News and views in the franchising arena
Ketchell case not over yet
The peak representative body in the $128 billion franchising sector, the
Franchise Council of Australia (FCA) has decided it will fund an appeal to the High Court to challenge a ruling it believes undermines the sector.
The FCA will support an appeal in the Master Education Services v Ketchell case. FCA executive director Steve Wright said the move had been agreed by the board of the FCA after extensive consultation with franchisor and franchisee members across the country.
"We believe a High Court ruling is necessary to restore certainty for the sector," Wright said.
"The ramifications of this case are of serious significance for the franchise sector Australia-wide. It is the biggest single legal issue the FCA has faced in its 25-year history," he said.
At the centre of the Ketchell case is the ruling by the NSW Court of Appeal that a breach of the Code of Conduct disclosure requirements rendered a franchise agreement illegal. "This approach appears to us to be at odds with common practice in commercial law," Wright said.
"The FCA supports the Code of Conduct and the disclosure regime which adds weight to it. We regard it as a positive contributor to good franchise practice – and an ingredient in the growth and success of the sector," he said.
"It does not seem right to throw that away in a case where the intent of the Code has been complied with, as is the case in Master Education Services v Ketchell. "The NSW Court of Appeal ruling potentially opens a door to opportunistic litigation which could be time-consuming, expensive and distracting, with serious negative impact on franchisors and franchisees," Wright said.
"Legal actions based on the Ketchell precedent, as it currently stands, could be more about gaining commercial advantage than resolving genuine contractual disputes. The issue could be detrimental to the prospects of a franchisee getting a fair price for sale of a business. We don't see these possibilities as good for the sector – and that is why we are seeking guidance from the High Court."
New finance franchise One of Australia's fastest growing mortgage lending and loan broking businesses –
Club Financial Services Pty. Ltd. – is changing operation to a franchise business, at the same time changing its name to Club Finance Pty. Ltd. Between 50 – 70 new
financial services franchise operations are scheduled to open under the Club Finance banner by the end of the financial year and 100 by year's end and Club Finance is now seeking new franchisees wanting the opportunity to enter the finance industry.
As part of the new Club Franchise operation, the Club Financial Services business, which has been mainly in South Australia, has also merged with The Mortgage Bureau, which has largely operated on the eastern-seaboard.
Between them the two bodies have more than 65 consultants, the majority of whom are moving to franchise operations under the Club Finance banner.
Managing director Andrew Clouston said "Club Finance will assist new franchisees with site selection for their office while co-ordinating the design layout and help establish the business premises. Experience in the finance industry is not essential, as comprehensive upfront and ongoing training is provided."
Clouston said all Club Finance franchisees have the opportunity to earn significant income through excellent upfront and trailing commissions, while multiple income streams are available by offering insurance, accounting and other in-house related products.
A national marketing plan has been developed to take the Club Finance product Australia-wide, including further product development, advertising and public relations exposure both at a national and local level.
Fix for hair and beauty Haircare
retail beauty franchise Price Attack is launching FIX Hair Beauty Solutions, a hair and beauty salon. The new concept will be focused on providing personal service, top brands and expert advice. Among the premier haircare brands will be ghd, Sebastian, Redken, Loreal, American Crew and Paul Mitchell.
Ranges from Napoleon Perdis, ModelCo and Bloom will be on the beauty shelves. The development is courtesy of new owners Barry and Carol Jarred, who bring 30 years expertise to the forum. "We like to think of FIX as a complete one-stop beauty shop. Nowhere else canbrand-savvy customers find professional haircare and beauty products, expert advice and genuine solutions in the one location," said Barry Jarred. The first FIX outlet was set for an April opening at the Gold Coast's Pacific Fair.
Pizza Melts into Crust Crust Gourmet Pizza Bars has acquired Sydney take away operator Melt Gourmet Pizza Bar, which has two stores in Neutral Bay and Lane Cove.
Crust managing director, Costa Anastasiadis said "This acquisition ultimately helps us to strengthen the Crust
fast food pizza franchise brand and generate further business growth within the franchise industry. We're currently researching sites for additional store openings across Australia and we are looking to these two new stores to grow our market share within Sydney. Melt Gourmet Pizza Bar was owned and run by award winning pizza maker Peter Augoustis, Melt counts the 2007 International Pizza Expo award for Best International Pizza, and the 2006 Dairy Farmers Best of the Best Pizza Challenge award amongst its achievements. Augoustis will continue to operate the two former Melt stores, and will take up a position on the Crust management board.
Cleveland is number 25 for Pizza Caper Gourmet pizza lovers in Brisbane now have another venue to indulge their tastes: Pizza Capers' 25th store has opened in Cleveland with franchisee Matt Woosnam.
"I knew I wanted to go into business for myself but understood the risks were high but after investigating franchising I knew it was the safer way to achieve my goal of owning my own business."
Woosnam said Pizza Capers' open book approach to potential storeowners was a key factor in deciding to become a franchisee.
"I looked at everything from bikes to Boost Juice and what attracted me to Pizza Capers was how honest and open they were from day one. Unlike some other franchisors they had no problem with sharing information about the store's earning potential. "My first goal will be building the reputation and turnover of the Cleveland store and once I've achieved that I'll consider opening another store before the end of the year. My long-term plan is to own two to three franchises in the area."
