Franchise Council of Australia

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Franchising

  • By Mary Aldred, CEO, Franchise Council of Australia. 

    After the trials and tribulations of 2020, in 2021 most businesses are cautiously looking towards a better year ahead.

    The restrictions and resulting tough economic climate have demanded adaptability, determination and innovation by all businesses and franchising has stood out as one of the most resilient business models.

    However, many franchise businesses have been operating in the hardest-hit sectors – food and catering, hospitality, travel and home services – and have relied heavily on the FCA for guidance, support and advocacy.

    This year the will FCA continue to focus on three key priorities:

    1. supporting members with access to information, resources and support through the transition from Covid-19 lockdowns and trading restrictions to business reopening
    2. advocating and representing the interests of members to all levels of government on the issues, concerns and needs of our members and the small business sector
    3. and through the media, enhancing the standing and reputation of franchising as the preferred model for small-medium business success, including highlighting the resilience of franchise systems during the challenges of 2020.

    The FCA has engaged deeply at all levels of government both informally and formally in recent months, including:

    • facilitating COVID-safe business recovery by emphasising the specific assistance and regulatory changes needed by diverse business sectors
    • bringing bad commercial leasing practices and landlord misconduct to their attention and urging government intervention
    • reinforcing the need for fairness in application of operating rules across sectors, including highlighting disparity between public and private outdoor workers
    • encouraging Federal Treasury and state governments to introduce or continue support for struggling businesses and workers facing unemployment
    • making submissions on specific issues to various state government small business departments on business restrictions, exemptions, customer registers and industrial relations

    The core of our advocacy has been a concerted campaign of dialogue with members to test government policy and temporary regulatory changes, as well as to provide input on specific measures requested by members.

    Feedback from FCA members, supported by a high level of membership renewal and retention (around 90%, plus 15 new members since July 2020) is that they feel they have been supported, listened to and represented through access to information and resources, and government advocacy.

    Concurrently, the FCA has continued to provide input on Franchising Code of Conduct reforms, based on the input of members on the negative impacts of specific measures.

    Whatever 2021 brings, the FCA will strive to support the ongoing success of our members and more broadly franchising and small business across Australia.

  • By Mary Aldred, CEO, Franchise Council of Australia.

    A lot has changed over the past months.

    Our businesses and community have had to face the massive challenges created by restrictions to stop the spread of COVID-19.

    For the FCA, it has meant stepping up our advocacy and activity to represent members’ interests and concerns to government while delivering timely information, business advice and practical support to help meet the trading and workplace challenges.

    The response from our members has been terrific, including more than a hundred emails and messages of thanks and congratulations, as well as significant positive feedback from government and media.

    We have taken a strong public stance on the key issues which have impacted on the sustainability of franchising and small business, and the wellbeing of owners, managers and staff.

    Some of the key platforms have been:

    • the need for rental relief and government intervention as some landlords refused to negotiate despite the plight of their tenants, especially in retailing;
    • the need for tangible government support for businesses to help maintain staff and supplement their income as trading revenue evaporated;
    • assisting with expert advice on managing staff working from home, including maintaining their commitment, morale and mental health; and
    • calling on the big food delivery networks experiencing a huge lift in volumes to help the struggling food retail and hospitality groups rather than profiteer.
    • currently making strong representations to the Federal Government on the issue of redefining casual workers, and we are hopeful of an improved result.

    Small businesses have been hit hard by COVID-19 and although restrictions are starting to be eased, the impacts on individual businesses and the economy nationally will be felt for some time.

    The FCA is continuing to work closely with government and other industry peak bodies to ensure that the voice of franchising and small business is heard by government as we head down the path to economic recovery.

     

  • COVID-19 is presenting unprecedented challenges to franchise businesses, and the Franchise Council of Australia (FCA) is absolutely focussed on doing everything possible to support members through this period.

    This includes:

    • Proactively engaging with government and advocating on the key issues that are affecting members.
    • Participating as a member of the Federal Department of Treasury’s Coronavirus Business Liaison Unit, which has been formed by the Government to engage with peak business groups on systemic issues relating to Coronavirus.
    • Advocating for immediate cash relief and assistance for small businesses and retailers in commercial leasing arrangements.
    • Working closely with our expert partner, ER Strategies on providing advice to our members on best practice management of staff in response to COVID-19.
    • Delivering regular updates including best practice advice and resources to assist members on a day-to-day business level.

