Multi-award win­ners An­thony Stahl and Daniel Me­siti have been Boost Juice fran­chises for 15 years and now op­er­ate five stores in Sydney and one Tommy Guns Bar­ber­shop out­let.

Inside Franchise Business - - Contents - AN­THONY STAHL AND DANIEL ME­SITI Multi unit fran­chisees, Boost Juice

Fran­chisees share se­crets to lo­ca­tion suc­cess.

The lo­ca­tion of your busi­ness is crit­i­cal and will greatly de­ter­mine the suc­cess or fail­ure of your busi­ness, so you must be dili­gent spend­ing time re­search­ing your lo­ca­tion. Con­sider the fol­low­ing fac­tors.

DE­MO­GRAPH­ICS What are the de­mo­graph­ics and so­cio-eco­nomic in­flu­ences in the area? Is your busi­ness suited to the type of cus­tomer in the area; are they your tar­get mar­ket and would they pur­chase from your busi­ness? Our Boost Juice Bar at Manly high­lighted this as we ex­pected Manly to be a lo­ca­tion that com­ple­mented the brand – but as it turned out, the de­mo­graph­ics of the area proved the store was not vi­able.

TYPE OF TRAF­FIC FLOW Is your busi­ness a des­ti­na­tion (like Bun­nings) or does it need to be in the flow of traf­fic where con­ve­nience is im­por­tant? Also, be care­ful when as­sess­ing traf­fic flow. Lo­ca­tions near trans­port hubs can be mis­lead­ing as there may ap­pear to be lots of peo­ple pass­ing your lo­ca­tion, but will they ac­tu­ally stop? Also con­sider how the weather will af­fect this. Rain usu­ally drives peo­ple in­doors. Does the site do bet­ter on week­ends or week­days and how does this af­fect your busi­ness?

WEATHER EX­PO­SURE Is your busi­ness sea­sonal? If your busi­ness is busier in sum­mer (like Boost,) are the cus­tomers around dur­ing that time or does the area va­cate dur­ing the hol­i­days (like some CBD sites)? We thought our first Boost Juice Bar was a cracker of a site but the area va­cated for six weeks over Christ­mas and sum­mer when we were ready to pump.

COM­MER­CIALS Ne­go­ti­ate well. Your oc­cu­pancy costs go one way only (and that’s up) so be com­fort­able with the de­tails of your lease and know how much it will be in five years and the im­pact this will have on your prof­itabil­ity. Gen­eral lease terms are five to seven years. Gen­er­ally speak­ing your oc­cu­pancy costs should not ex­ceed 8–14 per cent of your turnover (though this is very de­pen­dent on in­dus­try), so do your home­work and en­sure the promo levies, out­go­ings, air­con­di­tion­ing, taxes and du­ties, and land tax are all in­cluded in your cal­cu­la­tions. Also, is a fitout con­tri­bu­tion in­cluded? Some shop­ping cen­tres will of­fer a sub­stan­tial con­tri­bu­tion to your fitout costs and things like Cat­e­gory 1 works can be­come ex­pen­sive very quickly. Cat­e­gory 1 works will in­clude things like core drilling, range hoods, grease traps and air­con­di­tion­ing duct­ing.

COM­PE­TI­TION Where are your com­peti­tors and what sites have they cho­sen? Is there an ad­van­tage their sites have over yours in terms of their lo­ca­tion and traf­fic flow? Your com­pe­ti­tion can be a good yard­stick for how your busi­ness might per­form. Will the area be able to sus­tain the same prod­uct or ser­vice that you are of­fer­ing?

AD­JA­CENT BUSI­NESSES Of­ten, hav­ing com­ple­men­tary busi­nesses in your area can help drive your de­mo­graphic into your store. Also con­sider what precinct your site is in. Is it the fash­ion, food or ser­vice precinct for ex­am­ple?

An­other fac­tor may be sea­sonal or re­cur­ring ac­tiv­i­ties the lo­cal coun­cil or cen­tres put on such as food mar­kets. These will have an im­pact on your trade if pop-up stores ap­pear every week of­fer­ing sim­i­lar prod­ucts. STORE PRE­SEN­TA­TION AND LAY­OUT

COM­PE­TI­TION Will the space al­low you to con­fig­ure your store the way you want it? What are your size and stor­age re­quire­ments? Do you need a large shopfront to show­case your prod­uct, or can a smaller shopfront work?

FI­NAL THOUGHTS Ne­go­ti­at­ing a lease is one of the hard­est things a fran­chisee will have to do. It can be­come a very emo­tional ex­pe­ri­ence, so work hard at main­tain­ing ob­jec­tiv­ity. Try to con­sider both sides of the ne­go­ti­a­tion. Com­pe­ti­tion for the site will im­pact your abil­ity to ne­go­ti­ate and this is just as im­por­tant at the lease re­newal. It is not un­com­mon to en­gage pro­fes­sion­als within fran­chis­ing to help ne­go­ti­ate but this doesn’t negate the need for you to be very in­formed and con­struc­tively in­volved in the process. You will bear the out­comes.

Daniel Me­siti and An­thony Stahl

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