ISB: How did you first get involved in the food business?

JD: Starting in food was a bit of a detour! We initially got into managing student accommodations and helping international students settle in Australia. One part of this involved running an in-house kitchen to keep everyone well-fed. We dived in – learning heaps from the previous owners and plenty of on-the-job training. It was hands-on, a bit hectic, and we loved every minute. Now, here we are, serving up meals with the same passion we started with!

ISB: What motivated you to transition from running a canteen to running a business of ready meals?

JD: The idea came from a simple observation: we saw student accommodations with no in-house meal services, and thought, “Why not offer ready meals in vending machines?” It was a convenient solution for residents – and even staff pulling night shifts at reception. What started as a natural extension of our work soon rippled beyond students; we now serve meals at top-tier companies across industries, from manufacturing to distribution. I’d love to say we planned it all, but really, one opportunity led to another, and here we are.

ISB: How and why did you decide to join Provender as a franchisee?

JD: Provender also brings a dedicated marketing team to the table, which allows us to take on national contracts as a group – a huge advantage. We truly operate as a team, partnering together to grow the business. The combination of their cutting-edge tech support and strong national presence has enabled us to scale efficiently while building something solid.

ISB: How has your partnership with Provender facilitated the growth of your own venture?

JD: Working with Provender has opened doors we hadn’t imagined. As our vending clientele grew, Provender guided us into the micro-market space – a field they’ve spent years perfecting. This shift into fresh food was ideal, giving our ready-made meal business the exposure it needed, though we quickly realized vending success didn’t guarantee a smooth transition. There were plenty of bumps, and we had to learn the nuances of managing micro-markets effectively. With Provender’s support, we’ve expanded naturally, meeting the rising demand for fresh, convenient meal solutions across new sites.

ISB: How do you foresee not only your business’ growth but also your relationship with Provender in the next couple of years?

JD: Over the next few years, we’re focusing on fine-tuning operations, scaling production, and building a team that shares our vision. With Provender, we’re ready to tackle new opportunities in vending and micro-markets. Increasingly, workplaces want benefits that support employee wellbeing, and fresh, convenient meal options are part of that shift. As we expand, these offerings help promote a more holistic workplace experience and encourage people back into the office. With Provender’s tech innovations, we’re excited to keep growing and serving evolving workplace needs together.

ISB: What is the most important lesson that you can impart to someone who is looking to be a franchisee?

JD: Find a franchiser whose values truly align with yours. In franchising, having partners who share your vision and genuinely support your growth makes all the difference. Also, trust yourself to take those calculated leaps – when we saw the chance to introduce ready-made meals in vending, it felt like the perfect fit for our skills and passions, so we went for it. With the right alignment and timing, growth becomes an exciting journey, not just a goal.

The post Q&A: How Spoonful Kitchen grew by becoming part of a franchise appeared first on Inside Small Business.

Black’s approach involves a flat structure in franchising, which he refers to as “flat franchising”. Since its launch in 2017, Success Tutoring‘s franchise network has grown to 35 centres located throughout the country and has a launch schedule to open a further 80 centres nationally before the end of 2026.

“For many who join traditional franchise groups, what they find is that once they become a franchisee, they then have to report to a franchisor known as a regional manager, a divisional franchisor, who owns the entire division, and then a franchise group CEO. They end up working in the same multi-level manager environment that they opted to get away from when leaving traditional employment. This is an old style of franchising. Gen Zs and millennials want more control over their own life and many don’t want to work for a boss,” Black explained.

Black added that the flat franchising model that he espouses is empowering every franchisee to operate as their own boss.

“They do not report to a regional or divisional franchisor. They are supported by our head office which lives to assist them to succeed in their business,” he expounded.

Black also emphasised that the flat franchising approach has helped attract many people to his franchise group, especially millennials who want to combine their love of education with business and enjoy the flexibility that comes with it. The business also developed systems, tools, resources, and other support mechanisms to ensure that it is capable of scaling as the number of Success Tutoring centres increase while maintaining the currentness of materials and delivering fast and high-quality support to franchisees.

“We want franchisees who are going to grow with us. Millennials find our model very attractive. They respect and value their own agency as an entrepreneur and they want to be more in control of their own life and career,” he said.

