The Market

last updated 12/09/2019


Franchise Awards 1996 - Full Results

last updated 12/09/2019


November 1996 - Winners at the 1996 FANZ Franchise Awards all had something in common - they’re never satisfied. We look at New Zealand’s top franchise systems and franchisees

Fastway Couriers, the Hawkes Bay based franchise courier system, scooped the pool at the 1996 Franchise Awards. After winning the Service Franchise of the Year title for systems with a turnover greater than $2.5 million, Fastway went on to take the supreme title: New Zealand Franchise System of the Year.

In accepting the Award, Fastway Director Ernie Williams said: ‘This Award is recognition of the hard work put in by all of our courier franchisees and master franchisees, as well as the support team at our Napier office.’

The win by the New Zealand arm of Fastway follows success in the Australian awards earlier this year, when the company was highly commended in its category. Fastway expanded to Australia in 1993, and has made major inroads into the market there.

Fastway founder Bill McGowan said that franchising has been the key to the company’s success. The company began in Napier with two vans in 1983, and mushroomed with the development of its courier franchise which, Bill said, not only gave couriers the incentive to make the most of their investment but allowed rapid growth for the company as a whole.

Just 12 years later, Fastway operates from 42 locations across Australasia with over 750 courier franchisees. Over 1000 people earn a living from the Fastway group, which now has a turnover exceeding $60 million.

Enormous boost

Almost 150 people attended the Awards ceremony, which was held at a cocktail evening at the Sheraton Hotel and Towers, Auckland on 9 November.

The New Zealand Franchise Awards were established last year by the Franchise Association of New Zealand to promote the development of quality franchise systems. Separate awards were made for the Franchisee of the Year titles (see below). The Awards were sponsored by Westpac, Franchise New Zealand magazine,  Sheraton Hotel and Towers, Auckland, and Empire Events, who organised the event for the FANZ.

‘Last year, the inaugural Awards gave an enormous boost to franchising in this country,’ said David McCulloch, Chairman of the FANZ. ‘People really started to sit up and take notice, and those companies which won titles found them of enormous benefit in promoting their systems.

‘But the Awards are about much more than just publicity. Our aim in establishing them was to set standards of excellence which could become the benchmarks of best practice in franchising. Those who won titles will enjoy media coverage and public recognition, but in reality everyone who entered was a winner. The very process of entering required companies to scrutinise their systems and operations, and although only they will know how much they learned from that process, I am sure that each one will have emerged from it a little bit better, a little bit more competitive than before.’

All aspects

Entry was open to all franchises currently operating in New Zealand, who were required to answer questions on all aspects of their business. This included such areas as company philosophy and vision, performance, business direction, franchisee selection and support, quality and service programmes, and so on.

The three judges were selected from outside the franchise sector for their broad knowledge of business and quality procedures. They were Alan Marriott, Manager - Quality Development for Telecom Business Systems; Doris Robinson, Director of Quantum Learning, and Leith Oliver, Senior Lecturer at UNITEC and a business mentor to many companies.

Each judge spent around 120 hours reading and evaluating all the entries. Their brief was to recognise overall quality rather than to nominate the best entry in each category. This meant that no awards were made in some categories, and that an additional award was made in one.

‘We feel this approach is more in keeping with our overall aim of promoting best practice,’ said David McCulloch. ‘It ensures that if you win an Award, it really means something.’

The judges commented that they had found overwhelming evidence that the franchise business format can achieve spectacular results, develop robust businesses and provide significant competitive advantage.

Inspired

‘We were each inspired by some of the information presented,’ commented Alan Marriott. ‘There were tales of dramatic turnarounds and overcoming personal crisis, tales of high levels of innovation, of commitment, hard work and impressive growth. All of these stories were consistently underpinned by the concept of the franchise ‘family’ which provides mutual support.

‘We felt there were two key areas which stood out this year. The first was the need for continuous improvement strategies - the need to challenge current thinking, seek breakthrough opportunities and then support these changes with incremental improvements.

