When former food franchisee Al Houston decided to return to franchising after 10 years in real estate, he knew exactly what he was looking for. Top of his list were brand longevity, franchisee tenure and franchisee financial success.
Al knew from running an award-winning business previously that he had the skills to master a new franchise. What he wanted was evidence of the strength of the business model.
Al spent the early 1980s as the youngest drover in Australia. At 19 he managed stock on seven properties and owned his own farm till he was 40.
Then he sold the family farm and moved his young family to the city, for an education. That’s when he first bought a franchise; he and his wife each operating a different branded cafe in the same shopping centre, for 14 years.
After his decade in real estate Al was contemplating his next move – possibly even retirement! However, some marketing for Bedshed caught his eye and he wasted no time in filling out an application form.
As soon as he got chatting with the Bedshed team, he was keen to get to the issues that concerned him.
“I asked a few questions and found the answers were impressive. How long has Bedshed been in business? The answer was 40 years. How often do franchisees sell? Not often! Two in the last 16 years.”
Bedshed boasts long term franchisees
Al also asked about long term franchisees and discovered some business owners who joined in the 1980s were still trading. Some franchisees had multiple stores and some had the next generation already in place to run their businesses.
That impressed him. “My experience had been an average of 3.5 years franchisee tenure,” he says.
One final question – how many stores have gone broke? – elicited a strong response. None. Bedshed had helped any franchisee who had hit financial challenges to overcome them.
“There is high risk in any business, however if they are any good franchise systems reduce that risk,” says Al.
“I’ve met all the Bedshed franchisor staff and I am really impressed with how genuine and capable they are.”
Keen to keep it real by chatting with business owners themselves, Al spoke to about eight franchisees and he received glowing testimonials.
“One store owner said ‘Bedshed is a fun business to own. Everything you get told about your future business is accurate’.
“They’ve got a talented group in head office, and I like the culture, it is family-sized and professional, corporate without being corporate,” says Al.
He was also impressed by the flexibility of the head office when it came to store refurbishment.
Stores were redeveloped in a 10 year plan.
“They could have made everyone switch within two years – but Bedshed is not that dogmatic. I felt that was quite reasonable.”
So I know I will have to allocate some funds [for refurbishment].”
Al’s comprehensive research led him to sign up to a Bedshed store and he takes over the lease of the Toowoomba outlet in November this year.
It’s a Supercheap Auto site in the centre of town, a big box store of 750sqm with 34 car spaces. Bedshed controls the fitout and has contracted shopfitters.
Average sale size a bonus for Bedshed franchisees
Another plus for a Bedshed franchisee is the average customer sale – in a standard coffee shop the average transaction is likely to be about $7. In Bedshed it is $1400.
Al likes the idea of dealing in smaller volume sales at the premium end of retail with no product spoilage.
“There is a similar profit margin percentage to a cafe. However previously I had 20 staff, now it will be a third of that number but we will have a significantly bigger turnover. The base cost is a lot higher, but I control the culture of the staff,” he says.
Al says good business and people management is about respect.
His message to staff is ‘I will look after you, you look after my customers, the customer looks after the till’.
Al says “I will employ good people and look after them. I treat them with respect, and invest in the culture,” he says.
“I think I’ve got one last hurrah. I’m 65. If I need to I will bring in a manager – and I’ve got sons. It is possible this will be a succession plan,” he says.
“There’s a lot of stability in Bedshed, I have no doubts about it. I coudn’t miss this opportunity.”