International franchise leaders speak about how they have navigated franchising Down Under.
It is often said that franchising in Australia is one of the toughest markets to crack. It’s also known as one of the most regulated sectors and is governed by some of the strictest laws in the world. On the other hand, the New Zealand franchising landscape tends to be more lenient, with easier barriers to entry. It’s no wonder, then, that most Australian franchise brands make New Zealand their first port of entry when international expansion is on the cards.
Together, both countries make for attractive expansion destinations due to the customer demand, growing populations, short-haul flying times, close proximity, and timezones.
“It is often said that franchising in Australia is one of the toughest markets to crack”
The Australasian franchise scene, as it’s known, is well on its way to recovery after the global pandemic interrupted business as usual throughout last year. Both countries have been afforded the luxury of opening back up and getting to a relatively COVID-normal daily routine in the early stages of 2021. The Trans-Tasman travel bubble has also reintroduced commercial flights between the two countries, which has been encouraging for the franchise sector and widely felt by the spike in tourism increased business opportunities and helped both economies to creep out of the dark hole that they were thrown into. But the dark days seem to be over.
Australasia has seen positive growth in the first half of the year and multiple franchise brands have continued to market their relevant franchise opportunities in both regions, with many reaping the rewards, seeing success through increased lead generation statistics, larger sales funnels, franchise grants, and major development deals.
1. MIKE GEDDES
Franchise development manager, Poolwerx
“Small business is strong in both countries and the franchising model supports this”
HB: When did you start franchising in Australia and New Zealand?
MG: In 1992 we commenced franchising in Australia and decided to enter the New Zealand franchise market in 2005.
HB: Why did you focus on these countries?
MG: Poolwerx saw an opportunity to bring a professional structured approach to a very unorganized market that was growing rapidly.
HB: What franchising strategy are you using to grow in Australia and New Zealand?
MG: We’re providing retail and mobile home services with highly trained staff and quality products to the swimming pool and spa aftermarket. We also have a very strategic franchise marketing plan that focuses on digital activities and advertising to generate quality franchise leads.
HB: How do you ensure Australasian franchisees thrive?
MG: The Poolwerx head office team provides support, marketing, training, systems, IT and a strong ratio of support groups to drive success against set KPIs for franchisees.
HB: What are the challenges of franchising in Australasia?
MG: Australia and New Zealand love franchising – in fact, New Zealand has the highest number of franchises per capita in the world – small business is strong in both countries and the franchising model supports this.
HB: What are your franchise growth goals for Australasia?
MG: We hope to have 400 franchise territories sold at maturity, within the next 10 years.
HB: What has your brand achieved in Australia and New Zealand so far?
MG: We currently have 280 franchise owners in Australia and eight franchise owners in New Zealand, as well as a newly signed master franchise appointed in New Zealand.
2. MARK BHARDWAJ
Head of partnership growth, Australia & New Zealand, IWG
“We need to spread positive awareness about franchising and help people to understand the key benefits of franchising”
HB: When did IWG start franchising in Australia and New Zealand? Why did you focus on these countries?
MB: IWG entered Australia and New Zealand in 2019, as part of our global strategy into franchising. Our goal was to grow the flexible workspace footprint in suburban, regional and rural areas.
HB: What franchising strategy are you using to grow in Australia and New Zealand?
MB: Our focus is on the commercial property market, which includes listed and non-listed property funds, private equity, property owners, developers and investors. In addition, we are also targeting the franchise audience – specifically people who understand the flexible workspace industry and its future given the current environment. Our goal is to partner with investors who are open to a multi-site strategy to grow their franchising footprint within a territory, through the various brands in the IWG portfolio, which includes HQ, Regus, and Spaces & Signature.
HB: Why is now a good time to franchise with IWG?
MB: More people are working from home or close to home. We believe most companies are embracing flexible coworking and providing their employees with flexible work options, hence why our focus is on the suburban, regional and rural areas of Australasia. Franchising is a popular business model in both countries.
HB: What are the challenges of franchising your business in Australasia?
MB: As an industry, we need to spread positive awareness about franchising and help people to understand the key benefits of franchising.
HB: What are your franchise growth goals for Australasia?
MB: We believe we can achieve 100-plus locations in the Australian market and an additional 20-plus sites in the New Zealand market.
HB: How has your brand found the Australasian market so far?
MB: We signed our first franchise deal in July 2020 in Australia and are in advanced discussions with a number of potential investors for both Australia and New Zealand.
HB: Any other exciting franchising news?
MB: IWG is about to launch a brand new product offering that is retail-focused, designed for mixed-use locations in suburban and rural markets – it’s an exceptional retail concept that will add value to new franchise partners.
3. BRET STREMSKI
Director, Lollipop’s
“Ensure your business model is focused on early franchisee profitability”
HB: What franchising strategy is your brand utilizing to grow in Australia and New Zealand?
