Fresh air and franchises
JimÕs Mowing franchisors Des Warren and Trish Melgaard, founder and franchisor of Outdoor Concepts (previously Mr Carports), Brian Rohan, and director Rose Vis from VIP address eight important questions about their franchise systems and franchisees.
1. In your system, how welcome are franchisees that just want to buy themselves a job and not develop a business?
Over the years weÕve met with many prospective franchisees and the one thing we look for above anything else is some display of passion. Whether it is a desire to provide great customer service, a desire to build a business to a certain level, or a general passion for gardening, these are the candidates we are most interested in because we know they will generally be very successful. Experience has shown that those candidates who are just looking for a job will generally not do as well.
I think itÕs fair to say that all of our franchisees love the business and are passionate about what they do. They enjoy the diversity of designing structures, dealing with customers and project management.
If someone wanted to just buy themselves a job I donÕt think they would want to join Outside Concepts, because there is very limited income for the first six to 12 months. It takes time to build the business and provide a substantial income and many of our new franchisees remain in their existing job for a while or take part-time work while the business is building.
Prospective franchisees looking for a job, as opposed to owning their own business, are readily welcomed to the V.I.P. interview process. Our franchise development managers explain that while they are buying themselves a job, there is more to it than turning up at 9am and clocking off at 5pm.
We explain to them that their income comes about through their own endeavours and they therefore reap the rewards of their own hard work. And, as it is a business, there is bookkeeping, customer service, and training involved.
Ultimately it is the prospectÕs attitude to their job that will make or break their career as a V.I.P. franchisee.
Sometimes franchisees who want to buy themselves a job are not in the financial position to be able to do so. Recognising this, we launched V.I.P. Money, a financial brokering arm which will research all the current loans on the market and finds the one to best suit the individual prospectÕs needs.
2. How many franchisees renew their franchise after the first term?
Franchise agreements in JimÕs Mowing are for a 10 year term. On average a franchisee stays with us for just under six years in our region (South East Melbourne). However we have eight out of 40 franchisees who have been with us for longer than 10 years and re-signed for another period.
Importantly, there is no cost when signing up after the initial period. Personally I think that this is exceptional, given that a career is generally regarded to be of a much shorter duration these days. Franchisees are more likely to retire from the workforce or have a career change rather than not renew their agreement, which I feel is a very positive reflection upon the system.
We are proud to say that 100 per cent of our franchisees have renewed their franchise, which is testament to the success of our business model and dedicated franchisees.
We offered a 20 year franchise term; there have been a handful of franchisees who have stayed the full 20 years, some have left and some are still operating after renewing a new term. Due to demand, we have now in place a five year term, with the option of a five year renewal. We have yet to see these come up for
3. How well do you think franchisee expectations are met by the system and its demands?
Measuring franchisee satisfaction is critical in any system and its something that a lot of time and energy is put into within JimÕs. The success of any franchise system depends on the satisfaction of its franchisees; it is a simple formula. The key is to understand what the franchisees need to make them successful, deliver it and then measure its success.
This is a dynamic process and must evolve to meet increasing demands from franchisees.
Key expectations would include level of income, volume of new work delivered, franchisor support, availability of training material, availability of systems to support their businesses, regular training and networking meetings. Apart from these basic measures, I believe that there are more subtle expectations of franchisees.
The key here is to respectfully treat every franchisee as an individual, recognising their specific expectations and addressing them professionally and compassionately.
We regularly commission surveys both with our customers and franchisees, and the results indicate that we are performing at a high standard. Despite this, we are always striving to improve our performance and direct line of communication with franchisees.
In addition, an independent research company 10 Thousand Feet conducted an industry-wide franchisee survey last year and we performed very well. In terms of how passionate franchisees are about their customers, brand, product or service they offer we ranked second and then ninth in the lifestyle satisfaction and support from the franchisor categories. We were also placed sixth in the rewards section of the survey, which examined the level of financial and social rewards enjoyed by franchisees.
It is important to have frequent and open communication lines in case franchisees do experience difficulty. Running your own business is a hard and complicated task; however we make it easier through effective, hands-on and ongoing training programs from everything from customer service, ATO compliance, product guide and V.I.P. procedures to follow.
We also have training manuals, and of course, a multi award winning franchise system in place. The various levels of support staff (local, state and national) are available for franchisees to discuss any queries they may have.
4. What aspects of the business do you think franchisees in general find most challenging?
There is no question in my mind that the back office administration is the most challenging issue. While it is not all that difficult, it does require some degree of discipline and basic knowledge of bookkeeping and work scheduling.
