Getting the best of both worlds
Mike Padden is a consultant with the group Franchise Systems and yet, like his consulting partner Bram Baker, has found the time, commitment and enthusiasm to invest in one of the franchise systems that he came across professionally — as a franchisee.
Just Better Care was founded by Trish Noakes to provide home-based services for the elderly and infirm, allowing them to access care and assistance so they are able to remain in their own home.
Padden takes up the tale. "We put the franchise system together with Trish Noakes and it was clear she took time to get it right, had good skills, knew the industry and had plans for the future. We could see this was going to grow.
"My wife Vera Randall was interested in the sector because she believes that older Australians deserve to be valued and have the right to choose between staying in heir own homes receiving support or moving on to a residential care facility.
"As consultants we were instrumental in creating the initial structure and we assisted the franchisor in their advertising for franchisees, and were pleasantly surprised with the quality of people enquiring."
In the present environment of limited access to capital, the high cost of inventory and rentals, a non-retail business was appealing, he says, as was the prospect of giving employment to many staff (about 90 plus office staff) in each franchise and providing satisfaction for all concerned.
Before long Vera, who had founded the Knitwit sewing franchise 30 years ago, had taken on a role in the head office operations of the franchise system and the couple decided to buy a franchise in Sydney’s Northern Suburbs.
"We've become enmeshed in this system, which has grown to 18 franchises in three years; Vera is now Just Better Care's full time franchise manager, so we have had to put up a wall between what she does as a member of the franchise support team, me as a franchisee, and my consultancy role."
The franchise is not just an investment, he insists. "We are close to the franchise, we have weekly meetings with staff, monitor compliance and are vigilant with financial management. As well I talk to key clients, the major not-for-profit organisations in particular to ensure ongoing relationships are strong."
For Bram Baker business has always been top of mind, from Lego toys to Just Better Care via banking. "When starting a business the owners are generally flat out trying to get it right. This is the beauty of franchising, someone has already done this for you," he indicates.
"I was a franchisee for The Cheesecake Shop, told them what needed to be done to fix it – they asked me to fix it, then to take on marketing and operations, then the role of general manager."
Since then Baker has spent more than 10 years as a franchise consultant. And in the years of putting franchises together, he had the advantage of viewing systems, procedures and opportunities close-up. When Just Better Care came into the arena, he liked what he saw and wanted to open on the Gold Coast.
"I felt able to see myself in it; my wife, son and daughter are all in community health. As a franchisee second time around I enjoy the cut and thrust of challenging the franchisor, fixing and developing and improving, as franchise systems don't sit still.
"Franchisees put in a lot of money and are conscious of protecting their investment. If the franchisor is not getting it right, they get critical.
"Most move forward but as a consultant you see people who don't touch their franchise systems for two to three years. It's important to keep pushing, continually improving," he says. "It sharpens my mind to see where a system can be improved, and I can give constructive feedback."
But what about other franchisees? How does Padden think they feel about the dual role he and Baker hold within the franchise system?
"At conferences Bram and I do become involved. We try to moderate our views because we see things from the franchisor angle and also see what franchisees equire and their desire sometimes for initiatives the franchisor can't put into operation."
But Padden reiterates that more than one franchise system houses dual role franchisees. "That happens in many systems – Bakers Delight is just one, where franchisees move into franchise management. It's probably very beneficial to have an in-depth knowledge," he suggests. Coming to the business with consulting experience, he says, allows for an understanding of the needs and desires of both the franchisee and the franchisor.
"We have followed the system and been successful; it's profitable and works.
"It is a great system and the franchisor certainly has the well being of the group at heart. As the business system has grown the franchisor has spent hundreds of thousands of dollars on a new and comprehensive IT platform and field support staff. It's still hard work to break even but after that it's highly profitable. We're into our fourth year of a five plus five agreement."
Padden admits there have been compromises despite the business' success; Northern Suburbs won the Outstanding Achievement award for franchisee performance, and the Gold Coast franchise was named Franchise of the Year for the second year, in the 2010 Just Better Care annual conference.
"A good franchise is where the franchisee works full time in the business and is 100 percent committed. Both would have worked better if we'd been there 100 percent of the time."
Baker says he couldn't juggle his franchisee role with providing advice for his franchisor clients without the right staff. "The first two years I concentrated on the business, now I'm able to step back a bit," he reveals.
"Mike's a strategist, I'm an operations man – I like to get my hands dirty."
Padden came into franchise consultancy from a system with more than 200 outlets. "I've seen franchising from the good, the bad and the ugly. I've seen legislation change, and attitudes to franchising alter. At times we've worked in a number of systems in the same area and the franchisors have had sufficient trust to know we have done our best for each of them."
Baker believes that one aspect of being both franchisee and franchise consultant puts the pair in good stead.
"We practice what we preach. Some people don’t understand systems — we do."