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ISSUE 62 EDITION 2 2020
The road to
recovery issue
FCA advocacy and
support during COVID-19
Preparing your business
for bounce back in the
‘new normal’
Workplace safety
and return to
work strategies
Commercial leasing
arrangements
Building resilience and
maintaining wellbeing
Franchise innovation
case studies
AUS $6.95 | NZ $7.95
9 772652 123000
ISSN 2652-1237
02
OFFICIAL JOURNAL OF THE FRANCHISE COUNCIL OF AUSTRALIA thefranchisereview | i
Control your delivery costs Contents
2 A message from the CEO
4 FCA delivering for members during COVID-19
Introducing Stellar, an online hospitality solution that offers 6 The impacts of COVID-19 on franchise businesses
8 Boom times ahead for franchising?
3rd party delivery, ordering food through Google, online ordering,
10 Preparing your franchise business to bounce back in
and order management, that works on any browser, and no need for Redcat POS. the wake of COVID-19
14 Poolwerx’ values are driving a dramatic reinvention
16 Five critical steps for managing change
18 Rolling out innovations for long-term success
4 20 Commercial leasing during COVID-19
22 Navigating leasing arrangements during COVID-19 and
How it works: beyond
24 Preparing your workplace for the ‘new normal’
26 Safely getting employees back to the workplace
28 Key areas of focus for franchises under COVID-19
30 COVID-19: the potential impacts of early release of super
32 Keeping up with rapid change at Shoebox Books
34 The psychology of resilience and why it matters
38 Short-term solutions support long-term goals at RAMS
8 40 Maintaining franchisee wellbeing in uncertain times
42 A three phase approach to COVID-19 resilience
44 Strategies to support mental health in challenging times
46 Stellar: New technology from Redcat offers struggling
restaurants a lifeline
49 7-Eleven delivers for franchisees & customers
51 Delivering for businesses during the shutdown
54 How to take your face-to-face events online in a
COVID-19 world
Key features:
56 Baby Sensory pivots to support franchisees through
• Delivery - We'll arrange a driver to pick-up your food COVID-19
• Ordering Food through Google - Your live menu published on Google 58 Franchises demonstrate community spirit during COVID-19
• Online Ordering - Via your website 16 60 Franchise partnership pivotal in planning for resilience
• No need for new hardware - Simply runs in your browser
• Own your customer data – You can export your customer data and send offers
PUBLISHER EDITORIAL CONTENT ENQUIRIES DISCLAIMER
The Franchise Council of Australia Editor, Franchise Council of Australia The views expressed in this journal do not necessarily
ABN 17 002 789 988 T 1300 669 030 reflect the views or policies of the FCA. Publication
Level 19, 567 Collins St Melbourne VIC 3000 E editor@franchise.org.au of advertisements for products or services does not
indicate endorsement by the FCA. The responsibility
www.redcat.com.au/stellar T 1300 669 030
F + 61 (0) 3 9508 0899 ADVERTISING ENQUIRIES for accuracy of information is that of the individual
contributors, and neither the publisher or editors can
E info@franchise.org.au Peter White, Franchise Council of Australia
accept responsibility for the accuracy of information
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FRANCHISES DESIGN AND LAYOUT
own inquiries in making any decisions, and, where
necessary, seek professional advice.
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RESTAURANTS 387 Tooronga Road, All material is published at the discretion of the COPYRIGHT
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thefranchisereview | 1
A MESSAGE FROM THE CEO
“The FCA is continuing to work closely with government
and other industry peak bodies to ensure that the voice of
franchising and small business is heard by government as
we head down the path to economic recovery.”
A lot has changed since our last For the FCA, it has meant stepping up on the same leave loadings as permanent
our advocacy and activity to represent workers will make it simply untenable
edition of Franchise Review and our members’ interests and concerns to for many businesses to keep them
businesses and community have government while delivering timely employed. Businesses will hit the wall, and
information, business advice and practical
had to face the massive challenges employees will ultimately lose out.
support to help meet the trading and The FCA is hopeful of an improved
created by restrictions to stop the workplace challenges. outcome as a result of its strong
spread of COVID-19. The response from our members representations to the Federal
has been terrific, including more than a Government on this issue.
hundred emails and messages of thanks
and congratulations, as well as significant Calling for food delivery
positive feedback from government and platforms to cut fees
media. Most of Australia’s 90,000-plus
We have taken a strong public stance
individual franchised outlets are
on the key issues which have impacted on
small businesses employing 598,500
the sustainability of franchising and small
Australians and many are in the food and
business, and the wellbeing of owners,
hospitality sector, so when they struggle,
managers and staff.
there’s massive impact on the national
Some of the key platforms have been:
economy.
• the need for rental relief and
The FCA argued that unless the food
government intervention as some
delivery platforms reduced commissions
landlords refused to negotiate despite
to help sustain restaurants and food
the plight of their tenants, especially in
franchises, there was a risk that many
retailing;
would not be able to continue operation,
• the need for tangible government
A voice for
with the threat of further major job losses.
support for businesses to help maintain
staff and supplement their income as
Relief for commercial
trading revenue evaporated;
tenants
• assisting with expert advice on
franchising and
managing staff working from home, The FCA also welcomed the ACCC
including maintaining their commitment, decision to allow tenants and landlords
morale and mental health; and to get together and collectively negotiate
• calling on the big food delivery outcomes that optimise businesses’
small business in
networks experiencing a huge lift in ability to meet rental obligations will
volumes to help the struggling food support their ongoing sustainability as a
retail and hospitality groups rather than result of COVID-19 trading impacts.
profiteer. The decision recognised the urgency
unprecedented
• currently making strong for retailers and landlords to collectively
representations to the Federal negotiate rent relief was an excellent
Government on the issue of redefining outcome following a joint application to
casual workers, and we are hopeful of an the ACCC by the FCA with the National
times
improved result. Retail Association, Australian Hotels
Association and the Pharmacy Guild.