Black added that he is focused on building Success Tutoring differently. He said, “We are a franchise model but we are very different to other franchise groups. Most people who choose to start a business whether it be by themselves or within a franchise system, are usually very entrepreneurial and want to be their own boss.”

The post Flat franchising model key to Success Tutoring’s success appeared first on Inside Small Business.

It is first time the Fair Work Ombudsman is pursuing legal action against a franchisor for such liability. The Fair Work Ombudsman alleges that 85 Degrees was liable as a “responsible franchisor entity” under the Fair Work Act for alleged non-compliance by eight 85°C Daily Café franchisee-operated outlets in Sydney in 2019.

The FWO stated that while 85 Degrees did not directly underpay nine workers a total of $32,321, it is legally liable for the alleged underpayment contraventions because it should reasonably have known its franchisees would underpay the workers or commit similar contraventions.

The FWO also stated that 85 Degrees is also legally liable for record-keeping and payslip contraventions committed by the said franchisees which affected 20 workers (including the nine allegedly underpaid) who worked as cashiers, bakers, and kitchenhands, some being young workers and visa holders.

The nine underpaid workers were underpaid minimum rates; overtime entitlements; penalty rates for weekend, public holiday and evening work; casual loadings; and a laundry allowance under the General Retail Award 2010; and annual leave entitlements under the National Employment Standards, between 1 January and 31 December 2019. Individual underpayments range from $239 to $15,198.

Fair Work Ombudsman Sandra Parker said the litigation highlighted that franchisors could be held accountable if they did not take action to prevent breaches in their networks.

“Under federal law, where franchisors operating in Australia do not take reasonable steps to prevent contraventions by their franchise outlets, we will act,” Parker said. “In this case, we allege 85 Degrees – who had been on notice for many years about compliance issues – should reasonably have known some of its franchisees would underpay their workers and breach record-keeping and payslip requirements.”

This legal action follows 85 Degrees being penalised $475,200 in court last year for exploiting young Taiwanese students in Sydney under the guise of a purported internship arrangement in 2016 and 2017. That case related to 85 Degrees’ direct employees who worked at factories and cafes operated by 85 Degrees in Sydney.

The FWO discovered the latest alleged underpayments and payslip and record-keeping breaches when it conducted proactive audits.

The FWO also stated that pay frequency laws were breached and that one worker was not paid a penalty rate payable when workers do not receive an adequate break between shifts. The record-keeping contraventions include an allegation that time records were falsified.

The individual franchisees back-paid the workers in full as a result of the FWO’s proactive audit and the Fair Work Ombudsman has not taken court action against the franchisees. Franchisor 85 Degrees Coffee Australia Pty Ltd on the other hand faces penalties of up to $63,000 per contravention.

The first directions hearing in the Federal Court in Sydney is yet to be scheduled.

The post Franchisor 85 Degrees to face court over alleged Fair Work violations appeared first on Inside Small Business.

The September Quarter 2022 Franchise Business Pulse Check survey reveals that the availability of suitable employees has been the most daunting challenge for 83 per cent of small businesses. It is also notable increase from the 80 per cent that was recorded in the July survey, and 64 per cent in March.

Availability of suitable employees for support offices (55 per cent) was again the second largest issue for small businesses, followed by supply chain issues (45 per cent) and rising interest rates and the inflationary pressures. (39 per cent) However, it is noted that fewer small businesses nominated these challenges compared to the July survey – which highlighted the sector’s focus on employment concerns.

Despite these challenges, small business sentiment about the next six months is improving, with 67 per cent feeling optimistic (up from 57 per cent in July), 19 per cent neutral, and only 14 per cent pessimistic.

Year-on-year quarterly trading continues to recover, with 47 per cent of small businesses reporting an increase in their September 2022 quarter income compared to September 2021 of more than 10 per cent.

“Small businesses are the engine of the Australian economy. When they proposer, our country prospers,” FCA CEO Mary Aldred said. “The situation for small businesses across Australia in regards to staff shortages is worsening. We need urgent action at the national level to address this challenge.

“According to ABS data, 698,000 fewer people arrived in Australia in September 2022 compared to September 2019 – a reduction of 39 per cent,” Aldred added. “It is not enough for the Australian border to be open, specific actions to increase the domestic participation rate and the attractiveness of Australia as a destination for international labour are needed.”