Parental leave benefits
Beacon Lighting Australia's leading national lighting retailer Beacon Lighting supports the introduction of a national paid parental leave scheme, stating that its own offer of six weeks' pay over a six month period for permanent company employees has shown significant benefits since its introduction three years ago.
Beacon Lighting human resources manager Elizabeth Mikkelsen said the primary benefit of providing paid parental leave is in staff retention and that the scheme also made Beacon a more attractive employer to potential staff. "In a tough employment market, paid parental leave is even more important. It isn't easy to fill vacancies so we want to do all we can to retain our existing employees and encourage job seekers to work with us," Elizabeth commented.
Dollar additions for Allied Allied Brands Limited has initiated new major supplier agreements with a view to providing capital and profit sharing arrangements related to new store openings over the next six years. This will assist the company in exceeding the original profit expectations from all its divisions and underpins the future growth of the business for the next six years. This means a gain of more than $30million in capital and additional profits during the six-year period. Allied Brands has 222 franchisees across its four brands of
Baskin-Robbins Ice-Cream,
Kenny's Cardiology,
Cookie Man, and Awesome Water.
Profit increase for Bartercard
Bartercard Australia has celebrated its 17th birthday and last year's management buy out (MBO) with a 52 per cent jump in profit for the six months to December 2007 compared with the same period in 2006.
Bartercard chief executive officer Trevor Dietz expects an even stronger second half year as Australia's economy slows in a tightening global economic environment. "This is a time where Bartercard does best and can help small and medium businesses retain their cashfiow like no other business tool," Dietz said.
"Bartercard is re-inventing itself with a huge investment in recruiting new staff and a renewed commitment to staff training and customer service," Dietz said.
"In addition to the investment in people, we will shortly be announcing a whole new range of business initiatives that will give members even more opportunity to gain substantial cash savings."
From its initial beginnings in 1991, Bartercard has become a global business with 103 offices (most of which are franchises) in 12 countries, with annual trade volume globally of $1.3 billion in cashless transactions. There are now 48 Bartercard offices across Australia (44 of which are franchises) and Bartercard Australia has more than 20,000 members.
Myer looks smart LookSmart Alterations, a tailoring franchise, has becom first such service to be available on the fashion floor of department store with the opening of its first Myer cons store in Melbourne.
The new LookSmart Alterations service, located on the third floor of the Bourke Street store, will give shoppers the convenience of having their new or existing clothing tailored in-store. The most common of alterations requirements, the shortening of pants, will be completed within an hour or the service is provided free. Other popular services include resizing, restyling and repairs.
Myer fashion brands will also benefit from the LookSmart service with an additional selling point for customers that want ready to wear items, are hesitant about the fit or don't have the time for alterations. Following the launch of the concession at Myer Melbourne, LookSmart Alterations will also open stores in Myer Adelaide and Sydney between March and May this year.
Towering Quest The Docklands area of Melbourne is set for 120 new
Quest Serviced Apartments as part of the development of a $300 million mixed use building at the North Fast Stadium Precinct to be known as Lacrosse Docklands.
Quest will take up the whole West tower of the twin tower development in a 10 year lease, with options. The development will include 5,000m2 or retail space, most with direct access to the Stadium Concourse, 4,000m2 of office suites with fully equipped board rooms and 322 car spaces.
The lease from Quest will provide the pre-commitment to underpin the project, giving it the green light for commencement of construction in mid-2008.
Paul Constantinou, chairman of Quest said, "We are extremely excited about the North East Stadium Precinct project as we see this as a flagship site which will complement our existing Docklands' business."
Constantinou said that Quest continues to enjoy a high occupancy rate in its current 135-key operation in Docklands.
"We have current alliances with corporate tenants in Docklands and are expecting more to set up operations there in the next couple of years. The North East Stadium Precinct is ideal for us because we will not only capitalize on the growing corporate market within Docklands, but will also seize a share of the market from the Western end of the CBD due to the direct link via LaTrobe Street."
According to VicUrban's general manager Docklands and major projects, Michael Hynes, the development will play a key role in creating a vibrant urban stadium environment.
"With its combination of residential and commercial aspects, active retail edges along all street frontages and a pedestrian connection through the building, Lacrosse Docklands will ensure this precinct can not only cater for large events, but has something to offer the whole community and continually thrives."
Winning multiples Mortgage brokers Greg McQueen, Michelle Towner, Dennis Aplin, and Richard Crommelin blitzed their rivals to win the coveted 2007
Mortgage Choice National Multi Franchise Owner of the Year award as well as the highest honour, National Franchisee of the Year. The business covers an amazing nine franchises – the group's cache is in excess of any other Mortgage Choice franchisee – and has the marketing areas of: Central Northern (WA), Fairfield (WA), Northern Suburbs (WA), Western Suburbs and CBD (WA), Cronulla (NSW), CBD -Adelaide and Prospect (SA) and Mitcham/Happy Valley (SA).
This article appears courtesy of Franchising Magazine.25-Jun-2008