Sarah Stowe (00:04):
Welcome to Spill Biz. I’m Sarah Stowe, head editor at Inside Franchise Business. Join me as we have candid conversations with leading entrepreneurs and business owners behind some of the world’s most impressive franchise brands. At Inside franchise business. We acknowledge the traditional owners of country throughout Australia, repair respect to elders past and present.

(00:30):
Hello, I’m Sarah Stowe, editor of Inside Franchise Business. In today’s conversation I chat with Rich Goodman who is leading the Muffin Break and Jamaica Blue Brands. We talk about leadership, sustainability, profitability, and collaboration. Rich offers some insights for young would be retailers and entrepreneurs and we find out how someone with an early ambition to become a vet, who thought farming might be an option instead and studied agricultural economics, ended up with a stellar career in retail. It all started at David Jones. Have a listen.

(01:07):
Welcome to the podcast Rich. It’s great to be able to chat with you about your experiences and your plans. And I’d like to start first up by highlighting some of the businesses you’ve been involved in. You’ve been a board member for Asia Pacific Travel Retail Association. You’ve led duty free chains, Heinemann and Australia Duty Free. You’ve racked up an impressive 13 years at the iconic department store, David Jones, where I think your roles have included sales manager, store manager, regional manager, commercial planning and communications manager. So that’s quite impressive. My first question is then what is it that took you down the retail path? How did you get there?

Rich Goodman (01:47):
Thanks Sarah. Appreciate you doing this and firstly it’s great to be here. I started post-school wanting to be a farmer. I embarked on a university degree doing agricultural economics and felt, found out very quickly that post leaving school, I missed the community of being with people. And you’ll see through my career ,and thank you very much for your kind reflection on my very fortunate career, that it’s really been one of working with amazing communities, amazing families and that’s what I really lost doing a university degree and what I found in at David Jones, this amazing department store that focused so heavily on community and people and family.

(02:36):
And I fell over into retail. I never, never really left school, and I also should say I don’t really think they talk a lot at school, about a career in retail. It’s really something you do between as a bridge between where you are and where you want to get to. And I think that’s a real shame there. There’s a lot of great learnings you can have in this career. There’s a lot of avenues you can fall into or aspire to. And I’ve had the privilege of working with many amazing leaders who like myself have worked up through their career in retail from the shop floor.

Sarah Stowe (03:14):
So was it something that you sort of landed there and it felt like home, a bit of a homecoming, this is actually what I missed or did it take a while to find your feet there?

Rich Goodman (03:24):
Yeah, look, I think I’ve lived a very sheltered upbringing and what I found joining the men’s jeans department at David Jones in Chatswood Chase in Sydney was a really a very diverse mix of age, backgrounds, living situations. And for me, I landed in retail finding these amazing, incredible people who were just lovely to work with. Were focused on fostering this young kid who was 17 at the time and straight out of the school. And really for me it was a decision of do I keep studying economics or do I find an opportunity to learn? And obviously being at that age, earning an income gives you freedom and adventure. And I found that not only through work but also through the remuneration you got at work, which was far more attractive than going to university and taking a pack lunch . Yeah. And I never really stopped. I loved it. I fell in love with working at David Jones and stayed there for a long time.

Sarah Stowe (04:44):
Was there anything special about David Jones? I mean, it is such an iconic brand, isn’t it? I mean department stores now I think don’t have quite the same position as they did in retail, it’s much more challenging for them. But how would you sum up your experience in terms of the retail offer and what they were doing?