    The FCA will continue to provide resources, representation and ongoing support to members during this pandemic.

  • The bushfires that spread across large areas of Australia at the start of the year devastated countless individuals, communities and businesses. The franchise sector generously showed its support for bushfire relief efforts, raising money and donating goods and services to assist those affected by the fires.

    Foodco’s fundraising efforts resulted in more than $90,000 being raised for charity.

    Muffin Break’s commitment to donate $1 for every lamington product sold during January raised more than $65,000 to support the Australian Wildlife Rescue Organisation (WIRES) in rescuing and caring for the innocent animals caught in fire-devastated areas.

    Sales of 21,297 lamington products during January were matched with a dollar for dollar donation from Muffin Break’s parent company, Foodco, with more than $12,000 raise from in-store donation boxes and a further $10,000 donated by Muffin Break’s partner, Darrell Lea.

    Jamaica Blue also raised $13,003 from fundraising efforts, with parent company Foodco also matching the amount, to support Australian Red Cross disaster relief efforts.

    The Tabcorp Group, through FCA member The Lott, raised $1.8 million towards bushfire recovery and relief efforts through their Saturday Lotto Bushfire Benefit Draw on 25 January.

    FCA members including McGrath Estate Agents, Ray White, RE/MAX Australia and Harcourts Australia came together as part of the Beyond the Bricks real estate industry initiative to support bushfire affected communities, raising more than $1 through the campaign.

    Gelatissimo raised almost $50,000 for the St Vinnies Bushfire Appeal by donating $1 from every scoop sold on 18th January across their 48 stores and committed a further $50,000 to support Vinnies Australia in in assisting communities to recover and rebuild.

    Chatime and its franchisees have made a $50,000 donation to the Australian Red Cross. In addition, until 31st March, Chatime will be running a ‘Round It Up’ program across its 124 T-Breweries across the country, allowing customers to round up purchases to the nearest dollar with every cent donated will going directly to the Red Cross to aid the people and the communities impacted by the crisis.

    Fergusson Plarre have created a Gingerbread Firefighter to support the Victorian Bushfire Appeal. All proceeds of from sales of the Gingerbread Firefighters are being donated to the Victorian Bushfire Appeal, with more than 29,000 being raised by the end of January.

    Specsavers committed to donate $100,000 from sales in January to support Australian bushfire relief through the NSW Rural Fire Service, Victorian Bushfire Relief Appeal, SA State Emergency Relief Fund and the Salvation Army Disaster Appeal.

    La Porchetta raised $9765 for the Victorian Bushfire appeal through donating $1 from every pizza sold on 11th-12th January.

    Helloworld h donated 10 truckloads of hay (2000 bales) and 575,000 litres of water through the Buy a Bale charity, helping farmers impacted by the drought and bushfires.

    Bakers Delight raised over $225,000 to support those affected by the bushfires through initiatives including: donating $1 from every 6-Pack of Hot Cross Buns sold to the Australian Red Cross Disaster Relief and Recovery Fund from 16-29 January, matched dollar-for-dollar from head office. Bakers Delight also provided bread and snacks to firefighters, volunteers, evacuees and animals in affected areas and donated bread to bushfire relief fundraising events.

    PACK & SEND recently made a donation of $10,000 to the Vinnies Bushfire Appeal and further donations have been made by PACK & SEND franchisee partners.

    McDonald’s Australia have supported the bushfire appeal by: donating $500,000 to the Australian Red Cross Disaster Relief and Recovery Fund, and matching employee donations; implementing in-restaurant donations; and providing free meals and bottled water to firefighters and community members in impacted areas.

    Quest Apartment Hotels donated of $10,000 to bushfire relief and established a GoFundMe page to encourage further donations from franchisees, suppliers and other stakeholders.

    JAX Tyres customers and store teams around the country helped to raise over $75,000 for the Red Cross Disaster Relief and Recovery Fund. In January through donations from tyre sales.