The definition of casual
workers Looking to the future
IR is at crunch point, and last week’s Small businesses have been hit hard
court decision to redefine casual workers by COVID-19 and although restrictions
means we can’t put this conversation off are starting to be eased, the impacts on
By Mary Aldred, any longer. There are thousands of small individual businesses and the economy
CEO, Franchise Council of Australia businesses and hundreds of thousands of nationally will be felt for some time.
casual workers this decision is going to The FCA is continuing to work closely
hurt, if left unanswered. with government and other industry
Casual workers are paid a higher base peak bodies to ensure that the voice of
wage, trading off sick leave and annual franchising and small business is heard by
leave permanent workers receive for a government as we head down the path
lower base wage. Putting casual workers to economic recovery. n
2 | thefranchisereview thefranchisereview | 3
FCA delivering
for members
during COVID-19 By Peter White
Executive Manager,
Franchise Council of Australia
Like so many of our opportunity to delve deeper into the For some time now, the FCA has been
issues that were impacting members dedicated to developing partnerships
member businesses, and provide clarity on fast moving and relationships with organisations that
the Franchise Council developments. Many of these webinars meet the business needs of members
have taken place just a handful of days across areas including employee
of Australia has through after major government announcements relations and HR, superannuation,
necessity refocussed the to ensure members have the most timely insurance, online learning, technology
and up-to-date information available. and finance, energy, POS, printing
way we deliver services Topics have now included: services and more.
during COVID-19. Understanding the Employment The value of these partnerships has
Implications of JobKeeper; Explaining the never been more apparent than we’ve
And like so many of our member Commercial Leasing Code of Conduct; seen over the past weeks, as we have
businesses, we have found new ways Tax and Accounting during Covid-19; drawn on their subject matter expertise
to connect and deliver value in this COVID-19 impacts on Superannuation in our member updates and webinars
challenging new operating environment. and Insurance; Optimising energy and shared their offers to assist members
With the situation developing rapidly usage and cost during the challenge of through this time.
during March, the FCA quickly identified COVID-19; The Psychology of Maintaining These regular webinars and Member
that members needed a reliable source to Positive Mental Health and Resilience; Updates are planned to continue over
provide vital information and resources at and an interactive webinar with Federal the coming months to assist members to
a time of rapid change and uncertainty. Minister for Employment, Skills, Small operate successfully on the other side of
As the Federal Government made and Family Business Senator the Hon. COVID-19.
announcements on business restrictions Michaelia Cash. The FCA is continuing to monitor
and stimulus measures at breakneck The response to these webinars from developments around COVID-19,
speed during March and April, the FCA FCA members has been overwhelmingly including ongoing social distancing and
made sure our regular email Member positive. Registrations and attendance business restrictions, and will be taking
Updates contained the key details have often been well over 200 people, these into account, as we look to optimise
members needed to know. with a strong Q&A component ensuring and adapt our regular program of
Alongside these, we launched the webinar panels tackle the issues that events, including the National Franchise
a webinar series that provided the are most pressing for attendees. Convention, over the coming months. n
4 | thefranchisereview
The impacts
A national survey of
franchise businesses
of COVID-19
showed significant
reductions in March
2020 revenues as a
on franchise
result of COVID-19
trading restrictions and
self isolation.
businesses
The “Pulse Check” survey was
undertaken by FRANdata for the
Franchise Council of Australia to gain
insights on the initial impacts and
experiences of the Australian franchise
sector during the COVID-19 pandemic.
Representatives of 55 franchise
Expectations Assistance
systems covering 11,037 individual
franchised business outlets contributed to $ 33%
the survey. 44.7%
Franchisors
Revenue
$ 58% providing financial
assistance to more
than 50% of their
$ 11.8% network
A high level of respondents (33 per As at 31 March 2020, 44.7% of
cent) indicated that 100 per cent of their respondents were providing financial
franchised business outlets would record assistance to more than 50% of their
a loss for March. network compared to 31 December
The majority (58 per cent) of 2019 when 73.9% of franchise systems
Revenue falls of 25-50% 30% respondents also anticipated a said less than 5% of franchisees were
significant weakening of income in the being given financial support.
Revenue falls of 50-100% 28%
current quarter, with only 11.8 per cent The highest level of financial support
Income increase 20%
anticipating an increase. is occurring in the food retail and
sit-down restaurant category and the
Almost one-third (30 per cent) of
respondents indicated revenue falls of Support lowest in the maintenance type services
categories.
25-50% on February figures and a further
28% indicated a 50 per cent to 100 per
cent fall in monthly revenue. 94% Landlords
On the other side of the coin, Prompt and
approximately one in five (20 per cent) sharp focus by
#ChooseKindness
indicated an income increase in March franchisors on
actions to support
2020.
their franchisees.
Industries Survey respondents reported a 36% 17.6% 31.4% Rest is a super fund committed to supporting employers
prompt and sharp focus by franchisors and their teams through these challenging times.
on actions to support their franchisees. In Landlords were noted as
fact, 94 per cent of respondents provided “unhelpful” or “very unhelpful” by Over 85% of retail and fast food workers report being
specific and often multiple examples of 27.5% of all respondents (or 36%
the actions they were taking to support when “not applicable” responses are subjected to verbal abuse from customers.*
their franchisees. excluded) and as “helpful” by only
Financial assistance (direct and 17.6%. 31.4% described landlords as During this unexpected time, let’s do our best – together.
indirect) was being provided by 61 per “indifferent”. n
cent of surveyed franchise systems.