Rich Goodman (05:02):
Look, I think I found during school, and I’ll say this is no different at David Jones, the more you invest into a business, the more opportunity you see. And the Australian retail landscape is peppered with people who have worked or grown up at David Jones. And so I found a business that was focused on people, focusing on development, focused on great leaders and promoting great leaders. And I received my first opportunity to grow at the age of 18 into a supervisory capacity with very little experience but they saw something in me that I’ve never forgotten. And if that’s not a great and forward thinking company back in 2000 when beliefs and I suppose views were quite different to what they are today I can’t think of one that would be, is better suited. So yeah, I found a great opportunity to grow and certainly I spent half my life, nearly half my life there by the time I left. And yeah,

Sarah Stowe (06:11):
That’s significant, isn’t it? I mean obviously been quite formative in terms of I guess shaping your career, but you moved into Heinemann and then went into the duty free. So whatappealed to you about that,

Rich Goodman (06:25):
I did look, I think I felt I’d certainly reached my potential at David Jones. I’d learnt as much as I could learn. As people move on, you missed those formative leaders that you had around you. And I realised for my career I needed to step out and I found Hienemann, which wasn’t really something I was looking for at the time. David Jones at that time was going through a significant amount of change being acquired by Woolworths South Africa. They were moving their head office to Melbourne. And quite fortunately the HR leader at Heinemann reached out to me through LinkedIn and I found this incredible company, a company that was really focused on family, on empowerment, huge scale. And what I found was this opportunity in cadence of change that was necessary to service the 14.9 million passengers that went through Sydney Airport every year. And it was super exciting.

(07:27):
Working in department stores the cadence of change is very slow cause you’re moving a big behemoth. Whereas in duty free not only the volume of the business but the cadence of the passengers so immense. This business had been around since 1879, so over 140 years old that was now led by the fifth generation of the same family that started originally, and they were really focused on mutually beneficial relationships on family again and community and making sure that in any airport where they worked, that relationship and providing mutual benefit was more important than the dollar lost or dollar spent. And I think that’s unique and something special. I was very privileged to work there.

Sarah Stowe (08:15):
And let’s bring it up to date, I mean for the last 10 months you’ve been heading up a multi-brand franchisor business Foodco. That’s probably not a commonly known name but obviously the two brands that sit under it are real Aussie Cafe favourites. So there’s Jamaica Blue and Muffin Break and lots of people have heard of those. What attracted you to the role at Food Co?

Rich Goodman (08:39):
I think as you just said, Sarah, firstly the brands I had known Foodco either through driving past their head office, which used to be located on the east side of Sydney many times and

Sarah Stowe (08:51):
Prominent position on the corner.

Rich Goodman (08:53):
Very prominent, very prominent position. And having worked in shopping centres all my life really, I don’t think you could think of two more iconic brands in Australian and New Zealand departments in our shopping centres that one of us or someone would’ve visited at least once in their lives. So I met the owners and the board and felt there was a really collective shared vision between what I wanted to achieve for the brands and more importantly the values that they stood for and obviously taking, coming in and taking over from a gentleman that’s arguably probably known as the father of franchising in Australia, Serge Infanti, was great to have that mentor around me but also to allow the space to really elevate these brands and bring them back into the consideration set of customers of today.

Sarah Stowe (09:48):
It’s quite a challenge I think, isn’t it? Because it, it’s not a family business, but I always have the impression that it is, it acts as a family business.

Rich Goodman (09:58):
It is, it’s family owned, it’s privately owned. So yeah, certainly it certainly acts still as a family business in a lot of ways

Sarah Stowe (10:07):
And I think sometimes that’s a challenge, isn’t it? Coming in as an outsider in . Serge has been there in a hands on role for so long being so integral to it that it can be sometimes a bit of a challenge to take over the reins. Has that been fairly easy? Is it?

Rich Goodman (10:24):
Yeah, look, Serge has been hugely supportive of the transition. I’ve gotta acknowledge for this has been his baby for a long time and arguably has led it through some of the most rocky challenges that any franchise that franchising has been through over the past many years. Going through all sorts of political and societal changes and regulatory changes, and then Covid. And then this has been in a very stable business since 1989 when Muffin Break started. So I certainly have come in with a view that I hope to absorb as much from Serge as possible and he’s been hugely supportive of handing his baby over and also ensuring it’s set up for success for the future.

Sarah Stowe (11:11):
So what’s the strategy? Are you going to be implementing? Have you got a time scale on this?

