.

According to the ASX advisory, the price for the business is circa NZ$5.5m which represents an EV/EBIT multiple of approximately 5.5X. Completion of the transaction is anticipated in late November 2012; however, it remains subject to usual and ordinary conditions including satisfactory completion of RFG’s due diligence enquiries.

He said, ‘During the past seven years we have focused on developing a world-class system and brand and this transaction will allow us to accelerate our growth plans. RFG’s future stewardship of The Coffee Guy will also provide management depth and international franchising expertise that will ensure our franchisees obtain enhanced operational and marketing support along with growing brand recognition as we expand our retail presence.’