Battery World drops franchise fees in new agreement

By Sarah Stowe | 25 Oct 2017 View comments

Inside Franchise Business: a new agreement at Battery World changes the franchisees role.National niche retailer Battery World is celebrating the opening of its 100th store, its 20th year of trading, and at the same time introducing a new franchisee agreement with reduced royalties and lower fees.

Franchisees now need to add in a mobile service to their operation. The overhauled 20 year old agreement requires franchisees to commmit to the 24-hour battery roadside assistance.

General manager Rowan Hodge explained “Most of the reduction in fees will happen as a result of a major new incentive benefiting franchisees who carry out Battery World’s national 24-hour roadside service. This is not negotiable: and it is a service that has been a common denominator among our most successful stores for 20 years.

The new agreement went live on October 1.

The company’s most successful store for 10 years in a row, and the 2016 top franchisee, Townsville’s Greg Leslie says signing the new franchise agreement was a no brainer. While happily operating under the existing agreement, Leslie says increased store and franchisee numbers coupled with new operating and sales procedures meant the document needed updating.

“There was a lot of dead wood in the existing document: bylaws that were distracting and inhibiting but which were never acted on before,” Leslie said.

“This is a cleaner document addressing retailing changes and challenges over the last two decades as well as including incentives to drive the brand both through recruitment and retention. The term on the oldest agreements was an initial term of five years with a further five year option: or since 2015, six by six.

“This new document allows you a straight 12 years with voluntary renewals anytime. Add to that if a franchisee sells their business, the buyer also gets a full term, so as a seller you would always bank maximum value. This not only means better business planning but also increased security to your business.”

While Leslie has been with the brand 12 years, Cairns’ franchisee Rob Bonser, Darwin’s Kerry Boyd and Perth’s Tom Spence have been with the company for the long haul – the full 20 years.

Spence, president of the Franchise Advisory Council, agrees the company’s commitment to 24 hour battery roadside assistance is crucial.

“It’s madness that we are seeking out national accounts, but we still have franchisees reluctant to do this part of the business: the new franchisee agreement addresses this. “Without trivialising it: we are a franchise and just as you cannot have one McDonald’s store selling cheeseburgers and another not – we need to offer the same level of service across over 100 stores. Once you have rescued someone from the road late at night they are pretty much a customer for life.”

With 20 years under her belt, working between the very successful Cairns and Darwin stores, Kerry Boyd says anyone joining the group has only to look at the top sales volume stores to see the secret really is roadside.

“It really is the icing on the cake and makes the big stores really big,” she said, “Even though it was part of the old agreement: – this new agreement makes it clear that a commitment to roadside is not optional if you want to be successful.

“That being said the deal has been sweetened with extra incentives like a reduction in royalties – so that should help with those franchisees who might find it confronting.

“Like anything new from a franchisor I have to admit I was a bit cynical about all the incentives being offered. People are naturally wary that a franchisor is in it to make money – but the exciting part of this new agreement is there is an understanding that if we make more money, they make more money.”

Hodge said “This agreement includes lower fees to the franchisor and lower royalties to the franchisor which virtually guarantees every single franchisee would be financially better off as a net result of either or both of these new concessions.

“If we will wind up earning less: why would a franchisor possibly want to reduce its fees and revenue base?  The answer lies in a very simple franchising philosophy: remember whoit is you work for. In the Battery World franchise network, like many elite franchising systems, we choose to take the view that we work for the franchisee, and our pinnacle goal is to help franchisees grow their wealth.”

The company has also reset with a new logo and trademark, ‘Batteryologists’, a reference to the obsession with product expertise that has fueled growth since 1997.