Rich Goodman (11:18):
Yeah, look, I think without diving into significant detail, there’s really a couple of things I really want to achieve at Foodco and that will really inform the strategy. So having thought coming into this, what I really want to share, for me, there’s many facets to our strategy and the first of which is that I want our franchisees to have successful businesses personally for their families, for their communities, for their employees, and also for their own personal self satisfaction. I wanted to ensure that our business relationship with our franchisees and with our partners is about shared accountability that we’re both here to ensure that we’ve gotta put into the relationship and we’re all accountable for the outcome. And franchising over the many years is, it’s often considered a guaranteed success, but it relies on someone investing their time, their money and their effort to ensure that the business is successful. And it takes a lot of hard work for franchising to be successful from all parties.

(12:28):
I really want to know, I want our customers to know all the great things we do. There’s so many things I’ve learned over the past, really 10 months that I’ve never knew. And it’s a real point of difference for us. And I wanna make sure that we we’re sharing and communicating that broadly. I wanna be coming out with fun, new, innovative products. There’s lots of gr

(12:50):
eat things happening across the world and more locally. We’ve got the likes of significant gains in bubble tea and donuts at the moment. We’ve gotta make sure we find the right new product development that’s right for our brands.

(13:06):
And we also have a great opportunity to come up with new product that’s really attracting to keep people for their different occasions. We’re known in Jamaica Blue for amazing breakfast, but we also do terrific lunches as well. And for Muffin Break it’s about sometimes healthy or perhaps it’s permissible indulgence, allowing yourself the opportunity even though you know Covid, you might have been a little bit too indulgent, you need a treat every now and then. We wanna make sure that we can cater that for our staff. I want them to love working at Food Code. This is a great business and we’ve got lots of amazing people who we need to do more to celebrate and ensure we can continue to invest in. For our landlords, I want them to know, consider us a really sustainable, long term, great shop with great products, amazing coffee and innovative on trend shop designs.

(14:03):
And I want us to be continue, I want Foodco to continue to be held up as a great business partner. We are great partners with our franchisees. I truly do believe we do a lot above and beyond a lot of businesses and a lot of franchisors to ensure that our franchisees are successful. A lot of these people don’t see, but we do a lot of great things and we want to be great business partners.

(14:29):
Our strategy really and our primary focus is ensuring that we really refresh our brand, we refresh our placing and how we consider Muffin Break and Jamaica Blue and how we can put ourselves out in the consideration set of customers. And using really the mix of existing talent that we have in our business. We’ve had a lot of recent promotions and we’ve also had a lot of new people join our leadership team and we’re really well placed to step into that next growth phase for our company which you’ll start to see the seed of early next year.

Sarah Stowe (15:04):
That’s gonna be exciting. I look forward to that.

Rich Goodman (15:06):
Thank you.

Sarah Stowe (15:07):
You picked up on a, you’ve mentioned it’s been quite a broad response there, which is fantastic, so we know where you’re going in some sense with the business. You’ve talked about landlords, you’ve talked about franchisee profitability, you’ve talked about kind of staffing and those are probably kind of three, well you’ve got supply chain issues probably as well. I mean there’s a lot going on, isn’t there? I mean, in terms of the economic and the environment at the moment, it’s probably a very challenging time. What do you see as the big challenges in terms of those kind of important partnerships and just steering a steady path through those challenges?

Rich Goodman (15:47):
Great question. I think not withstanding the current pressures of cost on citizens, on countries, on not withstanding the current pressure on labour. I was in Auckland last week and I can’t seen a more strained labour environment than I saw in Auckland last week. It’s really tough over there. So I think our focus has gotta be to help working, help work on solutions and continue to ensure that you, you’ve gotta listen to the network, listen to what’s happening, listen to where they need the help and support. So we’ve set up a number of forums to give our franchisees and our team a voice and hear them and listen and action plan and work, go and work on that. And we’ve recently completed our round of group meetings, so we meet all our franchisees in every state to hear. And we’ve had really positive feedback about the collaborative approach we’ve taken to those meetings.

