CLEAR LINE OF SIGHT

Fran­chis­ing of­fers sup­port, ex­pe­ri­ence and es­tab­lished brand­ing for op­tometrists, but know your op­tions and com­pare agree­ments first.

Inside Franchise Business - - Contents - By Do­mini Stu­art

Op­tions for own­ing an op­tometrist fran­chise.

Op­tometrists are highly skilled and highly qual­i­fied – but that doesn’t nec­es­sar­ily mean they’re good at run­ning a busi­ness.

“Op­er­at­ing a prac­tice re­quires skills that ex­tend be­yond the ca­pa­bil­i­ties of your pro­fes­sional train­ing, into the ar­eas of mar­ket­ing, ac­count­ing, shop fitouts and ren­o­va­tions, pur­chas­ing equip­ment and day-to-day knowl­edge of busi­ness op­er­a­tions,” says Peter Gan­dolfo, manag­ing part­ner at Melbourne law firm Part­ners Le­gal. “If you pur­chase a fran­chise, much of this can be taken care of by the fran­chisor.”

The power of the brand may also be over­looked.

“In many cases, the fran­chisor will have spent a great deal of money es­tab­lish­ing and build­ing the rep­u­ta­tion of the brand,” he says. “Peo­ple are at­tracted to this rep­u­ta­tion and this, in turn, can drive busi­ness for you.”

Spec­savers is a no­table ex­am­ple. Clever con­sumer ad­ver­tis­ing and the mem­o­rable “Should have gone to Spec­savers” tagline have helped es­tab­lish the com­pany as a lead­ing in­ter­na­tional brand. Since launch­ing in the UK in 1984 the or­gan­i­sa­tion has be­come one of the world’s largest op­ti­cal re­tail­ers with more than 1800 stores in 10 coun­tries. Spec­savers also has an op­ti­cal man­u­fac­tur­ing fa­cil­ity in Port Melbourne, which is the largest in the south­ern hemi­sphere.

“We en­tered the Aus­tralian mar­ket 10 years ago, in Fe­bru­ary 2008,” says Charles Hornor, di­rec­tor of com­mu­ni­ca­tions. “This was fol­lowed by one of the fastest roll­out pro­grams ever seen in this coun­try – we opened 100 Spec­savers stores in our first 100 days and a to­tal of 155 in our first 12 months. We now have 325 Aus­tralian stores with an­nual sales of $950 mil­lion last year and av­er­age store sales of al­most $3 mil­lion. We also have 52 stores in New Zealand.”

Spec­savers de­vel­oped the Aus­tralian busi­ness model from the ground up us­ing the UK part­ner­ship strat­egy as a foun­da­tion.

“Aus­tralians were quick to em­brace our mix of clin­i­cal ex­cel­lence, high-qual­ity prod­ucts and un­ri­valled price points,” says Hornor.

THE CON­FI­DENCE TO RUN A BUSI­NESS

The Aus­tralian-owned, op­tometrist-led EyeQ Fran­chise As­so­ciate Net­work is a more re­cent en­trant in the sec­tor with a launch date of Septem­ber 2014. EyeQ cur­rently has 25 prac­tices in the group – 15 cor­po­rate and 10 owned by fran­chisees, who are known as fran­chise as­so­ciates.

“We worked on de­vel­op­ing this net­work con­cept over a num­ber of years,” says Ray Fortes­cue, EyeQ’s ex­ec­u­tive chair­man and a found­ing di­rec­tor. As an op­tometrist with over 35 years’ ex­pe­ri­ence in a Sydney prac­tice, he is com­mit­ted to the long-term sus­tain­abil­ity and ideals of in­de­pen­dent op­tom­e­try.

“We had ob­served that many Gen­er­a­tion X, Y and Next op­tometrists weren’t con­fi­dent enough with the ex­ist­ing busi­ness sup­port op­tions to start a new prac­tice on their own, or even to take over an ex­ist­ing in­de­pen­dent prac­tice,” he says. “We wanted to cre­ate sys­tems and strate­gies that would pro­vide a way for in­de­pen­dent, full-scope op­tom­e­try prac­tices to suc­ceed in Aus­tralia’s highly com­pet­i­tive op­ti­cal re­tail en­vi­ron­ment. We also wanted them to suc­ceed on a per­sonal

level, with pro­fes­sional sat­is­fac­tion and a good work–life bal­ance.”

