CLEAR LINE OF SIGHT
Franchising offers support, experience and established branding for optometrists, but know your options and compare agreements first.
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.”
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.”