Thankfully these are tasks that most people can learn quickly, or their partner, colleague or bookkeeper can do on their behalf. We are strong advocates of outsourcing those things that we donÕt enjoy or are not good at. This frees up time for family or work activities and increases our satisfaction. A great example here would be a JimÕs Mowing franchisee outsourcing their bookkeeping to JimÕs Bookkeeping. This is a common scenario.
Like in any new business, every aspect is challenging, but as franchisees learn and understand more about the business it becomes a lot easier. For many new franchisees the financial control of their business is always a challenge, but as a franchisor weÕre able to offer a lot of guidance. We also provide franchisees with a mentor when they start and then a business coach to provide ongoing support.
Franchisees who have never owned their own business before but have been in the working world for years often find it challenging to understand the requirements of the management side of the business. Bookkeeping, cash flow and working by themselves is often a challenge at first, but our support team does a great job at alleviating these problems and being available to franchisees that have concerns.
5. How do you benchmark performance?
I believe that my role is to provide industry best practice benchmarks to our franchisees, many of whom delight in not only achieving these but raising the bar, and that of course is good for all franchisees.
An important point is to be made here; franchisees are individuals who are mostly on different journeys, their dreams and aspirations vary according to a range of factors. What is important to us is that franchisees are supported to achieve their particular benchmarks, whatever they may be. Achieving these makes for a satisfied and successful franchisee
Our business coach works very closely with each franchisee analysing their performance-to-date and helping them to set budgets and plans for the future.
Franchisee performance is ultimately up to them, as at the end of the day, it is their business, and their work ethic and willingness to follow the proven system that will lead to their success.
Having said that, when we review a franchisee who feels that they are not performing as well as they had hoped, we look at their quote conversion ratio, customer retention ratio and number of complaints to make sure their customer service skills are up to standard; as well as working through their personal and business goals to ensure that we are doing all we can to help them achieve
6. How is sub-standard performance handled?
The first point to make here is that sub-standard quality of work is not acceptable. This rarely occurs, however when it does, the work will be rectified urgently at no additional cost to the customer.
I am pleased to say that it is even more unusual to hear of sub-standard customer service. If this were to occur it would be quickly followed by a mentoring session. Our recruitment and selection process is such that I wouldnÕt expect JimÕs to be allowing inappropriate people into the system.
When we find a problem with sub-standard performance, we can usually identify the problem very quickly. If, for example, leads are down, it may be due to insufficient advertising. The franchisee may require extra training but usually the business coach can promptly determine the problem and provide advice. Monthly branch meetings are a great opportunity for franchisees to discuss any concerns with more experienced franchisees and find solutions.
If we receive a complaint from a customer of a franchisee, we hear both sides of the story before we analyse the situation and work through the issue to get a resolution agreed upon by all parties. Sometimes it is the franchiseeÕs fault, sometimes it is the end consumerÕs; we understand that we will all make mistakes.
In regards to a franchisee that is non compliant, we set up a meeting with the franchisee and look at their situation, and what their personal and business goals are. We discuss the options that are available and develop an action plan. Our support staff are methodical in making sure that these are followed up, documented and ongoing support continued.
7. Describe your ideal franchisee
Someone who has great communication and interpersonal skills, ambitions and a plan to achieve them, loves outdoor work and is not afraid to work hard to realise the dream.
Someone who is really passionate, sells millions of dollars of product per annum and is a problem-solver. We have many ideal franchisees — people who love what they do, earn a good income and provide support to the system and to new franchisees.
Our ideal franchisee is someone who is motivated to achieve success, able to follow a system yet happy to contribute ideas of ways to improve. The franchisee will also have excellent customer service skills, including communication skills, a well presented image, be customer focused and one who enjoys being part of a team.
8. If you offer an income guarantee what sense of security does this provide the franchisee?
We no longer offers an income guarantee as many years ago we presented it to potential purchasers but all of them preferred to pay less for the business and not have the guaranteed income. It was really about responding to the feedback from our franchisees.
As a prospective franchisee has often only ever been employed before, starting their own business is a scary venture for them. This is why V.I.P. has offered an income guarantee of up to $6500 per month (conditions apply).
We are confident that we are able to help prospects who meet the V.I.P. franchisee requirements achieve a guaranteed income. This takes the stress out of having to worry about if they will receive enough work to support themselves and their family after joining V.I.P.