(16:54):
So I think to answer your question, the first focus for us is to listen what’s happening out there but also to use our history, use our knowledge, and use our scale to ensure that we’re trying to do our best to support the franchisees and adjust where we can. So for example, in a normal year we would get roughly eight price, eight price changes, sorry, one annual price change. But we generally get over outside of the cadence of that, usually eight, In the last 12 months we’ve had 85 price changes of products. And so just to give you I suppose a sense of how big the market is fluctuating at the moment. And I’ve gotta acknowledge that some of that is due to supply chain shipping problem or challenges. Some of them is due to supply from war affected areas such as Ukraine. Some of that is based a little bit on opportunity, opportunism and some of that is based on the real cost increase associated with the production of that product. And so we’ve gotta make sure that we’ve gotta, we keep looking for opportunities to keep our franchisees as profitable as possible at the end.

Sarah Stowe (18:16):
And where do landlords sit with all that? Because I mean they can sometimes be seen as the big bad wolf. They’ve had their challenges as well obviously with the economics. How is your relationship at the moment in terms of food co and the landlords.

Rich Goodman (18:37):
I think if you start at a place there to recognize that we’re all in business and we’re all here to do the best for our companies and I don’t consider the landlords are doing anything that I wouldn’t be doing if I was sitting in their seat, that it’s all trying to protect our bottom line. And I’ve gotta say that in the vast majority of cases, the landlords have been very reasonable. And I say reasonable because a lot of them have considered the downstream effect. This is having on a small business owner’s livelihood we deal, with whilst Foodco maybe over 400 stores the bottom line impact is that it, it’s affecting a franchisee. And I will say in the vast, vast, vast majority of cases, we’ve had a lot of reasonable outcomes. There have been some situations where we haven’t been able to find a solution and we’ve closed stores and there’s been some opportunities where we’ve been able to derive a better outcome as a result of Covid. So I think to sit here and complain about the state of the landlord and leasee and leasor discussions would be inaccurate. We’re all in business, we’re all here to derive the best outcome for the businesses we represent. And there are ebbs and flows in that relationship. So in general, I really compliment the landlords in the vast majority that we’ve dealt with

Sarah Stowe (20:10):
Through there. We’ve talked about, we’ve mentioned kind of profitability for the franchisee. I mean I think there are three sort of keywords that I’d like to throw at you. There’s sustainability, there’s profitability, there’s collaboration, and I just wonder how fundamental those are to kind of Foodco because that just seems to be very much the direction a lot of businesses are going in now.

Rich Goodman (20:29):
For sure. I’ll start with sustainability if that’s okay and come back to your others. So sustainability is obviously an important part of where we’re heading in society. We’re seeing most recently, as of yesterday, New South Wales mandate the removal of single use plastic, so no longer single use plastic bags or straws. I’ve gotta say, as a company that’s working over multi countries and multi-state, incredibly challenging at the moment managing different states expectations and also managing where in some instances where the state has mandated something that’s physically impossible to achieve. So there’s been mandates around products that need to be implemented that just don’t exist.

(21:20):
So I’d say from our end, we see sustainability is really important and we see the most impact that we can have, that has been our immediate focus is about putting less stuff in the bin. So how do we minimise the waste to landfill? And also that includes from a food perspective, where it’s absolutely possible, how can we continue to work with food to ensure that it doesn’t just have one use down downstream, it’s got potential. So a muffin that doesn’t get purchased at the day is then turned into a potential cake the next day. But we’ve still got a little bit of work to do there to ensure that we are maintaining the quality and the freshness of what we do. Butchers do this every day, they have a piece of beef and then they turn it into a sausage and then so on.

(22:21):
I think we’ve still got a little bit of way to do, to go when it comes to society’s acceptance, that sustainability sometimes costs more, I should say often costs more. So if we put a muffin that’s sustainably sourced with sustainable product, it would cost us over a dollar more. And when you line those up next to each other, do you want the sustainable, non-sustainable product? Our history and our research and our feeling is that customers aren’t willing to pay that much more where there’s not a minor cost difference, 10 cents more, no brainer but we’re just not at a point where the technology or the processes are sufficient to support a minor cost increase. And when we get there we, we’ve got a lot of work to do around there.