A CHANG­ING AUS­TRALIAN MAR­KET

Both EyeQ and Spec­savers are op­er­at­ing in an area that has grown con­sid­er­ably over the past 10 years.

“We ex­pect that growth to con­tinue,” says Hornor. “In 2007 the Aus­tralian pre­scrip­tion op­tics mar­ket was ap­proach­ing $800 mil­lion and this year pre­dic­tions are as high as $3 bil­lion.”

The decade has also seen sig­nif­i­cant change in the mar­ket­place.

“A num­ber of new en­trants have in­creased com­pe­ti­tion and we’ve had to face the same chal­lenges as every other re­tail busi­ness, such as on­line sell­ing,” says Fortes­cue. “How­ever, one of the key in­gre­di­ents in the suc­cess of an op­to­met­ric prac­tice is the re­la­tion­ship that de­vel­ops be­tween the op­tometrist, pa­tients, em­ploy­ees, sup­pli­ers and other stake­hold­ers. At EyeQ we are con­stantly as­sess­ing the tools, sup­port and re­sources we pro­vide to en­sure our fran­chise as­so­ciates have ev­ery­thing they need to de­liver the best re­la­tion­ship op­tom­e­try pos­si­ble.”

SPEC­SAVERS’ JOINT VEN­TURE PART­NER­SHIPS

Each Spec­savers busi­ness op­er­ates as a joint ven­ture part­ner­ship, which means that every store is jointly owned by an op­tometrist and an op­ti­cal dis­pens­ing re­tailer.

Cost of en­try is a $10,000 work­ing cap­i­tal loan, which is re­payable as soon as the store part­ners have built up a cash buf­fer in the busi­ness. The com­pany also funds the set-up costs through a busi­ness loan.

“All of our new stores are funded by Spec­savers with Spec­savers act­ing as bank to the part­ner­ship team,” says Hornor.

Store part­ners are then sup­ported by cen­tralised teams of spe­cial­ists in ar­eas such as mar­ket­ing, ac­count­ing, IT and sup­ply chain.

“The op­tometrist part­ner man­ages the clin­i­cal side of the busi­ness and is re­spon­si­ble for de­vel­op­ing the op­tom­e­try team,” says Hornor. “The dis­pens­ing part­ner man­ages the re­tail and dis­pens­ing side of the store and is also re­spon­si­ble for manag­ing and de­vel­op­ing the floor team. This al­lows the two part­ners to fo­cus on the whole cus­tomer jour­ney and drive their busi­ness for­ward – and it’s our stan­dard recipe for fran­chise suc­cess.”

All Spec­savers op­tometrists are pri­mary care health pro­fes­sion­als with qual­i­fi­ca­tions in pro­fes­sional op­tom­e­try that take up to seven years to ac­quire.

“Op­tom­e­try is strongly reg­u­lated by the Aus­tralian Health Prac­ti­tion­ers Reg­u­la­tion Agency (AHPRA) but op­ti­cal dis­pens­ing is un­reg­u­lated in Aus­tralia,” Hornor says. “De­spite this, the vast ma­jor­ity of Spec­savers op­ti­cal dis­pensers are qual­i­fied to Cer­tifi­cate IV level. We have put more than 1000 in­di­vid­u­als through that course since 2013.”

Spec­savers also sup­ports am­bi­tious op­tometrists and op­ti­cal dis­pensers with an in­ter­nal de­vel­op­ment pro­gram called Path­way. This pre­pares them to qual­ify for and then run their own Spec­savers busi­ness.

“It’s a tai­lor-made six-month train­ing and de­vel­op­ment pack­age that helps them to de­velop the com­mer­cial and peo­ple skills they need to make their busi­ness a suc­cess,” Hornor says.

A RE­LA­TION­SHIP-DRIVEN BUSI­NESS MODEL FOR EYEQ

All of the founders of EyeQ are suc­cess­ful, in­de­pen­dent op­tometrists and prac­tice own­ers.

