How four franchisees built a successful cafe business [part one]
The hard work has paid off for Shingle Inn franchisees Nicki Nesbitt, Wiesiek Lewandowski and April and Tony Carnie – in October the Franchise Council of Australia (FCA) awarded them the prestigious 2014 Franchise of the Year (two or more staff) title.
Impressively, the four franchisees and friends, who head up a Shingle Inn cafe in Mt Ommaney, Queensland will celebrate five years in business in December.
Franchising: there's no need to reinvent the wheel
Nicki explains she and her business partners chose a franchise over an independent business for peace of mind. “The business model was proven and the Shingle Inn brand was known in the market.
“We also bought into a culture. We liked the idea of becoming a part of what was already firmly established as a family business, and that’s what we wanted our business to be too.”
April adds there are a number of time and cost saving benefits associated with the franchise model. “You don’t have to create a business from the ground up, or spend time reinventing the wheel.
“Supply agreements are negotiated for you on much better terms than you could get as an independent, plus you have access to amazing support and expertise that would be impossible to fund in a start-up business,” she adds –
The research process
“We always knew we wanted to be in business together so it was a matter of choosing exactly what we were going to do,” says Nicki, who came across the Shingle Inn brand after a flyer was dropped in her letterbox.
“Something about it caught my attention,” she adds.
The initial letterbox drop prompted the pair to find out more about the cafe business. “We spent a lot of time doing online research and we visited other Shingle Inn stores to get a feeling for the brand,” says April.
“I especially felt a strong pull towards the brand for its concentrated effort of gluten free products given that many of my family members are gluten intolerant,” explains Nicki.
A Shingle Inn business can vary in cost from around $300,000 to $450,000, so how did they achieve their franchise dream?
“We funded our investment via a secure business loan from a major bank,” recalls Nicki.
April explains the business proved successful from the start. “It took us 18 months to make a profit, however we drew wages from day one,” she says.
Due diligence tips
“Obviously we sought legal and accounting advice, but I would encourage potential franchisees to also trust their gut instinct,” says April.
She similarly stresses the importance of speaking with, and observing, existing franchisees. “Speak to a variety of franchisees within the network you’re considering, but also go and observe their businesses at different times.
“You’ll pick up a lot from that – what they’re like as an operator, if they’re all following the same system, what you like and don’t like about their brand and even as a novice, as we were in hospitality for example, you’ll be able to get a feel for what’s happening in the business.”
Overcoming the challenges
April explains their key challenge is around juggling personal and professional commitments. “There have been times when the business has been all-consuming and I think the greatest challenge for us, especially being so passionate, has been keeping a balance between work and home.”
She says the Red Day principles, which focus on how franchisees can spend more time working on their business rather than in it, have been particularly effective in this area.
“They have been hugely beneficial for us and we’ve done a lot of work over the years on training and developing our team so that the cafe can run without us being on site.”
They’ve also learned the importance of following the Shingle Inn system. “We’re happy to admit that we made mistakes in the early days by thinking we could do things better than the franchisor.
"We tell everyone about examples of those mistakes now because experience has told us that the proven Shingle Inn system works, you just need to follow it,” she says.
April adds following the system has enabled them to develop a healthy relationship with the franchisor.
“Shingle Inn operated eight company-owned stores before franchising as part of a second generation family hospitality business so that’s a lot of hands-on experience to tap into.
“They want our business to be successful and while it’s not their responsibility to make it that way – that’s our role – they will support us if we support them by following the proven business model.”
Continue on to Part Two: How four franchisees built a successful cafe business [part two]