(23:12):
Your second comment that was about collaboration, profitability. Sure. So we always continue to review the inputs and the outputs of our business model. And we certainly saw during Covid that the inputs, the largest one obviously being revenue, was significantly strained and we made the appropriate changes in our business model to adjust to that. But we are seeing sales back to pre-Covid levels, actually in excess, which is great. So those inputs have been adjusted back to what they were in the general sense. However obviously there’s strain on COGS, the cost of goods sold, there’s strain on personnel costs and we continue to ensure that our model still works well. And it does. We do that through a number of different levers. There’s communities behaviours and the customer behaviours have changed since pre-Covid. One small fact is that people are buying larger coffees in general.

(24:17):
People have gone from a small to a medium, it’s actually increasing more than five per cent. Cappuccinos are not as popular as what they were before. So less chocolate powder for example. So we continue to review pricing to ensure that we’re meeting the market but there’s also been some mix changes. People aren’t buying the same mix of product, they were Covid actually, they’re buying higher price products. So transaction values have gone up. So I think we’ve just gotta make sure we keep close to ensuring we get a lot of data from our franchisees and we also get a lot of feedback. So we continue to review our profit profitability model.

(24:59):
And you talked about collaboration as well, and that really speaks to my last point is… I think like any retail business, you can’t lead from an office. You need to be out in the field. I’ve now visited 87 stores and I want to get out to the rest of them as quickly as I can but you gotta be out listening to the team and hearing what’s going on.

(25:22):
It’s an interesting model, this because I’m worked in businesses where you have direct responsibility for what’s underneath you and you can ask the team to, or where required instruct the team to achieve or execute something in a certain way. We’ve gotta respect that we’re dealing with over 400 individual business owners who, we give them the model, but their job is to make it right for the local community. I don’t have direct control exactly what a franchisee puts in their store in every single shelf, in every single location on that shelf which is very different to the way I’ve traditionally managed where you have a planogram. And so we’ve gotta respect the franchisee that they know what’s right for their local community and they’re doing that in the pursuit of getting the best outcome for them and for Foodco as well.

Sarah Stowe (26:17):
Now you mentioned there it’s a very nice segue for me. You mentioned there about leading from the front and I just wondered what other attributes that you think are kind of key to good leadership? How would you define it?

Rich Goodman (26:29):
Oh, that’s a great question, Sarah. Look, I think what stood me well over my career is treating people, treating people with respect, treating people with humility, appreciating that you don’t always have context. You know, can come into a business like this and you’ve gotta appreciate that it’s been a rough couple of years. You’ve gotta have an element of empathy for what’s gone on. I think the best leaders can look at themselves and say, How have I contributed to this situation? Don’t blame the situation, look at yourself and say, how have I? So from a leadership perspective, a high degree of really emotional, intelligent, an ability to self reflect on how you’ve contributed is really important.

(27:24):
I think they’re some of the key attributes, attributes that have really stood me well in, over my career.

Sarah Stowe (27:40):
And in terms of empathy there, I mean I’m interested in people’s personal kind of ethos if, what is it that kind of drives you and how you do business? I mean it seems as if it is that emotional intelligence is quite important to you?

Rich Goodman (27:57):
Very much. I think genuinely people don’t get up in the morning to do a terrible job. There’s a reason for our stores, our franchisees, they get up at sometimes at three or four in the morning and come in and bake and they bake every muffin that you see on display in every Muffin Break store across the country. And for our team here, and for me, I, I’m motivated by results. I’m motivated by the effort that I put in is deriving an outcome. And I’m also motivated to feel part of something.

(28:30):
I talked about in the first couple of minutes of our talk about community. I’m motivated by the community that’s around me. I love working with great people and I get hugely inspired by that. And for me it’s looking at what drives someone individually, not just as a team is really important, to understand what are the self-drive as an individual, not just as a group.

Sarah Stowe (29:05):
Do you think businesses is a mindset or is it instinctive? Do you think it’s something that you learn or do you think some people have a natural an innate ability to, they’re just natural born business people?