Specific assistance to navigate through
Industries showing the greatest changed business regulations and
resilience include pet related, available financial support packages The information gathered in the Learn how we can help at rest.com.au
maintenance and health services. was being provided by 29 per cent of survey will be used by the FCA to
Vulnerability was evidenced across retail, respondents and direct involvement in support ongoing submissions and
restaurants and fitness clubs. landlord negotiations was being provided representation to government for
to franchisees by 18 per cent of franchise Australian franchising. *Source:SDA2017survey.
Thisinformationhasbeenpreparedwithouttakingaccountofyourobjectives,financialsituationorneeds.Beforeactingontheinformation
systems. ordecidingwhethertoacquireorholdaproduct,consideritsappropriatenessandtherelevantPDSwhichisavailableatrest.com.au.
IssuedbyRetailEmployeesSuperannuationPtyLimitedABN39001987739(Rest),trusteeofRetailEmployeesSuperannuation
6 | thefranchisereview TrustABN62653671394(Fund).
The
post-Covid-19
Unemployment
will create a larger
Boom times
franchising
pool of quality
franchisees
fundamentals
ahead for Better locations Prospective
Competitors
franchising?
will become available franchisees will
will fall by the
& more realistic deals have some capital
wayside due to
possible as quality and an enhanced
the Covid-19
tenants have increased motivation for
economic impact
negotiating power financial certainty
By Stephen Giles
Partner,
With most assets
Norton Rose Fulbright Australia Quality intangible and reliant Franchise networks
franchisees have on management can re-establish
been hibernating expertise, corporate and expand more
due to Government restructures can often quickly than other
support be effected without structures
founder loss of control
Graphic courtesy of Norton Rose Fulbright Australia
As a leading legal Never will the business fundamentals better able to curl up into a smaller ball to hibernated well due to the Government There will also be a new due diligence nowhere, and will miss the opportunity.
be so ideally aligned for quality franchise hibernate. The well-targeted Government support package, and can re-start question for prospective franchisees – Importantly, focusing on the past or
advisor to the franchise systems. Indeed for some franchise support packages have helped a lot, quickly and even grow into multi-unit what did you do for your franchisees being dragged back to it is fatal.
sector, Norton Rose systems, the period following the as they reward those businesses who operators with the right additional during the COVID-19 pandemic? 4. A differentiated franchise offer
COVID-19 pandemic in Australia will understand their customers and can funding; Or for that matter your staff and that meets new market expectations,
Fulbright Australia present the biggest opportunities seen in control their costs. 6. The extent of financial carnage your customers? Leadership is best and has credibility in a skeptical
partner, Stephen Giles, more than 20 years. Not since 1998, when in the market will mean that franchise demonstrated not during growth times, market where the general reputation
the introduction of the Franchising Code The stars are aligning systems needing to restructure can but in the tough times. of franchising will remain tarnished.
has extensive experience of Conduct coincided with the beginning The aligning stars of prosperity include do so without the typical scrutiny or Features are likely to include:
guiding franchise of 10 consistent years of strong economic the following: reputational damage. The safe harbour The keys to riding the wave a) Being independently and
growth, have we seen so many growth provisions protect directors, and the objectively rated, so franchisees can make
businesses through opportunities, and such a quality pool of
1. Unemployment will create a
larger pool of quality franchisees, so fact that most assets are intangible
How do franchise systems position
themselves to ride the next franchising a truly informed decision;
economic uncertainty prospective franchisees. franchisors can be more selective and means restructures can occur without wave? It is not just a matter of turning b) Being financially accredited both at
Historically the franchise sector has the loss of founder control; franchisor and franchisee level, as access
and regulatory change. often been counter-cyclical, with the
discerning than they have been able to
7. The inherent nimbleness of
up, or re-commencing as if nothing has
to finance is the key to growth post
be in recent times; happened, because a lot has happened.
Through it all, he has seen exponential growth in franchising in most 2. The franchisee pool will include franchise networks means they are Some things will never be the same. A COVID-19;
the franchise model prove countries coinciding with an appetite for people with prior business and better able to re-establish themselves few of the important things are: c) Lower entry costs, as prospective
growth, difficulties in securing finance management experience, as well and take advantage of new market 1. A compelling (and revised) franchisees will not be prepared to pay
its resilience time and and relatively high unemployment. as a small amount of capital from a opportunities. customer proposition. Customers will as much for a business in a competitive
time again. As the world Perversely, as we have seen in recent redundancy. These people will struggle
Only the best will prosper
be buying more online, they will expect market; and
times in Australia, franchising growth to re-enter the workforce and secure greater use of technology, they will d) Lower operating costs, given the
braces for the uncertainty slows when funding is readily available, a job on $100,000 a year, as middle There is however a qualitative have a closer eye for value, they will likely lower revenue environment.
of a ‘new normal’, Stephen and the pool of franchisees is depleted by management will be collapsed by overlay or proviso to this prediction. want reassurance on health and safety 5. A strong technology platform
almost full employment. We have seen a large corporations seeking to maintain Only those franchise systems able to in the premises and they will expect and digital presence – the world has
predicts the franchise trend away from franchising to corporate profits in times of reduced turnover; stand out to discerning franchisees paperless transacting. changed, and Australia lags the world
sector is well placed to outlets, with some taking the view that 3. For most, it will be less of a hyper- in a crowded franchisor market will 2. Leadership – franchisees expect in e-commerce. Australia will catch up
franchising is just too hard from a people quickly.
take advantage of the management perspective.
competitive environment, as some
competitors will have fallen by the
prosper. We have already seen first-
movers such as Poolwerx, Pack & Send,
leadership, and they will remember
what happened during the tough 6. A robust ability to withstand
opportunities it might Now the worm has turned again. I wayside due to the COVID-19 impact; Tatts, Quest Apartment Hotels and times. Franchisors expecting to lead a isolation or unforeseen circumstances,
predict history will show that franchised as people will want to know they can
offer. businesses will have weathered the
4. For those in retail, better sites will Muffin Break secure high-performance network forward must have performed
withstand challenging times; and
become available, and more realistic ratings under the Australian Franchise well during the COVID-19 pandemic.