‘Secondly is the need to develop a clearer understanding of what customer satisfaction really means in your franchise business. How do you effectively capture the heart of the customer and provide the levels of excellence which are increasingly being expected?

‘The Award winners have demonstrated their abilities in both of these areas, and more. We feel they are excellent role models for others to observe, learn from - and challenge next year.’

Fastway Couriers

Service Franchise System of the Year

Turnover above $2.5 million - NZ Origin

1996 Franchise System of the Year

Bruce Speers, general manager of Fastway New Zealand, expects unlimited value from winning the top Award. ‘We’ve been in the papers, on the radio, customers have been sending congratulatory faxes - everything. The fact that the Franchisee of the Year also comes from Hawkes Bay is a nice boost for the region, too - it proves we make fine franchises as well as fine wines in this part of the country.’

Bruce believes that the emphasis which Fastway places on communication and participation within the franchise was a significant factor in their winning the top Award.

‘These are areas where we are constantly striving for improvement,’ he says. ‘Over the last two years we’ve been working on upgrading our manuals and documentation, and now we’re seeing the benefits.

‘We’ve always sought the participation of our franchisees. We had a franchise advisory council five years ago before anybody had heard of the term, and in fact now we have two levels - one consisting of courier franchisees in each territory, and another of master franchisees. They identify any areas of concern, and share new ideas for products, uniforms or whatever. The councils are a vital - and very effective - communication tool.

‘One of the strongest features of the operation is our ‘line haul’ system - the system by which we get the parcels around between the major centres. It was developed by the franchise advisory council in 1993, and they really control it.

‘And we go on looking for areas of improvement. At our twice-yearly conferences, we encourage franchisees to bring up topics for discussion and even to suggest policy changes. They can have a lot of impact on how the franchise develops - and that keeps us from ever getting complacent.’

Bruce believes that the Awards will have a significant impact throughout the franchise. ‘It’s a great morale booster for everyone. No doubt it will have an impact on recruitment, too - we’re still expanding. We have some courier franchises available in Auckland and throughout the country, and we’re also looking for a master for Wellington. You won’t get a better endorsement than the Franchise System of the Year title!’

Crewcut Property Maintenance

Service Franchise System of the Year

Turnover up to $2.5 million - NZ Origin                   

Crewcut Property Maintenance were a first-time winner this year, but they have no intention of resting on their laurels. ‘Winning the Award is a validation of what we’ve done so far,’ says David de Serville, who founded the home services franchise with partner Simon Crozier back in 1990. David says he found just entering the Awards to be extremely valuable.

‘The questions we were asked were extremely pertinent ones, and gave us an objective framework in which to analyse our business. We found a few things we realised we should pay attention to, and I would recommend the process of entering as an annual ‘health check’ for any franchise.

David believes that winning a title adds to the credibility of the Crewcut system. ‘We have 90 tremendous franchisees, and a great staff team, but as a franchisor you’re always walking a fine line between quality and quantity. You need growth, but you also need time to develop the system and to find the right people. We’ve always weighted it in favour of quality, and that can be a marketing disadvantage.

‘We can’t say we’re the biggest, or the fastest-growing, or anything like that. But Crewcut is made up of very, very good people. Rather than buying market share, we’ve chosen to re-invest in developing the systems to back them up, and to help improve the skills of the people themselves. The market doesn’t hear that very often.

‘What we can say now is that the quality of our franchise system has been recognised with this Award.’

Green Acres Home Services

Service Franchise System of the Year

Turnover above $2.5 million - NZ Origin                  

Merit Award                                                  

Green Acres won their category in the 1995 Awards, and they are delighted to have been recognised again this year. ‘Our people have worked really hard over the last twelve months, and they really deserve this,’ says Adrian Kenny, the company’s founder and managing director.

