Dawn Engelbrecht, on her franchise story for her nationwide after school care business, sKids.
My first experience in franchising was when I still lived in South Africa and did accounts for a chain of franchised restaurants. It showed me the value of replicating a good brand using strong systems and support.
In June 2000 when we arrived in New Zealand we had no family or friends to rely on so as two full-time working parents, the frustration of school finishing at 3pm was something that we discovered quite quickly.
The school that my children attended had a small after school care programme - my children were three of the six children attending- so I jokingly said that I should buy it and the owner said: "Well it's for sale," and that was my first sKids franchise.
At the time sKids was already a franchise albeit with very underdeveloped systems. There were a handful of unhappy franchisees already and so I and a couple of other franchisees decided that we needed to make a change. On July 4, 2006 myself and my business partner Bev, who was also an existing franchisee, took over the international rights to sKids.
We were now the franchisors!
We spent the first 12 months focusing on developing manuals and tools for our franchisees to use. We also went through a re-branding process. Early on we became member of the Franchise Association of New Zealand as we felt this would give us a level of accountability in our systems.
We had the opportunity at this stage to stop franchising and just operate the sKids programmes ourselves, but our vision was to make the name, sKids, synonymous with quality after school care and to do this we needed people who were as passionate about what we were doing as we were.
The only way to do this was to continue franchising as then we could look for business owners with a passion for children - generally a business owner will go further for their customers than an employee.
There are lots of things to consider before choosing to franchise a business. The main one being that it is very expensive and time consuming to do it properly as you need to have good systems, good legal documents and a good track record of sites that you have run yourself to show your model works.
Naturally the financial returns need to be good for all parties but generally it will take two to three years for the franchisor to recover their system development costs, so you have to be ready for this.
Also, franchisees are not your employees, so the relationship is very different. By franchising you are allowing someone else to replicate part of your business - hence the need to make sure your documents are very detailed as this is what the franchisee will be relying on to grow their business. Most of our franchisees now own multiple sites and often refer their friends to us as prospective franchisees.
We have learnt a lot along the way and the biggest lesson is to take your time appointing franchisees as you will need to be able to work with that person for many years. You need to give a lot of thought as to what makes a good franchisee so that you know what type of person you are looking for. Our biggest mistake so far is not being tough enough on franchisees who don't follow the system - we have got much better at this as it damages everyone's business if one franchisee is not pulling their weight.
We find that our franchisees are very innovative and often come to us with new ideas. Our approach on this is to always look whether it has potential to be used throughout the system and does it fit in with our philosophy of making after school care fun yet educational for the children in our care?
We decided in 2010 that we wanted to look at exporting our system internationally. We spent a year investigating the market in Australia and in October 2011 we opened our first franchise in Melbourne. Early days yet but we have another three prospects in the due diligence process at the moment.