The Wendy’s franchise talks
What do you consider to be your product offering’s unique selling point?
• Some 89 per cent of Australians over the age of 13 know our Wendy’s franchise brand.
• Making and selling great tasting products that differentiate us from our competitors is a key success factor for Wendy’s. For this reason, we use a range of ingredients either made by our own ice cream factory, or provided exclusively from our suppliers. Only approved Wendy’s ingredients and products can be used and sold in our stores.
• With our established reputation for having the best shakes, an exclusive range of scoop ice cream, ice cream cakes for every occasion and a number of other core product categories including Smoothies, SupaSoft and our Lite Range, we ensure that at Wendy’s there is something for everyone.
What evidence exists that the fast food, restaurant franchise sector has room for more franchisees?
• Rapid growth of the franchise industry is due to everyday Australians wanting to be in control of their own destiny and working hard to achieve that goal.
• The Franchising Australia 2004 results provide evidence of the continuing growth and strength of the franchising sector in this country. Whilst there appears further room for growth domestically, many franchisors have begun exploring expansion opportunities internationally. Low levels of disputation and low failure rates indicate that franchising offers small business investors security and stability. In brief, the Australian franchising sector continues to mature and operate professionally.
What are the start-up costs and ongoing fees associated with being one of your franchisees?
• Store cost between $230,000 to $280,000 (ex GST)
• Franchise service fee is 6 per cent of sales
• Recommended net worth is 35 per cent of total investment (unencumbered)
• Initial working capital approx $10,000 (unencumbered)
• Royalties are six per cent
• Marketing fund contribution is five per cent of sales
Key Notes: Store cost includes the franchise fee, training, shop fittings and equipment.
On average, how much net profit can a typical franchisee earn per year?
The top 25 per cent of stores (based on profit) from 2004/2005 had average sales of $485,000 and average earnings before interest tax depreciation and amortisation of 22 per cent.
What is your franchise’s success/failure rate?
• Wendy’s currently operates 300 stores throughout Australian and New Zealand, with a combined annual turnover of over $90 million. On average 750,000 customers visit our counters each week.
What do you see as the biggest trend happening in your market segment?
• Shift from ice cream to other products such as hot dogs and drinks.
• Extreme portability (one handed)
• Emotional and physical well-being