‘After five years of continuous growth, we realised that we needed to take a good look at ourselves and our systems,’ he says. ‘Things change, systems develop, and we needed to review everything we’d learned. Our aim was to improve the service we give our franchisees, and help them improve their service to their customers.’

The result was an in-depth analysis of everything from uniforms to manuals. ‘Our new outdoor uniforms are made of a UV-resistant material which protects the wearer. Developing those seemed to be a major project in itself, but it paled into insignificance beside the manuals.’ Green Acres employed specialist consultants to evaluate and re-present their manuals, and found them invaluable. ‘It was important to step outside and take a fresh look at ourselves - it’s easy to get stale. We re-visited everything. It didn’t change the way we do business, but it brought everyone up to speed with all the lessons we’d learned, and helped us achieve higher standards throughout the franchise.’

The process hasn’t stopped now. ‘We’re developing a new computer system which will enable our area managers to improve their efficiency and service to each franchisee. It’s been a long haul, but it will be fully operational in Auckland after Christmas, and we’ll have it right throughout the country in the next twelve months.’

‘For us, winning a second Award means we’re on the right track - but we can’t afford to stand still and admire it.’

Wendy’s Supa Sundaes

Retail Franchise System of the Year

Turnover up to $7.5 million - International Origin

Last year, Peter Gribble commented that entering the Awards ‘seemed like a lot of work’. Still, the managing director of Wendy’s Supa Sundaes took the time to prepare an entry, and took away the 1995 Retail Franchise System of the Year title in their category. This year, Wendy’s have repeated that feat.

‘It’s still a lot of hard work,’ Peter says, ‘ but I think every franchisor should do it. After last year we recognised a number of areas which we felt we could improve upon, and we’ve taken steps to do that.

‘For example, we’ve instituted a formalised review process. The retail manager and I meet with each franchisee on an individual basis. We do it off the premises so there are no distractions, and we follow a set format which is basically a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. The franchisees enjoy it, and it’s certainly proving very effective.

‘We’ve also upgraded our image, and brought more stores up to date.’

One of the Wendy’s Supa Sundaes franchisees, Robyn Hulena, also won a Franchisee of the Year title last year. Robyn capitalised on her investment earlier this year to take on a new challenge, and it says much for the strength of the Wendy’s Supa Sundaes system and training that the new franchisee has been able to take over where she left off.

‘Of course, without the franchisees we wouldn’t have anything,’ says Peter Gribble. ‘They are the ones that keep the franchise going - and they’re the ones who keep us winning Awards.’

Stirling Sports

Retail Franchise System of the Year

Turnover above $7.5 million - NZ Origin                  

‘Always be prepared to change.’ So says Colin Taylor who, as founder of Stirling Sports, has seen more changes than most in almost 14 years as a franchisor. Stirling Sports were winners of the inaugural Franchise System of the Year title, but like all the other winners they’ve been making changes too.

‘In a franchise, operating systems are always in a state of flux. If you have people in a contracted relationship like a franchise, there’s a risk of getting set in your ways and becoming uncompetitive. It doesn’t pay to be complacent. Making sure you listen to your franchisees is a good way of avoiding that.’

Accordingly, Stirling Sports has been making changes to improve communication still further. ‘We’re placing more emphasis on regional meetings rather than a national conference now. The national conferences were getting to be 60 or 70 strong, and some people are reluctant to speak up in such a large group. The regional meetings are 7-10 owners and their spouses. They’re from the same area and they know each other well, so they’re not as reluctant to come forward.

‘As a result, we’re reducing the length of our national conference by a day. That will save a lot of money we can put into other forms of support.’

Stirling Sports operates a very democratic system, with franchise owners having a vote on many issues. ‘The problem with a democracy is that it can be a very slow way of making a decision, and that contradicts the need to move and change easily. Accordingly, we have a 70% majority on marketing issues - if 70% of franchisees want something, the other 30% have to abide by it. It works well for us.’

Colin is a big fan of the Franchise Awards, and not just because Stirling Sports have done well.