COVID-19 storm far better than corporate rental deals should be possible as Ratings scale. Objective assessment of Remember a favourite quote of mine 7. An effective multi-unit franchise
networks. We have already seen many quality tenants (particularly those franchise systems will be an important – ‘there is no softer pillow than a clear model with independent capacity
major corporate collapses, particularly in with a growth story) have increased differentiator, particularly as the media is conscience”. to be funded. Funding of multi-unit
retail. Not so much franchise networks. negotiating power; still likely to take a negative angle and the 3. A growth and expansion strategy franchisees is likely to be a key to
Franchisors and franchisees are just 5. Quality franchisees have political environment remains fluid. and plan. Marking time is going franchise network growth. n
8 | thefranchisereview thefranchisereview | 9
1
Federal Government Initiatives these businesses to notify the
Australian Tax Office (ATO) of these
Cash Flow Boost errors, as the ATO will undertake
For franchises, the “Cash Flow subsequent reviews and may require
Boost” comes in the form of a credit incorrect payments to be repaid.
in the business’ business activity Additional assistance may be
Act now.
statements (BAS) lodged for each applicable for business, in the form of
monthly or quarterly period from a deferral of tax-related payments on
Immediate
March to September 2020. The main an interest free basis until September
benefit of the cash flow boost is a 2020. We recommend that you
relief
tax-free total credit provided by the seek advice from your tax advisor
ATO over the relevant BAS periods to determine whether deferral of
measures
of between $20,000 - $100,000, payments is an option for your
calculated with reference to the business. The good news is that at
and access
amount of tax withheld on salary and the time of writing this article, we
wages by that business. have seen cash flow credits flowing
to Federal
to client accounts which is providing
Eligibility criteria welcome relief to many businesses in
Businesses must have employees
and State
the franchise sector.
and an aggregated turnover of less
than $50m in order to be eligible.
Government When assessing eligibility, the concept
of aggregated turnover can be
support complex, so we have outlined a simple
Preparing your
framework to apply. Aggregated
turnover will include the turnover of:
• The test entity;
• Entities (connected entities) that
franchise business
may have ownership in the test entity;
• Entities (connected entities) that
the test entity may have an interest
in; and
to bounce back
• Entities (affiliated entities) that
act in concert together, which may
include some franchise agreements.
Joanne Murray
in the wake of
Let’s unpack this with an example:
Joanne.Murray@pwc.com
• A franchisor may have to
PwC Australia
aggregate the turnovers of their
Partner, Private Clients
franchisees when assessing whether
(+61) 3 8603 3078
COVID-19
they breach the $50m threshold to be
eligible for the cash flow boost.
Tim Hall • Similarly, depending on their
JobKeeper program
tim.a.hall@pwc.com franchise model, franchisees may need “The JobKeeper subsidy is
PwC Australia to aggregate the franchisor’s turnover providing businesses with critical
Partner, Private Clients when assessing their own eligibility. economic support, allowing
(+61) 3 8603 5015 • Practically, this may be difficult businesses to re-open stores and sites
Article provided by to assess or have access to relevant where it might not be economically
PwC Australia “With COVID-19 causing a 1 in information to make an informed viable without the funding. It is very
100-year impact on many businesses, decision. important for taxpayers to ensure
Federal and State Governments It will be critical to understand that they maintain documentation
As Australia prepares to reboot the economy following have responded positively via the both legal structures and contractual to support their application and
the after-effects of COVID-19, we believe the franchise introduction of multiple initiatives to relationships in assessing the need to continue to comply with the ongoing
support businesses and give them the requirements” - Joanne Murray.
community will play a vital role in stimulating much needed best chance of emerging on the other
apply the aggregated turnover test.
On 30 March 2020, the Federal
Structure may again play an important
growth. Having worked with over 300 franchise groups in side” - Tim Hall. role in the amount a group may be Government announced the
Whilst the intention of Federal
the past 20 years, we are deeply committed to providing and State Government initiatives is
eligible to receive. Take for example: “JobKeeper” program, which
broadly comprises a wage subsidy
- a corporate group with multiple
the necessary support to help businesses deal with their to support businesses of all shapes entities where each entity is to help eligible employers keep staff
immediate needs and bounce back with a renewed vision and sizes, the complexity of assessing eligible to receive the cash flow employed. The subsidy of $1,500
eligibility for some businesses - boost; or per fortnight is paid (in arrears) to
and plan to reshape their future in a post-COVID-19 world. particularly franchises - can be difficult - a corporate group with a single each eligible employee for up to
to navigate. Here, we look at the various employing entity, which is the only 6 months commencing 30 March
In this article we explore three key areas franchise businesses support packages available that may entity who may be able to claim 2020. Although welcomed by many
apply to your franchise business. Each businesses, as JobKeeper is paid in
should address as they adapt to the challenges brought on business should seek their own advice
the cash flow boost.
arrears there can be a short-term
A word of warning though, some
by COVID-19. on the application of these measures to taxpayers may have inadvertently cash flow strain on businesses who
align to their unique circumstances. received the cash flow boost where may already be facing cashflow
not eligible. We would encourage pressure.
10 | thefranchisereview thefranchisereview | 11
2
What’s next?
