In tough times, it’s rare to hear business success stories. For fast moving franchises Café2U and ecowash mobile, a good business model is the key to growth. Having recently being awarded a coveted spot on the BRW Fast Franchises list for 2009, Café2U founder Andy Simpkin and ecowash mobile managing director Jim Cornish spoke candidly to Jessica Stanic on their success to date.
For mobile delivery business Café2U, national and international success came quickly, and the franchise reached the number 10 spot in the 2009 BRW Fast Franchises in the category of ‘Fastest growing franchise by outlet’ with a staggering 75 outlets, a 51.7 percent increase in the three years to June 30, 2008. Similarly, ecowash mobile, Australia’s global waterless carwash sensation, grabbed a top three place in the prestigious 2009 BRW Fast Franchises list for 2009 in its first year of eligibility, with a 102.96 percent increase in outlet growth and gross revenue in the three years to June 30, 2008.
So what is their secret? Café2U founder Andy Simpkin, puts it down to a good business model and an ongoing partnership with the franchisees, supporting them to grow their business.
“It’s important to support the franchisees to grow their business without being entirely dependant on franchise sales.”
According to Simpkin, the point of difference lies in the mobile support team they have created, along with incentives for franchisees.
“We have employed three franchisee development managers to go out into the field and work with the franchisees by mentoring and helping them to grow their business. It’s more of a partnership, and that is very powerful.
“What we do is guarantee that from their first day of trading they will take $500 a day. On day one they don’t make $500, we spend the first day in their territory looking for customers, giving away free coffees and introducing ourselves and at the end of the day they’ll do a cash reconciliation and it’ll say ‘takings, nothing’ so our franchisee development manager will write a cheque for $500. Straight away they know they’ll be getting $500 a day, and then it reduces the risk profile.”
Simpkin believes this is appealing to people just starting out as it, “removes the fear and gives them the security they crave.”
ecowash mobile managing director Jim Cornish is a bit more modest about his success, signalling they still have a long way to go.
“I don’t feel like it’s been that fast. We still have a long way to go in terms of growth. It’s one thing to grow a franchise really quickly, but it’s another all together to maintain that growth over time.”
When asked about the secret to his success, Cornish believes it is about having the right people by your side.
“Franchising is about the relationship between franchisees and their customers. It is important to have successful franchisers and good support systems in place.”
ecowash mobile has made huge inroads internationally, with operations in over 16 countries, with particular success in the United States. However Cornish is not getting ahead of himself, believing it is important to build on the “existing foundations of a business first” before going off and exploring new markets.
Cornish stresses the importance of maintaining a solid business foundation and creating a good business culture, believing potential franchisees need to keep this in mind when starting out.
“When it comes to franchise systems you can’t just throw money at people and hope it works. It is important to have strong systems in place. We have kept our company very lean as we don’t run a head office and therefore don’t need to pay rent. We also don’t have unnecessary amounts of staff, because where possible we have systems in place to ensure we are not so reliant on staff.”
He advises businesses to “approach things outside the square,” and most importantly to be “sensible about their decisions.”
“You need to ask yourself, how can I do this successfully where the benefit is not outweighed by the burden? Businesses today are too traditional in their thinking. For example if they are busy, they think, ‘I need a secretary.’ If they are expanding they think ‘I need a new office.’ This thinking is unnecessary and also places unwanted financial burden on the company.
“I would advise that these businesses go back to the basics. Know what you are good at and focus your attention on that, outsource what you are not good at and most importantly, have a good structural system in place.”
Simpkin takes a similar approach believing that the fundamental of any business is to ensure the business model is sustainable.
“For any small business the challenge is being able to invest in the right people ahead of your need for them. Many small businesses spend too much time backfilling in an attempt to catch up. It is important to anticipate need and to act accordingly to put yourself ahead of the growth curve. I would suggest employing good people before you need them and balancing that with the bottom line.”
In the current climate, businesses are looking for advice on how they can better manage their cash flow and increase their profit margins. Simpkin says cash-flow is the biggest hurdle small businesses face.
He advises businesses to “conduct regular cash flow forecasts, keep your accounts readily available, understand where your costs are in the business and manage accordingly.
“If you can’t measure it, you can’t manage it.”
So what does the future hold for these two franchises? Café2U is currently working on cracking the big time in the hugely competitive US market, while ecowash mobile is focusing on building on their current foundations, anticipating business will triple in the next 12 months.