Rich Goodman (29:23):
I think it’s a mix of both, Sarah. I say this very much being as vulnerable as possible. I left school wanting to be a vet. I wanted to be a vet, veterinary doctor. I studied as I did vet nursing, I finished school and I didn’t get the marks. And I thought, well, I’m, my life’s over, I’m not gonna be able to do that. I’ll be a farmer. And so I went and did agricultural economics and I’m not the smartest guy in the room. In most situations I’m not the smartest guy in the room. I sit there and I can listen and I can work with great people and I can understand really well what’s happening by people’s emotions, by the skills I’ve learned through many leaders that I’ve worked around. So to say that I was really, to say that I’ve learned my craft over the years I’ve been working in retail, and that’s been a learned behaviour, not something that’s really been embedded in me from my youth.

(30:35):
But I also believe that some people are to work in this type of work in business, you’ve gotta be great with people. And if you’re not great with people, you’ll get found out, you won’t succeed. And there comes a point where I’ve worked with some amazingly intelligent people that are just not great with people and they reach their limit. And I actually think it’s more important to be great with people than to be the smartest person in the room because ultimately you can work or employ or have around you great, far more intelligent people than yourself. It’s about bringing great groups together and pointing them in the right direction on where you need to go. I’m not sure if that’s really answered your question, but

Sarah Stowe (31:28):
No, it has. I mean I think it has because that sense that you’re learning the skills that you can succeed in business and you learn those skills. So just to end, I just wonder if you have any advice other than the very, very extensive contributions you’ve already made in terms of a young person wanting to get into business, whether it’s retail or any other kind of business, what advice would you give them?

Rich Goodman (31:55):
My best advice is effort, use, put in effort. The more you put in, the more you will get out of life. And that’s no different with business. So if you see an opportunity to involve yourself in something that’s not part of your day job or your course that do it because you’ll learn something that you didn’t learn the day before. And you’ll also meet people who you perhaps wouldn’t have met before. Early on in my career, I, I’ve met some amazing people that are now quite senior in the retail circles who have seen my put my hand up to do something that really wasn’t part of my core day job. And they’ve acknowledged that they’ve made an effort and invested in me. And I am where I am today because of the amazing people I’ve worked with and the effort I’ve put in. So my advice to anyone starting out in retail is to really start somewhere and learn and put in as much effort as you can.

(33:06):
The second piece of feedback I’ve got is learn as much as you can from an organisation and stay there until you’ve really reached your potential or learnt as much as you plan. Too many times you can often be attracted by another dollar an hour or $2 an hour or $5,000 and that’s great, but if you’ve got a great leader and you’ve got a great company, that’s invaluable, you can’t replace that. It’s not worth the opportunity you’re gonna get in another business. It will, you’ll have short term gain but long term you’ll be in much better positioned if you stick with a leader and stick with a company that believes in you.

(33:51):
And then the last thing is really make sure that you foster and invest into relationships. I work with people today that I worked with 23 years ago and still yesterday I was on LinkedIn and I saw someone who was a casual, who worked for me, who I recruited as a Christmas casual, is now a store manager at David Jones. And I find that, I’m so proud to see people develop. I don’t, haven’t had a huge influence in that individual’s career. But if you invest in people and make sure that you spend the time to give, to help foster people around you, they’ll never forget it. But you’ll also you’ll never forget it either, because it really, it’s quite fulfilling. I find it hugely fulfilling seeing people who I’ve worked with or have worked around be promoted and be successful.

Sarah Stowe (34:59):
Well, I think that’s a brilliant point to leave the conversation. It’s very positive. Thank you so much for all your shared experience and advice there and we look forward, Rich, to seeing what you achieve with Foodvo. Thanks for the chat.

Rich Goodman (35:13):
Thank you Sarah. Much appreciated.

Sarah Stowe (35:20):
Thanks again for listening to Spill the Biz. Don’t forget to subscribe and if this podcast spiked your interest in world of franchising, make sure you check out our website, insight franchise business.com au for more great info and tips on how to get started.