3 Business Strategy
• Evaluate what you do well
and how you can solve the biggest
challenges in your industry and
“The decisive and targeted
government initiatives
Adapting to the customer base. It’s about finding the
art of the possible to think differently
Tips to were a welcome life raft for ‘New Normal’. with renewed vigour and positivity.
stabilise
many potentially drowning Finance
Eligibility for Employers businesses. Now business Reshaping • Look for ways to improve your
your cash
cash flow and liquidity and medium
To be eligible for the payment, an
employer must experience a decline
owners need to stay afloat
and not take on water your business to long-term forecasting. This is
preservation
of services provided in the relevant important to understand how your
in GST turnover of:
• 30% or more for a business with
period. However, the Commissioner or get weighed down by
excess baggage.”
strategy to business is capitalised and what
and set you
has provided two alternative measures you need to action for a
annual aggregated turnover of
$1 billion or less; or
methods, accruals accounting or GST thrive in a rapid revenue recovery.
up for short to
attribution, which, if “applied in good
• 50% or more for a business with
annual aggregated turnover of more
faith”, may be used as a proxy for post-COVID Workforce
• Start building your post-COVID
medium-term
determining GST turnover. You may
than $1 billion relative to a comparable
period a year ago (of at least a month
be able to use one of these methods world. return to work strategy. Map out
the roles and responsibilities of your
recovery
if you have practical difficulties in
or three months). workforce and how changes may
assessing GST turnover.
In assessing whether the business impact your operations and human
If you have applied (or may apply)
has suffered the necessary decline, 1. Cash is king: Continue the resource policies.
for JobKeeper, you should make sure
you can compare either the GST focus on optimising your cash
that you have good documentation Customer
turnover for a particular month or position, but don’t forget the
to support your decline in turnover • Prepare a customer
for a relevant quarter. For example, accruing liabilities.
calculations. It is also important that communications strategy that is
for the June quarter, the projection 2. Trim excess fat: Review
you identify and maintain all of your purpose-led. Embed this strategy
for a decline in that quarter must your expenditure and identify
eligible employees (noting that not across all touchpoints for a consistent
be made on a reasonable basis, and opportunities to reduce, renegotiate
all employees may qualify). There are and authentic customer experience.
we strongly suggest that you keep or terminate costs that are ‘nice to
also ongoing payment and reporting • Where possible, fast track
documentation to support your have’ but not ‘need to have’
requirements that you must satisfy. any digital projects to reflect your
calculations and assumptions. 3. Pick winners: Review
The ATO will review some taxpayers changing customer expectations.
If a business does not satisfy the customers, suppliers and staff and
and if you have incorrectly assessed
decline in turnover for the first test identify those who you believe are Operations
eligibility, or cannot support your
period, either April or the projected the most important to the success • Develop a business continuity
claim, the consequence could include
June quarter, they may satisfy of your business. plan with emphasis on arrangements
repayment of the subsidy together
the criteria where they suffer the 4. Have a ‘Plan B’: Prepare a for handling new outbreaks of
with penalties and interest. You
anticipated decline in future periods
should seek advice on these matters backup plan ready to swiftly enact Susie Salmon COVID-19.
and therefore become eligible to if one of your critical stakeholders susie.salmon@pwc.com • Assess where you can improve
if you are unsure of your position.
receive JobKeeper payments from
For more information around
Martin Ford cannot support your business plans. PwC Australia productivity, such as logistics and
that later point. However, once an Martin.ford@pwc.com 5. Know your funding gap: Partner, Private Clients supply chain.
employee eligibility and how to apply
entity has established it has met the PwC Australia There will be a wave of funding (+61) 3 8603 2080 • Pay attention to cyber security
for the JobKeeper program, visit the
requisite decline, it is not required to Partner, Business Recovery Services, demands in August/September. and have a plan to mitigate any
PwC website.
retest that in later months. Financial Advisory Smart businesses are engaging with “What will it take to win in a post- unforeseen risks which may arise. n
The Commissioner can determine State Government Initiatives (+61) 3 8603 3078 their banks/financiers now to be COVID world? Stay relevant, keep up with
that an alternative decline in turnover The various state and territory at the front of the funding queue, new demands and shifts in your customer
test can apply where an appropriate governments have introduced “The decisive and targeted ensuring sufficient time to address consumption to create something that no- Preparing for the ‘new normal’
comparison period for 2019 is not concessions for small to medium government initiatives were any queries ahead of the funding one else has thought of to propel you in won’t be easy but reimagining
available, for example: enterprises largely relating to relief a welcome life raft for many need. front of the competition” - Susie Salmon. the possible for your business
• where a business was not from payroll tax. While this may be potentially drowning businesses. It is critical that businesses, As you look to the future, it is important can create a competitive edge
operating a year earlier; or relevant for franchisees depending Now business owners need to stay after what has rightly been an to refresh your strategy plan and identify that will sustain change no matter
• where the prior period of upon their size and structure, the afloat and not take on water or get initial focus of stabilisation and those drivers which have the most impact how big. If you need support to
business is not representative of main challenge is that each state has weighed down by excess baggage” cash preservation, now focus on to your franchise business. Implement a reshape your strategic business
usual circumstances (e.g. bushfires or introduced their own conditions to - Martin Ford. identifying and managing the three practical action plan to navigate your path plan, reach out to a specialist
drought). both eligibility and the associated In the coming months it is key funding drivers for a successful back to sustainable growth. advisor to help you navigate your
In addition, the JobKeeper rules benefit available. For instance, important to turn your attention return from hibernation: accruing Let’s evaluate some of the key drivers options. You are not alone; we are
cater for groups that employ their businesses operating across Australia to proactive measures to stabilise liabilities, exit and/or investment which you can focus on as you reshape here to help.
employees via special purpose may be eligible for varying payroll and preserve your cash position. costs and re-entry working capital. your future plan:
employer entities. However, the tax refunds or deferral of payroll tax Those who do not act decisively in
application of this alternative test is amounts dependent upon the level of addressing their key working capital
strictly limited to specifically provided Australian or state wages paid by the issues, may be unable to deal with Disclaimer: This article provides general taxation information and is not intended to constitute tax, legal, financial services or planning advice and should not be relied upon by
circumstances. employer. the tsunami of accrued liabilities you without consulting a professional advisor based on your individual circumstances. This article is based on information and circumstance known at the date of publication.