‘Franchising is a great way of doing business, but if you want to succeed in the long term you have to do it properly. The Awards are a focus for encouraging high standards in franchising, and if we take the trouble to learn from each other we will be all the stronger for it.

‘I would like to thank all the sponsors who got behind the Awards to make them happen - without them, none of this would have been possible. I’d also like to acknowledge Kathy Cunningham of Empire Events who organised it all and arranged such a marvellous evening at the Sheraton. Her expertise brought polish and professionalism to the occasion, and I look forward to seeing what surprises she’s got up her sleeve for next year.’

And as David McCulloch says, ‘If you want to win next year - start thinking now!

Franchisees of the Year

A triumphant shout shook the ballroom at the Sheraton Hotel and Towers. Pleasure or surprise? It was hard to tell.

Minutes before, Tracey Houston had received the title of Service Franchisee of the Year - North Island, and had made a short but poignant speech in which she acknowledged the influence of her father, who died earlier this year. The moment had revealed one of the personal stories which lie behind franchising, and had moved everyone in the large audience.

Now she was receiving the supreme title of 1996 New Zealand Franchisee of the Year, and the same audience yelled its approval.

The story of Tracey Houston - and of the evening’s other franchisee winner, Malcolm Smith - illustrates the fact that franchising is a very individual thing. For some people, franchises are hands-on operations. In others, the franchisees develop staff teams, and build skills. This year, our winners have shown that management skills are just as applicable to a single outlet as they are to a large corporation.

Pioneer

Tracey opened her Lollipop’s franchise in Hastings in August 1995. The ‘pay-for-play’ centre, which offers a variety of indoor activities for children, was only the third franchise in the New Plymouth-based chain.

In addition she’d never owned her own business before, she had two children aged three and four, and she had been separated for a year. It wasn’t the easiest of starts.

But she did have three major advantages. She had her management training in a major corporation. She had high energy levels and enthusiasm. And she had her upbringing in a household where ‘there was never any doubt that you could do anything you set your mind to.’

Like many others, Tracey Houston had set off on her big OE in the 1980’s. She got as far as Sydney, where she landed a job as human resource manager for Citibank. Then they posted her overseas. ‘Whoopee, I thought. London, Hong Kong, New York, here I come! They sent me to Auckland,’ she recalls.

After a period with Citibank here, she left to start a family. ‘I had two children 11 months apart - I don’t do anything slowly.’ It was about this time that her father was diagnosed as having cancer, and Tracey decided to move back to Napier to spend time with him.

‘After a short stint at the Port of Napier, I was reaching the conclusion that what I needed was to spend more time in my children’s world, rather than in the corporate world. Then a magazine landed on my desk with an article on Lollipop’s.

‘I’d been in a pay-for-play place in Auckland, and thought what a neat idea it was. So I rang Alan Grant, the franchisor, on Wednesday and on the Saturday I flew to New Plymouth to see his set-up for myself.’ Lollipop’s Hawkes Bay was the result.

Supercharged

Tracey was certain that the business was for her. ‘My father had given me confidence in myself - not hyping me up, but always gently encouraging. I knew what I wanted to do, and I was doing it. Hawkes Bay was a bit of a gamble as we didn’t know if the population was big enough to support this particular business, but I had $300,000 to set the place up so I went shopping! I spent my last savings on toys, and it was wonderful. I’d come into the place while we were still building it and rip the boxes open, drive pedal cars around the building site. I was sliding down the play structure before it was nailed down. The workmen thought I’d gone troppo - but they finished the job in time, and we had a lot of fun. I needed to be the supercharger to create the energy in everyone else.’

It would be fair to say that Tracey’s management style was unusual, but there was method in her madness. ‘I was very fortunate in coming from a large corporation with lots of up-to-date management processes, and now I had my own organisation I had a strong vision of what I wanted to achieve. My goals weren’t about numbers - they were about creating an organisation where people cared passionately about what they did.