    7-Eleven committed $250,000 to support bushfire relief efforts, allocating this money to the bushfire relief efforts in NSW and Victoria, and for wildlife rescue and rehabilitation across both states.

    Aussie Pooch Mobile Dog Wash donated a bulk quantity of blankets and toys to the Rescue Collective, while Aussie Pooch Mobile groomers washed fire victims’ dogs free of charge, donated money and helped out in any other way they could.

    Nando’s committed $50,000 to Foodbank Australia to help provide food and groceries to those who urgently need them.

    BNI Foundation Australia fundraised to support families with children affected by the bushfires, receiving donations from 10 different countries. The franchise has provided grants to families to help acquire children’s clothes, uniforms, shoes and school supplies so they can get back to school with the essentials.

  • Winner of the FCA’s 2019 Franchisor Social Responsibility Award, Muffin Break, has made an ongoing commitment to sustainability by reducing the coffee cup waste stream.

    “Over five years ago as a team, Muffin Break decided that landfill was not going to be our legacy and we went about finding a partner that would help us change the game in relation to sustainability,” said Natalie Brennan, General Manager of Muffin Break.

    In August 2018, Muffin Break partnered with coffee cup recycling program, Simply Cups, to divert 11 million takeaway coffee cups from Australia’s landfill in an initiative that sees Muffin Break pay to have one cup recycled by Simply Cups for every takeaway coffee or hot drink sold by the franchise.

    In addition, Muffin Break offers a 30-cent discount on coffee for customers every time they bring in a reusable cup for their hot beverage.

    The franchise has also changed from black lids to white lids on their take-away cups to improve recycling outcomes and reduce the impact on Australia’s landfill, as well as removing single-use plastic bags, plastic straws and plastic cutlery and replacing these with more sustainable options across the network.

    Muffin Break has also focused on educating kids on the topic of sustainability by running Little Grower workshops, where children are taught how to plant and care for a seedling which they get to take home at the end of the workshop.

    “Our franchisees have been really behind the whole process of sustainability. They’re the ones who have driven it,” said Brennan.

    “A big thank you to MYOB and FCA this Award but I hope that it might be one of the last awarded. Our hope is that sustainability is not special, it’s just business as usual.”

    Extracted from article originally published in issue 4 of The Franchise Review 2019, the Official Journal of the Franchise Council of Australia.

Small Business

  • Growing concern about the continuing impact of government lockdowns is undermining business optimism of recovery in the next six months, according to the latest Australian Franchise Business “Pulse Check” survey.

    The June Quarter 2021 survey included responses from 148 Australian franchise brands covering 23,177 business outlets employing 141,072 Australians.

    Pessimism about business conditions in the next six months jumped to 22% in the June quarter from 6% in the March quarter and 10% in the December quarter. Only 48% of respondents were optimistic (down from 85% in the March quarter) with 30% of respondents neutral about the outlook.

    Forward sentiment in relation to revenue expectations weakened significantly with 45% of respondents expecting a revenue fall (up significantly from 13% in the March quarter and 11% in the December quarter).

    The greatest concerns or challenges reported in the June 2021 quarter were the risk of further government lockdowns (84%), availability of suitable employees (55%), wellness of franchisees and support staff (50%) and supply chain issues due to border closures (44%).

    However, 54% of networks reported they had revenue increases exceeding 10% in the June quarter (up from 45% and 33% in the previous two quarters) reflecting the relative solid trading performance of many franchises up to the end of June.

    Stronger trading was reported across the health, sport, recreation, and fitness industries. Respondents from printing and retail food indicated comparatively weaker performance with lockdowns and border closures remaining as significant issues.

    A total of 419 new units were opened across the brands of 64 respondents, predominantly in the categories of home maintenance, retail food and service industries. A total of 187 franchised units were permanently closed by 27 respondents, predominantly in the retail food, services, fitness and automotive categories.

    “After four successive quarters, the latest lockdowns and renewed uncertainty have shown a strong negative shift in business sentiment,” said Franchise Council of Australia CEO Mary Aldred.

    “Businesses that are part of a franchise network appear to be outperforming many other parts of the small-medium business sector but they are still dealing with many challenges and are nowhere near their level of revenue pre-COVID.”