To the extent circumstances have changed, the article may no longer be relevant or correct. The information in this article is not and was not intended or written by PwC to be
The term ‘GST Turnover’ is not For updates around tax obligations come August/September when the
used, and it cannot be used, for the purpose of avoiding penalties that may be imposed on you by the Australian Tax Office. PwC accepts no duty of care to you or any third
straight forward and does not and relief for businesses affected temporary relief expires. parties and will not be responsible for any loss suffered by you or any third party in connection with or reliance upon the information in the article. PwC refers to the Australia
necessarily align to what is on your by COVID-19, visit our dedicated We recommend that you member firm and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
BAS. Broadly, it includes the value COVID-19 website. consider the following key areas: PwC’s liability is limited by a scheme approved under Professional Standards legislation. ©2020 PricewaterhouseCoopers. All rights reserved.
12 | thefranchisereview thefranchisereview | 13
Value #1 promise under a new COVID-19 We re-forecast every franchisees’
Energise branding device, to provide confidence business plan on a quarterly basis
in our strict safety standards and with a variety of scenarios including
Our energetic value is about
to show our commitment to the - same as last year, 7.5% decline and
speed, agility, quick decisions and
wellbeing of our franchise partners, 15% decline with associated expense
empowering our people to ‘just do it’.
team members and clients. The reduction strategies. Most importantly,
March week one. We immediately
lifebuoy logo was quickly displayed on we moved to monthly franchisee cash-
set up a 7am daily Cabinet meeting
all our vans, instore, uniform badges, flow monitoring.
with our senior leadership team (SLT)
digital marketing channels and emails.
and appointed a COVID Coordinator Banding together as an
to be our go-to on everything. We But there needs to be a new industry
quickly expanded our communications empathetic connection We know governments prefer
to the network with daily video
We have seen our network pull to deal with industries rather than a
updates from an SLT member to
together during these times to single brand, so we quickly formed a
keep our franchise partners across
continue to deliver service. Upon Swimming Pool & Spa Association of
key developments and changing
hearing a client needed to put their ANZ industry sub-group gathering
government information and arranged weekly team virtual catch-ups became
pool servicing on hold after he and his CEOs of pool franchise brands –
weekly town-hall Zoom meetings and common to aid mental health.
wife, both chefs, lost their jobs, one of Swimart, Clark and Jims. We met
weekly Poolwerx advisory committee We’ve had no COVID-19 infections
our franchise partners went above and weekly with our competitors to
(PAC) meetings. across over 1,000 staff in three
beyond. They serviced their pool for share learnings and best practice
But we didn’t stop there. We countries and at the start of every
free on Good Friday to ensure it would and we co-funded a lobbyist to work
formed a Cabinet with veteran meeting we ask the question – ‘is
be safe for the whole family to swim collectively on our behalf. This work
franchise partners who were with everyone safe?’
in during the Easter Long Weekend, saw us successfully open our doors
us during the GFC and utilised their
leaving behind a basket of Easter eggs again in New Zealand in a limited way
learnings from that period. We also Value #4
for their two young children. I’m proud during the level-4 lockdown. It’s been
formed a Cabinet with our suppliers Find the better way, and to see our value “People first, always” an all industry effort and great to see
to ensure we had a full supply chain Value #5 reflected in everything we do, even in competitors work together to achieve
response. Dare to succeed times of crisis. common goals.
With home the new place of
These are the constant From a local perspective, our
Poolwerx’
work, study and play - we lobbied
improvement and entrepreneurial franchise partners also reached out
governments in the USA, Australia
values that have kept us at the top of personally to their local members with
and New Zealand at Federal, State,
our game for nearly 30 years. They letters and calls with information on
County and Local levels to ensure
keep us on our toes and force us to be the ‘essential nature’ of our service.
they understood we provide an
values are
agile and nimble by nature. Most received great response, many
essential service to help safeguard
March week three. We developed were already clients, which helped
the community and keep backyards
new contact-free services, trained all with the campaign.
healthy during lockdowns. These
staff in infection control, and rolled
conversations were crucial in keeping
driving a
out the new services across more than Eyes firmly set on the future
franchisees’ doors open, and they did!
350 retail and mobile locations in three We’ve constantly evolved through
As a business we replaced BAU
countries. These included: the decades and this innovation
with Business as unusual. Every crazy
• Poolside Water Test & Treat – through diversification has paid off
idea, new or old, we put back on the
dramatic
designed with our retail clients in mind, for our business, the world’s largest
table. We achieved all this in the first
we come poolside to do a water test pool and spa servicing company. From
week of March and our energise value
and treat their pool. humble beginnings as a domestic
ensured there was a culture of speed
• Poolside Water Test & Deliver pool service provider, we’ve evolved
to change.
reinvention
– for our DIY clients, we will come Franchise partner support into commercial pool servicing, retail
Value #2 to test their pool water, and leave systems stores, renovation, spas and now
chemicals and comprehensive dosing
People first always, and We reinvigorated a lapsed concept,
e-commerce. Having a business model
instructions for them to treat their own with multiple revenue streams allows
Value #3 ‘Adjacent Partner Support’, which acts
pool. franchisees to change emphasis for
Do the right thing • Home Delivery – clients can
as a buddy system between franchise
different market challenges, such
March week two. We turned to our partners, so they can also support one
phone, text or email and we’ll deliver as those presented by the global
Poolwerx’ five corporate values were born out of people values to keep them safe and chemicals and all pool needs to an
another at local level.
pandemic.