‘My dad was my inspiration. He’d been self-employed, taken the risks, and he had really good business skills. Dad thought Lollipop’s was outrageous but he was in there, boots and all. He might have been on chemotherapy but he was painting the pickets for opening day. He became my mentor, never giving me the answers but leading me to finding them for myself.

‘There are so many tools available to people to use, but you need the confidence to do things differently. If you do the same as everyone else, you’ll get the same results as everyone else.’

Sharing

‘What I had learned in my previous career is that people aren’t motivated by money - they’re motivated by recognition and true involvement. So that’s what we do - everyone shares the rewards, the risks and the occasional failure. If you give people bits of responsibility, then let them realise they won’t get hammered for errors, you build up a positive attitude to new challenges.

‘I believe people enjoy growing. If someone suggested that we might add a new menu item at the cafe - say, chicken nuggets - then I would ask for volunteers to check it out. One of the team would find where to get them, price them, test them out. They’d learn about sourcing and gross margins. It might take me longer to teach them than if I did it myself, but they learned a new skill. The more skills they have, the more I could be freed up to do other things.

‘I invested the first 4-5 months of operating in training people and instilling the ‘I can do that’ attitude in my staff. I knew I wanted to work on growing the business, not the day to day operations, so I had to have the people in place to let me do that. Eventually they would do their own rosters, manage their productivity, set their own salaries. I didn’t even have an office there any more - I’m based at home. My job was to get customers through the door - looking after the customers was their responsibility.

‘I think a lot of owner/operators struggle with that - they see the word ‘operator’ and think they have to be there all the time doing it themselves. I wanted to do it differently.

The deal

How could the staff set their own salaries?

‘I made a deal with everyone at the beginning,’ Tracey explains. ‘I told them that nobody knew how we would do, but that we were all responsible for the business. If it made a profit, 10% would go into a staff account and we would all decide jointly how to distribute it - and that’s what happened.

‘It’s important that it isn’t presented as an incentive - it’s a recognition of the part that everyone is playing in the business. We don’t have a chart on the wall saying “if we do x, you’ll get y”. Instead, at the end of the month after we’d all done our best we would say, “wow, look at how much we’ve achieved.”

According to Tracey, the hardest thing in running a business is getting staff to care about your customers as much as you do. ‘For example, it’s hard to explain what an indifferent attitude is until you’ve been on the receiving end.’ She took a typically novel approach to instilling this in her team.

‘We went on spying trips. Over three weekends, I took all the staff off to every pay-for-play place in Auckland. We borrowed some children and became customers. We wanted food, we spilled our drinks, we even had a birthday party in one place. When we were well-treated, we enjoyed it. When we weren’t, we remembered. There’s nothing like being a customer to understand how a customer feels! We all learned so much - there was a tangible change when we came home.’

Hard decisions

Tracey Houston won the Award for her marketing and operational excellence, but she has also proved herself capable of making the hard business decisions. In November she sat down with her franchisor to review progress in her business, and came to a startling conclusion. She is going to re-locate the franchise.

‘Over the last year or so we have achieved an enormous amount. We’ve built up a tremendous relationship with our customers. I don’t think there’s a kid in Hawkes Bay who hasn’t heard of us, and some of them even write letters to Lollipop (the logo cat) telling him what they’ve done on their holidays.

‘But although we have excellent penetration of the market, the truth is that Hastings just isn’t big enough to give me the sort of returns I need. No matter how good you are, if the population isn’t there you can only do so much. In the beginning we didn’t know what that population needed to be.

‘I’m a great believer in the Lollipop’s concept and what we’ve learned here has given me confidence that we’re doing a lot of things right. So now we’re going to take on a bigger area.’

In addition to relocating, Tracey also plans to use her tremendous expertise to help the overall franchise grow. ‘Lollipop’s is expanding into Australia, and Alan Grant has asked me to help with some more innovations and system development work. He is an exceedingly supportive franchisor and a joy to work with, so I’m looking forward to that.’

