The franchise sector within Australia has matured to the point whereby two thirds of franchise systems have now been in operation for 10 years or more according to Griffith University’s Franchising Australia 2014 Report. It’s therefore reasonable to assume that an established, successful franchise system has built a robust business that learns and evolves to deliver a sustainable business model for franchisees and be well positioned to counter various headwinds that impact on the ebb and flow of the economy, consumer sentiment and competitive forces.

Over the course of time, as an experienced franchise system, we’ve observed the many opportunities and challenges retail franchisees face each day. Fast paced technological change, global competition, time poor society, aging demographics, a multitude of customers options on where and how to spend their consumer dollar, knowledgeable and connected customers are just some of the the realities that business operators deal with. They do provide challenges however the same forces also provide significant opportunities for those experienced franchise systems best positioned to take advantage of these market changes. These factors also have a significant effect on how franchisees operate today. So what’s it really like to own a franchise and what should potential franchisees take note of when considering where to invest?

The Howards Storage World Mt Gravatt store has been owned and operated by Steve and Jenny Wilson for almost 15 years. In the early days, the brand was relatively unknown, however, excited by the opportunities in front of them they opened the first Queensland store in 2000. Now seasoned and successful franchisees, this couple has learned a thing or two…

There’s a significant amount of research and due diligence to undertake prior to purchasing a franchise; and that’s not just limited to number crunching. While glossy advertising and marketing material will wet the appetite of a potential franchisee, the romantic notion of owning a franchise can wear off if the day-to-day task at hand doesn’t meet your expectations. Steve reiterates, “You can sometimes get lost in the hype of it all but the reality of owning a business is getting out of bed every morning and going to work in that business. Anyone looking at buying a franchise business should seek out as many franchisees as they can to talk to but also see if you can work for a couple of days in the business. Go to work, unload the trucks, take the rubbish to the bin, talk with customers, assemble the trolleys and do all those things that you would be doing on a daily basis should you choose to make that financial commitment.” According to the Franchising Australia 2014 Report of the 1109 organisations surveyed, many detailed the importance for franchisees to assess general environmental conditions and system-specific factors so as to formulate realistic expectations of the future value of the business opportunity (2). Of course trading results are paramount to your decision to invest, however, for a franchisee/franchisor commercial relationship to work, it’s critical that your needs and expectations align with the business you’re investing into.

A prime reason people enter a well established national franchise network is to access a proven business model with a high profile brand and reputation amongst customers and the wider industry sector. Operating a business under an established and proven franchise model will ensure your franchise system keeps abreast of current marketing, technology and societal trends. As a franchisee you may have an interest in these areas, however, you may not be an expert. That’s where a Group Office comes to the fore with buying power and departments dedicated to the abovementioned. Steve explains, “These days in business you need to be part of an organisation. Steve’s Storage World doesn’t have much clout as Howards Storage World. It’s not only from a brand recognition perspective, it’s the benefits that flow on from having a head office that’s keeping up with technology. It’s a technological world these days and if a major franchisor keeps up with those then the benefits flow through to the individual franchisee.”

Whether you’re considering a service or retail franchise, having the prowess to provide exceptional customer service is key to running a successful franchise. Quality and good service equates to repeat customers and that starts and ends in-store. Steve explains, “Strong customer service and product knowledge is generally recognised as missing in the retail environment today, particularly in department stores, which seem to be purely driven on price. When a customer comes into a Howards store we provide what we know they don’t really get elsewhere; but you need to have really good staff and systems in place to be able to develop that level of service and product knowledge.”

Furthermore, while rewards programs, products and price are all part of the package, customers need to feel an affinity with the business ethics of any given store. Steve continues, “It’s all about being comfortable with the store atmosphere, staff interaction and being treated with courtesy and respect. At Howards we try to make people feel comfortable if they have to return a product. It’s important that we make them feel as though the business has a strong customer ethic and that customers don’t feel threatened or pressured; just comfortable in the store. I think you’ve got to feel happy within the store atmosphere, have good staff relationships, and on top of that the customer has got to be treated well.”

In any given business there are always a certain amount of challenges to face. From navigating staff and wages through to scheduling the amount of time you spend on the floor, there are many elements that need to fuse together in order to succeed in a franchise. For Steve, over his 15-year tenure in retail, the big challenge has become the hours of trade. He explains, “At the moment shops are open 7 days per week and on most public holidays and I think in the years ahead, opening hours will only increase; if you’ve been overseas to stores in the major cities you’ll find they’re generally open til 9pm. In a society that still thinks the working week is 9-5pm during the week, it’s a challenge to find the right staff in terms of quality and cost to the business. It’s fair to say that you don’t really buy a franchise so you can work 24hours a day/seven days a week; so you need staff that can work on Sunday afternoons and Boxing Day, for example, and at the same time provide the level of service and product knowledge required.”

Job satisfaction for a retail franchisee will come from their relationship with their franchisor as well as daily achievements in-store. While affirmative levels of franchisee satisfaction contribute to network growth and development, poor satisfaction levels have the potential to destroy value and place a franchise system on a slippery slope. Setting realistic expectations is critical. Steve explains, “On a day to day basis, I find it most satisfying when a customer comes in and they say they’ve been referred to us from another customer. If we’ve done a job or created a reason where someone has told their friend you’ve got to go into Howards Storage World; I find that pretty satisfying and that does happen a lot.” On the flip side, building and maintaining high levels of owner satisfaction within a franchise system boils down to four simple steps between franchisor and franchisee: open communication; disclosure in all major decisions; direct action to address issues; and mutual respect.