    “The survey shows that franchise businesses are clearly very concerned about not just lockdowns but also the wellness of their support staff and the challenges facing their franchisees,” said Ms Aldred.

    Other key findings:

    • The majority (60%) of franchise systems were planning to or were already actively encouraging staff to get vaccinated.
    • The majority of respondents (43%) were unlikely or had already decided they would not be providing incentives to their staff or network for vaccination, a further 40% were undecided.
    • In relation to providing incentives to customers, 73% indicated they were unlikely to or would not and only 3% planned to place restrictions on customers who were not vaccinated.
    • Queensland remained the strongest performing state for franchises over the past 12 months at 34% of respondents (although lower than the previous quarter – 41%). This was followed by NSW (22%), WA (21%) and VIC was again poorest performer (10%).
    • Respondents indicated that in the next twelve months they were most likely to expand business in NSW (42%). followed by QLD (23%), VIC (22%) and WA at (10%).
  • Franchise networks have reported further recovery in revenues in the March quarter as positive sentiment strengthens, according to the latest Australian Franchise Business “Pulse Check” survey undertaken for the FCA by FRANdata Australia.

    However, the risk of further government lockdowns remains a key challenge, with 51% of survey respondents citing this as their main ongoing concern.

    The Pulse Check survey includes responses from 113 Australian franchise systems covering 21,368 business outlets.

    45% of respondents reported March 2021 quarterly revenue increases exceeding 10% compared to the March 2020 quarter. This is up from 33% in the previous quarter, reflecting the ongoing general recovery in trading conditions and a solid performance by many franchise networks.

    The key areas reporting stronger trading were the health, building and construction, and courier and freight related industries.

    Cafes, sit-down restaurants and travel businesses continued to report comparatively weaker performance.

    “Business recovery is steadily improving and the Australian economy is in a strong position which is critical boost for small business right now”, said Franchise Council of Australia CEO Mary Aldred.

    “As our results show, the risk of snap state government lockdowns is the number one cause for concern across the majority of businesses surveyed. The FCA is recommending a consistent national approach on agreed thresholds for snap lockdowns, to improve business and community confidence,” said Ms Aldred.

    While the risk of further lockdowns and border closures was the major concern for more than half of survey respondents, other challenges included franchisee recruitment (33%), compliance (32%), wellness of franchisees and staff (32%) and workplace relations issues (30%).

    Despite these challenges, positive forward sentiment strengthened in the March 2021 quarter with 65% (up from 51%) of respondents anticipating a moderate (59%) or significant (6%) increase in revenue in the upcoming June quarter.

    41% of respondents identified Queensland as their strongest performing state or territory over the past 12 months, followed by New South Wales (23%), Western Australia (16%) and Victoria (11%).

    Respondents indicated that in the next twelve months they were most likely to expand business in New South Wales (49%), followed by Queensland and Victoria (both at 18%) and Western Australia at (10%).

    Overall optimism increased to 85% (up from 75% in the December survey) towards business conditions for the next six months.

    A total of 520 new units were opened across 85 brands during the March quarter. These were predominantly in the categories of retail stores and home maintenance services. For the corresponding period 109 franchised units were permanently closed across 28 franchise networks, predominantly in the retail food (café) category.

  • The Franchise Council of Australia (FCA) has honoured some of the nation’s best and brightest in business at the 2020 MYOB FCA Excellence in Franchising Awards.

    This year’s winner of Australian Established Franchisor of the Year is The Cheesecake Shop. Now in its 27th year of franchising, with 228 cake bakeries across Australia, New Zealand and the United Kingdom, The Cheesecake Shop took out the category from finalists Just Cuts, Rapid Tune and Banjo’s Bakery Café.

    “Putting this award together with our team, one of the things I learned was the average tenure of our 50-odd staff as a franchisor was about eight-and-a-half years, and that says a lot for their commitment and their passion and their love for our brand. This award is for them,” said Ken Rosebery, Managing Director, of The Cheesecake Shop in accepting the Award.

    “It’s been a trying year for everyone and this is a big achievement for the business. To all of the head office staff and the franchisees – we’re absolutely ecstatic,” added The Cheesecake Shop’s General Manager of Marketing and Operations, Peter Dable.