‘Moving out of Hawkes Bay is very sad, but it’s one step backwards for two steps forward. There’s no point in staying in a market just for presence. I’ve already proved that it is possible to own a franchise and have enough free time to do other things - now I want to do those and achieve the higher financial returns that operating in a larger population area will bring.’

Tracey isn’t yet saying where her new franchise will be, but one thing seems certain - it will again be driven by her inspirational management philosophies and enormous energy.

Rest cure

Not many people buy a franchise as a rest cure, but that’s what Malcolm Smith did - and he ended up with the title of Retail Franchisee of the Year - North Island.

A hotel manager, he had just started a new contract in Fiji when a back injury sent him home in a wheelchair. After a vital operation he was told not to do anything too strenuous for a year, but he had not reckoned on his father-in-law, Errol Officer. Errol is a partner in the Long John Silver fish and chip franchise, and he had a proposition for Malcolm.

‘They had this company-owned store in Lynn Mall which just wasn’t singing. The potential was there, but not the figures. Errol thought I could do something with it, so he offered to sell it to me. He must have been pretty convincing, because I bought it,’ Malcolm laughs.

He then went to observe his new purchase.

‘I knew nothing about malls and traffic counts and that sort of thing, but I could see they were missing business. The way people were being served lacked speed, enthusiasm. It wasn’t friendly or genuine. I knew I could do something with it.’

People

Malcolm worked away at his new business. He found the basic system and products were very good, and with a little fine-tuning could be excellent in that location. It was his people skills which were to be vital, however.

‘The first thing was to secure the support of the Mall employees. There are 700 people work there every day, and they obviously represented a major potential market for us, so we started offering discounts, give-aways and so on. I set out to build some personality around the store, too. I’d be in there early and greet everyone who passed by. I got some very funny looks, but after two weeks people were expecting it and calling out good morning back. It sounds basic, but it worked. I was there with the coffee on, wanting to serve them. It created an atmosphere.

‘Another thing was training staff to accentuate the positive. We cook our snapper to order, so it’s always at its best. That means a delay, so when people were ordering snapper they were told “There’s a two-minute wait for that”. I taught them to put it differently - “I’m going to cook that fish for you fresh - it’ll be ready in two minutes”. Again, it’s basic - but it worked.

The results were impressive. Weekly turnover almost doubled; the store went from eighth position in the Long John Silver league table to second, and the store’s name appeared among the top ten performers in Lynn Mall. It’s been there ever since.

Good habits

Profit increased in huge steps, and staff turnover reduced dramatically. ‘Most of the original crew left when I took over, and that turned out to be an advantage - the new team came in with no preconceptions, and were able to learn good habits from the start. In the last six months, we’ve only had three staff members leave, which is an incredibly low figure in the fast food business.’

‘That’s partly the result of our customer focus. If anyone has a complaint, we do everything we can to make them happy. We’ll search them out in the food court to ensure they did enjoy their meal and invite them back. Because the staff are happier, the customers are happier - and vice versa. It’s got to the point where if anyone gives the staff a difficult time other customers will protect them and point out how hard they work.’

Malcolm is now very happy with his team. ‘They’re a special bunch of people who really know how to work together. When they need to, they’ll lift their game without being asked.’

Having achieved such an impressive turnaround at Lynn Mall, Malcolm’s ‘rest cure’ isn’t over yet. He has now been tempted into a new challenge - taking on an Area Manager’s role for Long John Silver. He now has responsibility for seven stores from Warkworth to Wellington, and he’s finding his experience useful. ‘If I suggest something to a franchisee, it’s not because I’ve read about it - it’s because I’ve tried it and it worked for me,’ he says. ‘People do tend to listen when you’ve been there yourself.’

One of the stores in his area is his own. ‘That’s quite fun - the team I’ve put in place are now managing the store for me, expanding on what I’ve done. I’ve had to walk away a bit, and they’re doing great. If I weren’t doing this job, I’d probably be able to work just two days a week!’

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