Edition One Hundred and Forty Five of The Insider

Delivering franchising news and opportunities since 2005

Hello and welcome to The Insider.

Each week we source business, franchise and finance news from across Australia and around the globe - this week's edition is packed with all the latest.

In news this week -

Also in today's edition:

~ Franchisee recruitment - the latest figures on what works and what doesn't.

Plus:

~ Things that make you go "EWWW!" (lunch anyone?)

~ The latest scam, and how to avoid it

~ And we announce a brand new column coming soon to Inside Franchising and how you can be a part of it.

These stories plus many many more in this edition of The Insider.

Join us again next week for more news and updates from around the globe.

All the best,

the Inside Franchising Team

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Peak retail industry body the Australian Retailers Association (ARA) has applauded the Federal Budget's initiatives focused on supporting SME retailers during the global financial crisis (GFC).

ARA Executive Director Richard Evans said retailers had been struggling with reduced consumer demand for over 12 months and welcomed the Budget's $500 million in small business incentives and support.

"Small business is the engine room of Australia's economy and the support and incentives offered in the Budget show positive micro-financial management to help retailers push through this economic downturn. This is great news for business owners who are financially distressed and working hard to keep their doors open and maintain staff during the GFC," Evans said.

Small Business and General Business Tax Break ($141 million): The Rudd Government has listened to the ARA's calls to extend the original deadline (30 June 09) to 31 December 09. As well as this the bonus tax deduction has increased from 30 to 50 percent of the cost of eligible assets. This is a direct incentive for smaller retailers (turnover of less than $2 million) to inject much needed investment in their business.

Small Business Support Line ($10 million): This initiative will provide a lifeline for many small businesses who are financially distressed and struggling to survive during the GFC and will provide advice through a nationwide network of small business advisory services around Australia.The ARA is beginning to work with Business Enterprise Centres and local governments around the country and we are very supportive of this initiative to assist retailers seeking advice and support.

Small Business Online ($10 million): Online retailing is a huge growth industry and the ARA supports this opportunity for small business to operate online, reduce costs and improve marketing and customer reach.

PAYG Cash Flow Relief ($720 million) - The Budget reduces the GDP adjustment factor for calculating quarterly instalments from around 9 percent to 2 percent. This will free up much needed cash flow for over one million small businesses who pay quarterly PAYG instalments.

"These initiatives coupled with the Rudd Government's stimulus packages, which are beginning to flow from consumers pocket's through to retailers, leave retailers optimistic the Rudd Government is listening to their concerns and supporting small business.

"Retailers are also pleased the Federal Budget has increased the pension and kept the legislated tax cuts for 09 / 10 putting cash back into consumers hands from 1 July, stimulating spend and allowing much needed funds to flow from the retail hub through supply channels.

"The ARA will be on the front foot supporting these initiatives and educating retailers across Australia about small business support services and incentives to invest in their business," Evans said.

For over 105 years, the Australian Retailers Association (ARA) has been the peak industry body in Australia's $292 billion retail sector which employs over 1.5 million people. As an incorporated employer body under the Workplace Relations Act and with a range of member services including business consulting, policy development, advocacy and education, the ARA promotes and protects over 5000 independent and national retailers throughout Australia. Visit www.retail.org.au or call 1300 368 041.

Contours Bella Vista has become the first Contours studio in Australia to recruit a male member.   Traditionally known as the ‘Gym without Jims,’ the all female studio at Contours Bella Vista decided it was time to add a little testosterone to their workout.

The award-winning Contours 29 minute workout uses weight bearing equipment specifically designed for women, providing both positive and negative resistance. This ensures a far superior workout to hydraulic equipment often used by other women’s fitness studios, but more importantly it provides quick and sustainable results.

Click here to learn more about how you can join the Contours team

Franchising showing strong growth in first months of 2009

Delegates at the recent FCA’s QLD State Conference, were told about strong growth in QLD based national franchises.

Delivering a keynote address, PoolWerx CEO John O’Brien reported that sales and profitability for his business were up in the first 4 months of 2009, with sales growth of 19% compared to the last 4 months of 08. O’Brien also delivered a challenging presentation exhorting all franchise systems to look deliberately and creatively at how to entrench and facilitate growth capability in their systems so as to capitalise on the opportunity being presented by the current economic circumstances and those when the economy returns to stronger growth.

Prominent pizza brand Eagle Boys has had double digit growth year on year. Murray Stewart, General Manager – Corporate at Eagle Boys indicated at the QLD Conference that they plan to open 16 new stores nationally in the next 6 weeks and 50 in the course of the rest of the year. “This will take us to about 280 stores by year’s end,” Mr Stewart said.

At the FCA’s South Australian State Conference on May 1st, Chris Malcolm CEO of Clark Rubber told delegates that having anticipated the downturn, they took the steps necessary to tighten operations, took risks at the management level and was pleased to report that they had a record December and that their first quarter 09 had well out stripped sales and profitability from the previous period (08).

“These strong results, and history during prior downturns, show us that franchise systems typically respond more quickly and effectively to changed market conditions, as the dual dynamic of having franchisor and franchisees close to the market and focused on meeting changed consumer expectations produces a synergistic response,” Executive Director of the FCA Steve Wright said. 

"They are also in stark contrast to some recent public claims linking economic and industry issues to the franchising model. The financial troubles of the Kleenmaid organisation, caused essentially by manufacturing costs and reduced demand in the wake of the global economic crisis, had been seized upon by some to try to claim weakness in the franchising model in times of economic downturn. The results that many systems are currently reporting show this to be a weak and superficial analysis”.