    SILK Laser Franchising was named the Australian Emerging Franchisor of the Year, with MoneyQuest Australia, Home Caring Franchise and Fitstop Australia all named as finalists in the category.

    “It’s been a pretty amazing journey for our company. We started all the way back in 2009 with one staff member and one laser in Adelaide. We’ve now been franchising for four years and are getting close to 60 clinics nationwide,” said SILK Laser Clinics CEO, Martin Perelman.

    The International Franchisor of the Year Award was taken out by XTEND Barre, who in accepting the Award shared their story of innovation that saw the brand convert their bricks and mortar business to be entirely digital within 36 hours as COVID hit hard.

    Poolwerx took home the Excellence in Marketing Award while the Excellence in Franchise Innovation Award was won by the RAMS Product, Construction Lending Proposition.

    FC Business Solutions was named this year’s Supplier of the Year.

    The vital role that being part of a team and their local communities plays for franchisees was on show as Bakers Delight and ANZ Mobile Lending took out two franchisee category awards apiece.

    Chris McIntyre of ANZ Mobile Lending on Queensland’s Gold Coast was named Multi-Unit Franchisee of the Year for 2020 and Sallie Williams of ANZ Mobile Lending, Wanneroo was named Single Unit Franchisee of the Year, less than two staff for 2020.

    Andrew Toogood of Bakers Delight, Mount Gambier – Commercial Street won the Single Unit Franchisee, two or more staff Award while the Franchisee Community Responsibility and Contribution Award was won by Geoff and Jo Harrington of Bakers Delight, Southern Highlands, marking the second consecutive year the brand has taken home this Award.

    “There are three main groups that I need to thank tonight. The first is my team of 18 people – without them, this wouldn’t be possible. Secondly, the community of Mount Gambier. We’re only a small regional centre and we get behind the town and they get behind us. Thirdly, the franchise team at Bakers Delight,” said Andrew in his acceptance speech.

    Field Manager of the Year was awarded to Phil Colburn of Poolwerx, while Wendy Donaldson of Narellan Pools was named Franchise Woman of the Year.

    “The 2020 MYOB FCA Excellence in Franchising Awards showcase just some of the franchisors, franchisees and individuals who continue to make outstanding business contributions in extraordinary circumstances,” said Franchise Council of Australia CEO, Mary Aldred.

    “The achievements of all award winners and finalists in what has been an extremely difficult year for small business owners is truly remarkable.”

    “I congratulate winners and finalists on their exemplary performances, resilience in the face of adversity, and continued contributions to their franchise systems and communities.”

    A total of 12 Excellence in Franchising Awards were presented on the evening, which was proudly sponsored by MYOB.

    2020 Excellence in Franchising Award Winners

    Australian Established Franchisor of the Year – The Cheesecake Shop

    Australian Emerging Franchisor of the Year – SILK Laser Franchising

    International Franchisor of the Year – XTEND Barre

    Multi-Unit Franchisee of the Year – Chris McIntyre, ANZ Mobile Lending, Gold Coast x 2

    Single Unit Franchisee of the Year, two or more staff – Andrew Toogood, Bakers Delight, Mount Gambier – Commercial Street

    Single Unit Franchisee of the Year, less than two staff – Sallie Williams, ANZ Mobile Lending, Wanneroo

    Franchise Woman of the Year – Wendy Donaldson, Narellan Pools

    Field Manager of the Year – Phil Colburn, Poolwerx

    Supplier of the Year – FC Business Solutions

    Excellence in Marketing – Poolwerx

    Excellence in Franchise Innovation – RAMS Product, Construction Lending Proposition

    Franchisee Community Responsibility and Contribution – Geoff and Jo Harrington, Bakers Delight, Southern Highlands

  • The Franchise Council of Australia has welcomed the Queensland Government’s implementation of the national commercial leasing code. This follows the ACCC’s recent decision to allow tenants to collectively bargain with landlords if they’ve been adversely affected by COVID-19, which has also been welcomed by the FCA.

    FCA CEO Mary Aldred says the ACCC’s decision recognising the urgency for retailers and landlords to collectively negotiate rent relief is an excellent outcome following the joint application to the ACCC by the FCA with the National Retail Association, Australian Hotels Association and the Pharmacy Guild.