BS: We’re currently using an expert franchise marketing agency to promote and market our franchise opportunities in both Australia and New Zealand. Their lead generation campaign provides Lollipop’s with key visibility on multiple franchise platforms and key industry publications.
HB: What excites you about franchising in these regions?
BS: Australia is known for hundreds of successful franchise brands, including Boost Juice and F45 Training. Many Australian franchise brands venture into other countries, especially New Zealand, as it’s an easier transition in terms of language, time zones, and suppliers.
HB: What has led to Lollipop’s plans to grow in New Zealand?
BS: We have decided to relaunch our Lolliop’s brand in New Zealand based on the successful Australian business model that we have defined over the past few years.
HB: What are your franchise growth goals for New Zealand?
BS: We’re hoping to grant five-to-10 franchises across the country in all major cities, such as Auckland, Wellington, Queenstown and Christchurch.
HB: How has franchising in Australia been for your brand?
BS: We have more than 25 sites in Australia with several new locations under development.
HB: What words of wisdom do you have for international franchisors eyeing up the Australasia market?
BS: Ensure your business model is focused on early franchisee profitability.
4. SEAN FARRELL
Head of retail ANZ, Ben & Jerry’s
“ANZ culturally suits Ben & Jerry’s and our social and economic missions”
HB: When did Ben & Jerry’s start franchising in Australia and New Zealand? Why did you focus on these countries?
SF: We launched in 2010. ANZ culturally suits Ben & Jerry’s and our social and economic missions. Plus, the legal and financial expectations as well as the market maturity help to give us clarity on when working out our plans, partners, and systems.
HB: What franchising strategy are you using to grow in Australia and New Zealand?
SF: We have a plan for a limited number of stores in key city locations across ANZ that help to drive the brand and ensure our stores are successful. The synergy between B&J’s stores, our franchisees, and the brand is key – the stores are our best marketing vehicle to explain our history, our social mission and why it is important for us to be made of something more, like Fairtrade and B Corp. Our franchisees help to ensure that we are part of the local community and not just another global brand in ANZ. The brand marketing campaigns, which have a much bigger budget, drive awareness and engagement, which in turn brings footfall into our stores.
HB: Any tips on how best to franchise in these regions?
SF: Working with key partners on a launch strategy and partner selection was absolutely key. The franchising rules vary across AU and NZ, but we work to the highest standard and continuously review our practices to ensure that we are ahead of the curve. Franchising is very popular in Australia and New Zealand and the culture is aligned to everyone having a ‘fair go’. With clear rules and regulations, the franchise environment is also widely publicised, making sure that franchise businesses are ‘Code’-compliant.
HB: What are the challenges of franchising in Australasia?
SF: With some malpractice across various franchised industries, Australia has been forced into introducing complex laws to combat this. That said, with the right guidance and culture, most franchisors won’t have any issues.
HB: What are your franchise growth goals for Australasia?
SF: We have a plan for another 10-to-20 stores across ANZ, with most of these being franchised. While new store growth is part of our strategy, the key foundation is to ensure our current network is successful. Having navigated successfully through the pandemic without any store closures, we are working hard to kick on and be best placed when international tourism returns.
HB: How is the market currently responding to your brand?
SF: We have recently opened a new Ben & Jerry’s location in Wellington, on the popular Cuba Street and we are also currently preparing to open the doors to a brand new scoop shop in Newtown – this is an exciting new Sydney location for us! We have also confirmed three new locations in far north Queensland.
5. CLAYTON TRELOAR
CEO, Australia and New Zealand, Mail Boxes Etc.
HB: What franchising strategy are you using to grow in Australia and New Zealand?
CT: We are currently expanding our footprint through franchising in key areas of Australia and New Zealand. There are thousands of entrepreneurs in more than 40 countries around the world who have already set up their own businesses with MBE.
HB: What are the advantages of franchising in these regions?
CT: Franchising definitely has a place in Australia and New Zealand. Some of the biggest international brands have proven this with their market-entry strategy and the cost associated with diving into both countries have paid off.
HB: What has led to MBE’s plans to grow in New Zealand?
CT: We have seen some of our Australian stores operate for more than 25 years, so expanding to New Zealand was a no-brainer for us. We also have a very large global presence, so international expansion is always part of our strategy.
HB: What are your franchise growth goals for New Zealand?
CT: We plan to build our presence in New Zealand through a master franchise partnership. This will allow us to oversee the strategy and the team on the ground (across the ditch) will have the time and resources to develop the brand across key parts of New Zealand, from a growth and strategy perspective.
HB: How is your brand currently performing in Australia?
CT: We have engaged multiple lead generation strategies to find quality franchisees and have seen great success with over 40 stores now operating across the country. We have recently opened an all- female-owned MBE business in Brisbane.
HB: Any advice for incoming brands?
CT: Market entry into Australia and New Zealand should be slow and steady. Get everything ready before launching your market entry campaign.
THE AUTHOR
Holly Barnes is head of franchise marketing and lead generation at DC Strategy.