Our Poolwerx Family Welfare Fund
tough times and have dug the brand out of every operational. We closed our head office agreed safe place at home.
kicked in with small acts of kindness
Our people are safe, our doors have
and set up remote working. Next, we • Curbside Dropbox Water Testing stayed open, we’ve created a new
rough patch since the business started nearly 30 years installed sneeze-shields in all our retail – clients can leave their water sample
and we have been heavily promoting
COVID contact-less model and we’ve
our third party free and confidential
ago. These values have served us well in previous stores to protect both staff and clients at a designated area in front of our
counselling service to the entire
progressed with how we bounce back
and moved to one person per van to stores, our team will contact clients
downturns including the GFC, where the business protect technicians. with results to arrange pick up or
network to ensure we’re supporting
an even stronger brand. n
actually grew. As we face another global crisis, our As the Coronavirus spread and home delivery of chemicals.
mental health awareness.
We already had in place a store
further restrictions were put in place, • Curbside Park & Test (don’t leave
values will be the backbone of our transformation. our Business Development Managers your car) - storefront water testing,
shutdown procedure, so if some of About John O’Brien
our businesses needed to go into As CEO and Founder of Poolwerx,
remained in daily video contact with where we collect the clients water
By John O’Brien every franchise partner, ensuring they sample from the car, complete the
hibernation, they had a step-by-step John O’Brien leads the largest global
guide to support them through the swimming pool service and retail
CEO and Founder, had access to all the help and support test in store and deliver the treatment company. O’Brien founded Poolwerx
they needed. Daily field visits and process from managing rent to vehicle
Poolwerx regular business meetings moved
chemicals to the car.
leases, utilities, etc. We haven’t had to 30 years ago and has grown it into a
As we rolled out our new initiatives, multi-award-winning system.
to being held remotely and daily/ use it!
we supported these with a consumer
14 | thefranchisereview thefranchisereview | 15
Before Through As things When the money
COVID COVID improve starts to return
Affluent Survival Needs Affluent
Five
Wants Cut back spending The things they’ve missed Different wants as the
Delivered fast Basic needs met most economy changes
Little luxuries added But at affordable prices Some industries will
disappear or take forever
critical
Growing demand for local, Demand for different local,
quality product becomes to return:
quality product-food is up
the norm e.g. travel, tourist trade
there now.
And so does demand for Others will build:
Transparent quality service
steps for
transparent, quality service e.g. demand for different
Online everything local, quality products and
Online is here to stay.
service is here to stay
managing
2. It’s all about people Triumphant Cleaning Services in Perth 5. Then put yourself
did just this when I worked with them. into the position of
We have to be focused on what
They quickly got rid of their domestic arm
is happening around us and keep an captain
change
to concentrate on strata cleaning services,
eye on what people really want as the So many business owners I meet
and in the ‘killer’ move, owner and GM
environment changes. every day are still working in the
Shannon replaced himself with one of
It starts with your customer and their business. Managing the shop floor,
his supervisors, stopped taking calls or
changing needs and wants through this making sales, micro-managing staff
looking at email until 3pm daily. This
time (see table above). because they say it is the only way to get
restructure, along with better systems,
So much of what has changed will stay things done properly.
meant they increased turnover by 48% in
and then change again differently as we This is the killer.
How to prepare for bounce back and focus on the big picture for your business move out of lockdown. Online is here in
six months, even before they franchised.
If you want to grow your business,
And went on to increase turnover by
a big way, so is the demand for different, you have to be able to delegate. If you
$1.2m – all before they franchised. The
I know it’s difficult. Flexibility is going to be the name of delicious, quality local product. Overseas want to delegate you have to be able
key – they looked like and worked like a
One day we were happily trading. the game in business for a while. tourists have gone for a while. to make sure your staff do the job
franchise even though, ultimately, they did
• We knew our customers So, what to do? And, online or face to face, the properly. And to do that you need to
not choose to grow using this model.
• We knew what they wanted demand for excellent, transparent sales simplify, streamline, systemise, select
1. R
ecognise that in Yes, it’s real and I come across so many
• We knew how to make them happy and service is only going to increase. You the right people and give your staff
examples of this growth once businesses
Then, the next day – nothing… every downturn, there do need to put in people who will relate properly documented, easy to use
become focused on what’s important.
And now, as restrictions ease, it’s are opportunities for to your customer base with empathy and operations to do the job right. This
crystal clear many of us are not going business growth efficiency.
4. Examine future opportu- means the operations need to be in
back to that happy pre-COVID place in Your sales and customer service a format that works, and in our new
In every recession from the nities and then restructure
one piece. The business environment has people are the ones bringing in the era of business that simply has to be
changed, we have changed and so have
beginning of time there have been
money. So, you need to make sure they
your business as a lean,
cloud-based.
our customers.
businesses, people, entities that have
have the attributes (skills and personality) mean and very responsive
been able to grow out of problems and Then you can spend your time
• Our cashflow has taken a hit. There’s to do the job in a way your customers machine for growth focusing on the big picture of the
make good.
probably no spare cash to spend on love. The personality of your business Steps 1 – 3 above are all part of the business.