    The FCA had also directly raised concerns with Queensland Small Business Minister Shannon Fentiman that franchisees who had their head lease held by their franchisor may not be covered under the national leasing code principles where the franchisor was above the $50,000 threshold set by JobKeeper eligibility. This meant many franchisees would be excluded from being able to access provisions in the code, such as the proportionality principle, where a drop in turnover caused by the current COVID-19 economic environment should be met by a commensurate reduction in rent.

    According to Ms Aldred, Queensland’s implementation of the national commercial leasing code sets out the most balanced and fair playing field for small businesses and franchisees in the country. State parliaments around Australia are currently implementing the national commercial leasing code, agreed to by the National Cabinet process.

    “Small businesses have been hit hard by COVID-19 and although restrictions are starting to be eased, the impacts of COVID-19 on individual businesses and the economy nationally will be felt for some time,” says Ms Aldred.

    “The ACCC’s decision to allow tenants and landlords to get together and collectively negotiate outcomes that optimise businesses’ ability to meet rental obligations will support their ongoing sustainability. “

    “On behalf of thousands of small businesses, we also thank Minister Fentiman and the Queensland Government for being willing to listen to feedback from small business and respond by ensuring there is a fair and level playing field set for everyone. This will give mum and dad small businesses owners in Queensland every shot at making it through the current Covid-19 environment to the other side,” said Ms Aldred.

  • Under the JobKeeper Payment announced by the Federal Government, businesses significantly impacted by the Coronavirus outbreak will be able to access a subsidy from the Government to continue paying their employees.

    This assistance is designed to help businesses to keep people in their jobs and re-start when the crisis is over.

    Key points:

    The JobKeeper Payment is a subsidy to businesses, which will keep more Australians in jobs through the course of the coronavirus outbreak.

    The payment will be paid to employers, for up to six months, for each eligible employee that was on their books on 1 March 2020 and is retained or continues to be engaged by that employer.

    Where a business has stood down employees since 1 March, the payment will help them maintain connection with their employees.

    Employers will receive a payment of $1,500 per fortnight per eligible employee. Every eligible employee must receive at least $1,500 per fortnight from this business, before tax.

    The program will commence today, 30 March 2020, with the first payments to be received by eligible businesses in the first week of May as monthly arrears from the Australian Taxation Office. Eligible businesses can begin distributing the JobKeeper payment immediately and will be reimbursed from the first week of May.

    Eligible employers will be those with annual turnover of less than $1 billion who self-assess that have a reduction in revenue of 30 per cent or more, since 1 March 2020 over a minimum one-month period.

    Employers with an annual turnover of $1 billion or more would be required to demonstrate a reduction in revenue of 50 per cent or more to be eligible. Businesses subject to the Major Bank Levy will not be eligible.

    Eligible employers include businesses structured through companies, partnerships, trusts and sole traders. Not for profit entities, including charities, will also be eligible.

    Full time and part time employees, including stood down employees, would be eligible to receive the JobKeeper Payment.  Where a casual employee has been with their employer for at least the previous 12 months they will also be eligible for the Payment.  An employee will only be eligible to receive this payment from one employer.

    Eligible employees include Australian residents, New Zealand citizens in Australia who hold a subclass 444 special category visa, and migrants who are eligible for JobSeeker Payment or Youth Allowance (Other).

    Self-employed individuals are also eligible to receive the JobKeeper Payment.

    Eligible businesses can apply for the payment online and are able to register their interest via https://www.ato.gov.au/general/gen/JobKeeper-payment/ato.gov.au

    JobKeeper Payment information: View the factsheet at https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_supporting_businesses_1.pdf or read the Prime Minister and Treasurer’s Media Statement at https://www.pm.gov.au/media/130-billion-jobkeeper-payment-keep-australians-job

    Employer information: Employers must elect to participate in the scheme. You can do this at: https://www.ato.gov.au/general/gen/JobKeeper-payment/. To view a factsheet on eligibility and the application process, visit https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_Info_for_Employers_0.pdf

    Employee information: A factsheet for employees is available at https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_Info_for_Employees_0.pdf