Although the surveys show that franchise growth is finally starting to pick up in New Zealand, several franchises have consistently defied the trends of the past few years and grown even in the hard times. Who are they and what are the seven secrets they share?


Health and beauty is the industry to be in at the moment, as evidenced by Laser Clinics Australia’s leap to the top of the BRW Fast Franchise rankings for 2013, closely followed by Jetts Fitness and Anytime Fitness – both of which have also been booming in New Zealand – in the number two and three spots. We understand that New Zealand’s own Caci Clinics is poised for further growth this year.


On the back of the phenomenal success of Chipotle in the United States, fast-casual Mexican restaurants are hot in Australia with no less than three entries in the Fast Franchise Top 10 – Zambrero at #5, Mad Mex Fresh Mexican Grill at #6 and Salsas Fresh Mex Grill at #10. With the unfortunate demise of the Original California Burrito Company due to a family feud, home-grown Mexicali Fresh has started to expand aggressively in New Zealand.
 
Mexican may be flavour of the month, but the fast casual restaurant model has also found its way into more “traditional” areas – gourmet burgers and coffee shops – with the result that at least two New Zealand exponents of the model have enjoyed strong growth.

Fuelled by funding from an IPO and this year, by an investment by none other than Subway founder Fred Deluca’s Franchise Brands, Burgerfuel bucked conventional wisdom by making the mighty leap almost to the other side of the world with stores in the United Arab Emirates, Dubai and Saudi Arabia as well as ambitious plans in the volatile Egyptian and Libyan markets, before finally jumping the ditch to the South Island with its first store in Christchurch.

One of our fastest growing café and restaurant franchises, The Coffee Club has nearly 50 stores across the country and seems to be the place to meet these days. In fact, I have a meeting at the Takapuna store this afternoon.

So why have these and other franchises grown while others have stagnated post-2008? Here are seven secrets we’ve discovered from our own experience as well as studying the secrets of the fast and furious.

1. Get your franchisees on board

Would you buy a franchise without talking to at least one existing franchisee first? We didn’t think so. We’ve always maintained that your franchisees can be your best salespeople, but they can also stop your franchise recruitment drive in its tracks with an ill-considered comment. We’re not recommending for a moment that you point prospects only to tame franchisees or coach franchisees, but do make sure they’re aware of your growth plans and the benefits of a bigger network for them personally – benefits such as greater brand awareness, group buying power, economies of scale and franchise resale values.
 
2. Recruitment website

We’ve written fairly extensively on the new way that people buy franchises – gathering as much information as they can online before even approaching the franchises they’re interested in – and it was great to see that one of our picks won the 2013 Franchise Update STAR Award for best franchise recruitment website, a website which generates franchise leads at an average of 5.4%, way above the industry norm. Well done, VooDoo BBQ. See below for links to our earlier articles.

3. Win an award

Having franchise awards under your belt is no guarantee of franchise recruitment success if you haven’t got the other elements of your strategy right, but if you have, it adds real credibility to your offer. This has certainly been true in the case of Columbus Coffee and The Coffee Club, which have won a clutch of awards in recent years.

4. Mix up your marketing

As you know, marketing is a complex discipline and no marketing campaign is an island. Make sure your franchise recruitment strategy ties in with your consumer marketing strategy so they feed off each other and maximise audience and brand awareness.
 
5. Hire a recruitment specialist  

We were at a franchise conference last week where the franchisor claimed to be “the world’s worst salesman” because of his failure to sell any franchises over the past year. But wait a minute – what else was he doing? Managing his existing franchise. When did he find time for franchise recruitment? In between all his other responsibilities. In his case, franchise recruitment wasn’t a failure, it was an impossibility! Recruitment is a full-on, time-consuming task which demands focus, commitment and perseverance. We recommended that he take on a recruitment specialist or engage the services of The Franchise Store, a newly formed licensed agency specialising only in franchise recruitment. This franchisor did the latter, and we look forward to a new growth phase in the coming financial year.
 
6. Go where other franchises fear to tread

New Zealand’s a small place and if you want to achieve real growth and scale, you need to venture offshore, but we’ve found many home-grown franchises fear they haven’t got what it takes to make it in larger foreign markets. Not so Laser Group, which expanded into Australia the right way, using Australian master franchisees backed by Kiwi expertise and experience, and Burgerfuel, which used a similar strategy to penetrate the Middle Eastern market and has teamed up with an offshoot of the world’s largest franchise, Subway, for its foray into the massive US market.

7. Be part of a growth industry

It’s no coincidence that the many of the fastest growing franchises are in fast growing industries such as health, beauty and fast casual dining. However, it’s still vital to have a differentiated business model, especially as the competition in these industries grows, which it invariably will.


Next steps to kickstarting your network growth:

  1. Get us to review and redesign your franchise recruitment website and marketing strategy
  2. Ask us to help you prepare your entry in the next franchise and/or industry awards round
  3. Watch this space for details of the launch of The Franchise Store, New Zealand's first specialist franchise broker
  4. Talk to us about your offshore expansion plans
  5. Take a look at our articles on franchise recruitment

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