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How do weekly sales numbers compare with pre-COVID figures?

With all the uncertainty of the last couple of years, it is little surprise that “resilience” is now high on the checklist for many prospective franchisees.

There is no substitute for reviewing and testing financial information, especially with the help of your professional advisor. However, there are a few basic questions that can be asked of existing franchisees early in the process to gain some valuable insights.

Ask them how their weekly sales numbers had held up in the last two years compared to pre-COVID levels. It is also worth asking them how the business was tracking in the couple of years before COVID. Some businesses were marginal heading into the pandemic and may have only survived due to the range of assistance programs and packages on offer. Questions around franchisor support, customer behaviour, the impact of competitors and the effectiveness of marketing campaigns may provide additional insights.

The next step would be to probe what their recent experience had been with key expenses in the business (stock purchases, wages and rent etc). Even more importantly try to get to find out what they think is causing those changes. For example, challenges in getting stock in a timely manner, difficulties recruiting or retaining staff and issues with landlords.

In isolation these answers don’t reveal much, but when consistent themes emerge the picture may become very clear very quickly.

Weekly sales number insights from Darryn McAuliffe, CEO, FRANdata Australia. Darryn has 30+ years in business banking, risk management and franchising. FRANdata researches, reports and rates franchise systems.

Check necessary licenses, permits and debt commitments

Franchisees should ensure their franchise lawyer reviews the franchise documents, The lawyer should highlight any red flags regarding the franchisor’s financial performance over the prior two years. It is also important to closely look at the recent history of franchisees who have left. These details do tell a story about the health or otherwise of the franchise system.

A brand new business is of course a higher risk than an existing business that has a track record. For an existing business, consider the following points:

If there is a lease review the lease terms and rent review provisions. Did the landlord provide any rent relief in the lockdown periods? When is the next market review due? There is a risk the rent may increase at that point and significantly impact on your profit.

Ensure that all the assets of the business you are acquiring are clear of debt. Your lawyer can do a PPSR (Personal Property Securities Register) search to make sure there are no security interest registered over the business assets

Check all of the necessary licenses and permits for the business and any supplier agreements are current. Check that the terms are commercial.

Buying any business carries risk but you can reduce that risk by getting specialist legal and financial advice before you commit. 

Licence, permit and debt commitment insights from Robert Toth, Special Counsel. Robert is an accredited commercial law and franchise specialist named as a leading franchise lawyer in Australia by Who’s Who Legal 2021.

This story first appeared on our sister publication Inside Franchise Business

The post What are the signs of resilience in a franchise? appeared first on Inside Small Business.

Buying a franchise doesn’t have to mean making a full-time commitment as these days there are many franchises that can be run on a part-time basis or suit (and financially stack up) to a model that employs staff to manage and run it.

Here are five things to think about if you’re looking at franchises as a side hustle:

1. Find the right type of franchise. Some franchises suit the nature of the side hustle better than others. Is the franchise quite passive to run? Does it suit a semi-absentee arrangement? Are there only a few set hours each day where you need to be actively ‘on’, like a franchise that offers classes after school hours? Can you do most of the hours outside of the traditional 9 to 5 timeframe? Alternatively, is it the kind of business that will work well with a manager and staff in place? You’re looking for a franchise that requires lower time commitment during business hours, can operate with limited supervision, is not too risky to delegate to hired people and/or can generally be managed part-time. If you already have a position or business that takes up most of the 40-hour work week, you need something that fits around that and won’t add an average of more than 2-3 hours per day (or whatever you’re comfortable with) on top of that workload.
2. Think outside the square. The beauty of the franchise model is that it provides a proven model of success and doesn’t require the owner to build a brand from scratch (which can be very overwhelming and risky when you’re already committed to another job or business). You also don’t necessarily need to have worked in that industry before because you have the backing and the training from the franchisor. All of this means that you can think outside the square when considering your side hustle options and it can enable you to pursue an untapped passion or explore an industry that takes your interest. Finding a franchise that’s interesting to you will make your side business more appealing and make it easier to remain engaged with its operations even while you’re working your main job.
3. Crunch the numbers. When starting a franchise as a side hustle business, it’s very important to set a realistic income expectation and do the sums to ensure the opportunity is the right one. You need to ensure the earning potential is what you’d expect for the hours you’re going to have to personally invest in it. Some franchises also require more upfront investment than others, so be clear on your budget from the outset.
4. Could you partner up? One way to make a franchise endeavour more attractive as a side hustle could be to partner up to buy one. You could invest as a silent partner or split the responsibilities with one or more investors, reducing the day-to-day time commitments required.
5. Speak to someone who’s already doing it. A reputable franchisor should always be able to connect you with existing franchisees in a similar situation to yours so that you can speak to someone who is living the reality and ensure it’s the right decision for you. Ask for the contact details of a franchisee who operates their business as a side hustle and pick their brains on the ins and outs of the set-up.