“No one takes any joy from a corporate collapse such as has occurred in relation to Kleenmaid.  However it should be noted that in the case of Kleenmaid the big losers seem likely to be consumers, unsecured creditors and possibly employees.

Some franchisees are out of pocket for commissions owed to them by Kleenmaid, for sale of Kleenmaid products and for servicing work done under warranty contract. There has been no suggestion of any fundamental disagreement, conflict or dispute between Kleenmaid and its franchisees other than its unpaid commission and servicing payments issues, which has the effect of including some franchisees in the list of Kleenmaid unsecured creditors.” 

While this is a bitter pill for the franchisees in question, the quantum of these exposures is a fraction of the total owing to their unsecured creditors. The administration is doing its best to recover these funds, and we hope they are successful in this but we can only wait and see on that issue. The administrator has indicated that the 35 franchisees who have service contracts are still able to run those businesses, independently billing customers.

The Franchise Council of Australia Limited (FCA) is the peak body for the $130 billion franchise

sector in Australia, representing franchisors, franchisees and service providers to the sector.

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Franchise and Business Opportunities

750+ Franchise and Business Locations For Sale & Available Now

>Click here to view all available opportunities

"There are some predictable factors that can lead to a surge in franchise sales activity -- and many of them are pointing to a franchise boom on the horizon" *

With prospective franchisees looking for information

about franchise and small business opportunities ,

NOW is the time to get your advertising organized.

WE NOW ADVERTISE FRANCHISES AND

SMALL BUSINESS OPPORTUNITIES!

30% of new franchisees

recruited online

Results from the 2008 Franchisor Expansion Study by 10 Thousand Feet into the Australian franchising industry reports the following: 

• Just 10 per cent of Australian franchisors reported negative growth in 2008

• Despite this, the $40 million plus franchisors spend on marketing each year to attract new franchisees will be significantly cut in 2009

• Newspaper ad revenues will be one of the areas to suffer most, with just 11 per cent of new franchise leads generated through this medium in 2008 – down from 18 per cent in 2007.

Click here to contact us for information on how

we can help you with your online advertising

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FRANCHISES THAT THINK OUTSIDE OF THE BOX

Pizza Franchise + Convenience Store Success

Franchises are increasingly looking to expand their bottom line by incorporating other businesses within their own.

NightOwl Mackay (Victoria Street) recently expanded their successful convenience retail business by opening an Eagle Boys Express store to provide customers with quality pizza on the go.

The Express Store is an Eagle Boys initiative that can operate in a space as small as six square metres.  It makes use of new technology allowing pizzas to be prepared in-store in a third of the time as traditional pizzas.

Since opening an Eagle Boys Express Store in December 2008, NightOwl Mackay now sells up to 800 pizzas a week to hungry customers.

Click here to request more information about

Eagle Boys Pizza

Click here to let us know about a franchise which is doing things a little differently to

increase its bottom line

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For sale, or not for sale: that is the question ...

A major household goods chain has denied that it is in talks with rival companies about a possible sale of its business after a fall of more than 15% in operating results this year.

Click here for more about this story

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Workplace Ombudsman Report

Inspectors from the Federal Workplace Ombudsman's Bunbury office have recovered $260,000 in back-pay for 280 workers at 105 businesses during the past 12 months. 

Click here for more about this story

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Kleenmaid

The Administrators of Kleenmaid are optimistic that they may be able to sell the repairs and spare parts operations of the business.

A second creditors' meeting will be held on May 25 at a venue to be decided.

Click here for more about this story

NEW CLASSIFIEDS SECTION

COMING SOON!

We are adding a Franchise for Sale column to our weekly e-newsletter, so if you have a location for sale that you would like our readers to know about

Click here to get in touch with us for

all of the details for listing *`

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Thank you for Fire Heroes

Local firemen hopped aboard their Country Fire Authority tanker and a pumper truck used in talking the recent Victorian bushfires to accept Cold Rock Ice Creamery’s invitation to visit the Cranbourne store as a thank you gesture by Cold Rock on behalf of their community.

Cold Rock Ice Creamery, raised $35,000 for the Bushfire Appeal from franchisees and staff contributions at eight of its Victorian stores.

Click here to request more information about

Cold Rock Ice Creamery

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Scam Watch

Consumers are being warned about a sneaky new scam which is stealing bank account details right from your desktop!

Click here for more about this story and how to avoid being trapped

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Police seek witnesses

Detectives are appealing to the public for information about the armed robbery of a takeaway pizza outlet in Shellharbour, south of Wollongong, on Sunday night.

Click here for more about this story

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Things that make you go EWWW !!!

A man regretted changing his side order from fries to vegetables after finding something icky lurking in his broccoli.

Click here for more about this story,

which includes a truly bizarre image

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Date claimer: 

Please mark 16 October 2009 in your diary for the “Coffee Club, Journey to The Wild, Charity Ball”

more information to follow ...

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WHERE IN THE WORLD?

Inside Franchising goes global ...

Did you know that Inside Franchising newsletter subscribers reside not only here in Australia, but also in countries around the globe including New Zealand, France, India, Malaysia, Italy, Greece, China, South Africa, UK, USA and more? 

If you are reading our newsletter in another part of the world then please let us know so that we can include your country in our list !

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*The content of all news items published in this newsletter are published in good faith and are reproduced from information provided by the individual companies or their agents, the subject of said news items. News items from other publications are linked to original source. Inside Franchising Pty Ltd takes no responsibility whatsoever for information and content being true and correct. Inside Franchising does not endorse specific franchises. See our disclaimer for full information.

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newsletter edition 145 first published 14.5.09