“That means we can pro­vide fran­chisees

with both busi­ness and sec­tor ex­per­tise,” says op­tometrist and chief busi­ness de­vel­op­ment of­fi­cer Lily We­grzynowski. “We are ded­i­cated to de­liv­er­ing the busi­ness sup­port, sys­tems, buy­ing power, mar­ket­ing ini­tia­tives and col­le­gial­ity that will en­able both op­tometrists and op­ti­cal dis­pensers to own and op­er­ate their own prac­tice.

Our re­la­tion­ship-driven busi­ness model is unique in the op­to­met­ric fran­chise space be­cause our fran­chise as­so­ciates con­tinue to own their busi­ness out­right. We also of­fer a rel­a­tively low-cost en­try com­pared with other fran­chise op­tions in the op­ti­cal in­dus­try.”

For new prac­tices, EyeQ helps with site se­lec­tion, lease ne­go­ti­a­tions and prac­tice fitout.

“Nat­u­rally, we want our prac­tices to be ap­peal­ing to pa­tients but it’s im­por­tant that our fran­chise as­so­ciates find them a plea­sure to work in too,” We­grzynowski adds. “They must also stand the test of time.”

Fran­chise as­so­ciates have the op­tion of us­ing EyeQ per­son­nel man­age­ment, ad­min­is­tra­tion sup­port, fi­nan­cial man­age­ment, IT ser­vices and suc­ces­sion plan­ning.

“Our aim is to en­sure our fran­chise as­so­ciates have the time they need to fo­cus on pro­vid­ing high qual­ity, re­la­tion­ship-fo­cused clin­i­cal eye care and eye­wear so­lu­tions,” says We­grzynowski. “We can take care of pay­roll, ac­counts payable, mar­ket­ing, stock ac­qui­si­tion, busi­ness man­age­ment, per­for­mance bench­mark­ing, IT and em­ployee train­ing. But the sys­tem is flex­i­ble enough for them to man­age some of these func­tions them­selves if they have the re­sources and it’s some­thing they en­joy.”

The EyeQ lead­er­ship team has found that suc­ces­sion plan­ning and the op­por­tu­nity for op­tometrists to re­tain their clin­i­cal in­de­pen­dence have proved par­tic­u­larly ap­peal­ing.

“Many op­tometrists de­cided on their pro­fes­sion be­cause they have a pas­sion for help­ing and tak­ing care of peo­ple,” says Fortes­cue. “At EyeQ we un­der­stand how im­por­tant it is for them to feel con­fi­dent this legacy of trust will be passed on to fu­ture gen­er­a­tions. That’s why we see suc­ces­sion plan­ning as a key com­po­nent of our fran­chise as­so­ciate of­fer.”

FRAN­CHISEES’ RE­SPON­SI­BIL­I­TIES

As with any fran­chise, the ben­e­fits come with re­spon­si­bil­i­ties.

“Fran­chisees have obli­ga­tions to the fran­chisor, and these are set out in the fran­chise agree­ment, in­for­ma­tion and dis­clo­sure state­ments and the Fran­chis­ing Code of Con­duct,” says Gan­dolfo. “The fran­chise agree­ment in par­tic­u­lar will of­ten dic­tate the man­ner in which you run your busi­ness, and this can be both ben­e­fi­cial and a bur­den.

“On the one hand, if you’re not an ex­pe­ri­enced busi­ness op­er­a­tor or don’t want to be as in­volved in the run­ning of the busi­ness, much of the op­er­a­tion of the busi­ness is done for you. Your fran­chise agree­ment will tell you what fitouts are needed for your store, where to pur­chase your goods, what equip­ment to buy and, in some cases, even the staff to hire. It may also pro­vide you with pro-forma em­ploy­ment agree­ments and mar­ket­ing ma­te­ri­als. On the other hand, you may iden­tify a weak­ness in the pre­scribed sys­tems, or you may find the fran­chisor’s di­rec­tions do not suit the spe­cific needs of your client base. If you do find you want the make changes they can be dif­fi­cult and costly to ne­go­ti­ate.”

He adds that the most im­por­tant thing to do when you’re con­sid­er­ing tak­ing on a fran­chise is to ex­am­ine your op­tions care­fully.

“Take the time to com­pare and con­trast dif­fer­ent fran­chise agree­ments,” he says. “And you should al­ways have a lawyer look over the doc­u­ments on your be­half be­fore you en­ter into an agree­ment of any kind.”

Spec­savers

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