John Watt – Supanews group manager, network development discusses what it’s like to run a Supanews franchise.

How would you define your brand?

Supanews has achieved its success by being a “best practice” retailer.

As the only full business franchise model within a fragmented industry, Supanews has created what it believes to be the best business model to not only meet the future challenges faced by newsagencies, but also to make them succeed.

Supanews’ vision is to maintain and improve on this stronger and more robust newsagency model and to provide franchisees with manageable and profitable businesses.

How old is the company and when did you start franchising?

Supanews was formed in 1994 as a family business and first started franchising in 2004.

How many franchises do you have?

Thirty four franchise units and 16 corporate stores.

How many are multi-unit franchisees?

Five.

Where do you expect the business to be in 2010?

In 2010 are goal is to have 80 stores in our network with about 60 franchisees.

What are the start-up costs for a franchisee and what working capital should they have?

There is no initial franchise fee and no working capital needed. Investment can start at around $300,000 including stock for a Greenfield site.

For established trading stores which represents approximately 80 per cent of our opportunities the investment will be dependent on the net profit the store would derive to a franchisee.

What is the length of agreement?

One five year term with two options to renew for five years.

What are the royalty fee and marketing levy?

Royalty is one per cent of all commission line (low margin) sales and six per cent of all general line (higher margin) sales. Marketing levy is 0.5 per cent of general line sales only.

What skills does the franchisee need?

Franchisees need energy, enthusiasm and passion, to be customer focused, to have a desire to succeed, to thrive on hard work, to work within company guidelines and have clear goals and vision.

They need a willingness to learn, strong administrative skills, an ability to lead and motivate staff, the desire to be actively involved in their local community and committed family support.

What will you teach them?

We will teach and coach them on the five key areas of their business to build them into strong retailers: customer service, store operations, financial management, training and development, and marketing.

What is the most common mistake made by new franchisees?

The most common mistakes I believe franchisees make is to believe that because they have purchased a franchise business they do not have to work as hard because the franchisor will do everything for them. Hard working, hands on owners make the most successful operators; trying to change the rules or procedures of the system once in, especially since for most franchisees, the systems are one of the main reasons they choose and buy into the system; underestimating how important it is to love the business you purchased and make this part of your due diligence.

If you do not love the business you bought you won’t have the enthusiasm and passion you need to be the most successful you can. Purchasers need to remember with due diligence that it’s not all about the numbers.