Whether you’re just looking for something small to supplement your income or have dreams of building a bigger business with staff and a manager on board, a franchise opportunity could be the perfect side gig for you, so it’s worth including these opportunities in your side hustle research.

The post Can you have a franchise as a side hustle? appeared first on Inside Small Business.

The Ombudsman says that the reforms, which will come into effect on 1 July 2021, will even out the power imbalance that arise in disputes between franchisors and franchisees.

“These reforms are an important step towards getting the balance right for our small and family businesses in the franchising sector,” Billson said.

“In particular, providing greater powers to my office to appoint an independent arbitrator when both parties agree, will help resolve disputes in a cost-effective and timely manner, while crucially protecting business relationships. This supports a no-surprises, collaborative and mutually respectful commercial relationship between franchisees and franchisors.

“Allowing my office to facilitate group mediation when several franchisees are in a similar dispute with the same franchisor, is another critical reform that will help restore confidence in this sector,” Billson added.

“The changes to the Code mean prospective and current franchisees will be better armed with vital information needed to run their business. This includes more transparency around the marketing fund, with an annual financial statement which sets out meaningful information regarding expenditure. Greater visibility around rebates and leasing arrangements will be achieved by these reforms.”

Billson said that the mandatory Franchise Disclosure Registry, scheduled to be released in early 2022, will be an important step in giving prospective franchisees the vital information they need before they sign up to a binding franchise agreement.

“Over the past six months my office has fielded over 240 calls from franchisees seeking information regarding disputes under the Franchising Code of Conduct,” Billson said. “This demonstrates just how critically important it is for prospective franchisees to know exactly what they are getting into before signing on the dotted line.

“Ultimately these much-needed reforms to the Franchising Code of Conduct will play an important role in making Australia the best place to start, grow and transform a business,” Billson concluded.

Franchisees who find themselves embroiled in a dispute under the Code is urged to contact ASBFEO for assistance on 1300 650 460 or email info@asbfeo.gov.au.

The post Franchising Code reforms to ensure more fairness for franchisees appeared first on Inside Small Business.

According to the latest Australian Franchise Business Pulse Check survey – that comprised of responses from 113 Australian franchise systems covering 21,368 business outlets – 45 per cent reported revenue increases exceeding 10 per cent for the quarter ending March 2021, an increase from 33 per cent recorded during the previous quarter. The report recorded particularly strong performances from the health, building and construction, and courier and freight-related industries.

However, the report also noted that, despite the revenue growth, 51 per cent of survey respondents are still wary of the risk of further government lockdowns that could strangle recent progress. Other challenges to tyhe sector borne out by the research include franchisee recruitment (33 per cent), compliance (32 per cent), wellness of franchisees and staff (32 per cent) and workplace relations issues (30 per cent). Cafes, sit-down restaurants, and travel businesses continued having a weak performance, being the industries most affected by the pandemic.

Despite these challenges, positive sentiment prevailed among 65 per cent of franchisees with regards to their future, anticipating a moderate (59 per cent) or significant (6 per cent) increase in revenue in the upcoming June quarter.

A total of 520 new units were also reported to have opened across 85 brands during the March quarter, mostly belonging to retail stores and home maintenance services. However, 109 franchised units were permanently closed across 28 franchise networks during that same period, predominantly in the retail food (café) category.

“Business recovery is steadily improving and the Australian economy is in a strong position which is critical boost for small business right now,” Franchise Council of Australia CEO Mary Aldred said.

“As our results show, the risk of snap state government lockdowns is the number one cause for concern across the majority of businesses surveyed. The FCA is recommending a consistent national approach on agreed thresholds for snap lockdowns, to improve business and community confidence.”

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