I have seen this in the last three
building business is going to become more and more first step we ask all our businesses to What are the changes happening
recessions. For example, look at how,
• Suppliers, landlords, banks and more important as we come out of this phase go through in our Restructure to Grow around you?
after Paul Keating’s 1991 / 92 “Recession
By Brian Keen, have changed the rules – some good and
we had to have,” Silvio’s Pizza merged
and it’s your people who give your Workshop where we work with you to How can you adjust the business
some not so good business its personality. identify your opportunities and the best as you see what is going on as
Founder, Franchise Simply • Staff have been put off and even
their brand with Domino’s and their
So often I see businesses asking sales way to take them on board.
business growth took off. business changes fast over the next
with the help of JobKeeper, some will and service staff to also take on tasks It doesn’t matter then which business few years to a new normal?
Personally, in those same years, as a
never come back. So, we’ve lost a lot of they are just not suited to. You can’t ask model you choose for growth – contractors, Everyone agrees that as a business
Perth-based partner in The Franchise
back up and help. a massage therapist, with a soft and employees, company outlets, licensees, leader, business flexibility is going to
Alliance, we were delighted when we
• Many of our customers have found supportive personality to also do sales franchise partners - the structure you will be your new normal.
were able to place ourselves well once
other ways to appease their wants or – it just won’t work. In this case, to be finally put in place will be the same. If you are still drowned in managing
things started to move because the
simply let them go altogether successful, the sales will have to happen The bottom line is – look after the the day to day – business growth is
demand for well-priced franchise outlets
• Others have probably found new elsewhere in the business structure. people looking after your customers just not possible beyond a relatively
soared as retrenched employees started
things they want instead – things to fit and bringing in the money which means small beginning. n
to look to go into business and wanted
their newly constrained budgets and 3. Focus the business on putting in a structure something like below.
the security of a franchise for their first
circumstances
endeavors. The franchise recruiting side
what brings in the money
• Most importantly, our customers will Simplify, simplify, simplify…
of our business exploded and, because
have changed in the way they see the Business owners have a tendency Leadership and control CEO
there were few white-collar franchised
world and the way they want to interact towards an entrepreneurial personality
businesses at the time, we established a
with it and us – attracted to the next bright and shiny
number of new groups ourselves which Brand & Financial
And the thing is, it’s hard to know opportunity. Support making it happen IT HR Admin
also took off. Marketing Control
what the changes will be except that Go through the figures for each
The key is to be open-minded and
change is not going to stop for a while as part of the business and work out what
look for the opportunities. Then be
we all work our way out of this minefield actually makes the money. Bringing in the money Sales and/or Delivery
ready to grab them when the time
over the next few years. Then be ruthless and ditch the rest...
arrives…
16 | thefranchisereview thefranchisereview | 17PROTECT YOUR BUSINESS – INVEST IN YOUR FUTURE
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Like many businesses, Roll’d Each of these initiatives is designed the times and are embracing new delivery
to bring Roll’d directly to the consumer, methods,” said Bao.
has been severely impacted whether in their workplaces and offices, As he looks even further ahead, Bao
by the COVID-19 pandemic, or at home. Each also uses technology, sees the business model continuing to
whether it is live video feed or GPS evolve over the coming years.
but CEO and Founder, location data to better serve the needs of “The future of our world has changed
Bao Hoang, is using this customers. and it has made me consider what our
The Roll’d Run is a long-term business world will look like in five years’ time,” said
time as an opportunity model that will deliver pre-ordered meals Bao.
to implement long-term to work, home or office, as long as it is part “A typical Roll’d store will be located
of a Roll’d Run. Roll’d Runs are currently either at a door to a large shopping
strategies to build the launched in Melbourne and Roll’d plans centre or on a suburban high street. Roll’d
business into the future. to regularly adding on suburbs through will continue to cater for our current
expressions of interest from customers. customers in-store with those who work
“As a team, we are committed to
The Roll’d Runner food van is planned as in the centre or office tower or are just
continue adapting and refining our existing
a food truck home delivery service rolling shopping.
practices through innovation, to ensure we
from suburb to suburb and will bring the “However, the big difference will be that
build something new that is extraordinary.
Roll’d kitchen to your doorstep, making each store will have 10 delivery drivers,
Some of these changes will change our
food in front of people’s homes. Launching five in cars and five controlling drones,
business forever, but most importantly for
with a test suburb in Melbourne, the completing Roll’d runs during the day
the better,” Bao told The Franchise Review.
ultimate aim is to have one Roll’d Runner into local business parks, local sporting
They are changes designed to maintain
per suburb throughout Australia. clubs during games on the weekend, to
the livelihoods of the 1800 employees
Finally, the Roll’d Box is planned as local professional offices, to local schools;
and franchisees that the brand’s 82 stores
more of a do-it-yourself offering for anyone who wants to eat Roll’d but may
support – and to open opportunities for
customers, with deconstructed bowls of not have the time to get their Roll’d fix at
more positions into the future.
Pho delivered to customers’ homes, where a store.
“We believe that consumer behaviour
they can click on a link to watch how to “At night, Roll’d will be delivering to
has significantly changed and will remain
prepare the meal. people’s homes, to local sporting clubs or
changed beyond this pandemic,” said Bao. Benjamin & Benjamin Insurance Group ABN: 37 603 884 108 AR No: 1000626
“These group innovations are here gyms, to home dinner parties. Every Roll’d
“I have no doubt that technology and
for the long term and will become a store will also have a Roll’d Runner truck
convenience are the keys to the future of
permanent part of the Roll’d network, connected to their store. Working day and
www.benjamin-ig.com.au We operate in each state
hospitality. So we are melding technology
operations and logistics,” said Bao. night. I would very much like to see the
into our new delivery systems, with the PSC Connect Pty Ltd ABN: 23 141 574 914 AFSL No 344648
“We are incredibly proud to say our Roll’d Runner become the centre of every
Roll’d Run, the Roll’d Runner and the Roll’d
franchisees have risen to the challenge of community neighbourhood,” Bao said. n
Box,” he said.
18 | thefranchisereviewYou can also read
