Business Opportunities Counter Redundancy Blues - From our cousins across the Tasman
This article was written about New Zealand conditions, but it is very relevant for Australia, too.Thursday, 19 February 2009, 1:38 pm
Press Release: Bayleys
Media Release
Date 18.2.2008
Kiwi workers finding themselves without a salary as redundancy numbers swell throughout New Zealand are increasingly seeking new careers in the franchised business area – a sector which has ironically found recessionary conditions working in its favour.
In response to what is already being seen as a growing market for relocating former corporate executives, middle management, and even front-line customer service and sales staff into new business opportunities, leading commercial and industrial property company Bayleys Real Estate has established a specialist franchise development team.
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The newly formed team acts as a conduit between franchisors, employees who have recently lost their jobs, and retail property owners looking to either sell or lease high-profile sites.
Bayleys franchising specialist Warren Petry says that while redundancy can be a time of immense stress and tension, it was also often a launch pad to bigger and better opportunities – particularly for those who had acquired all the business skills and acumen needed to run a profitable commercial entity, or for those former employees who were disillusioned about working for someone else… especially if that ‘someone else’ had just made their position redundant.
“We have identified franchising as an area that has the potential to benefit from the widespread restructuring that is indicative of the current economic climate,” Mr Petry says.
“Franchised businesses are now in the spotlight as skilled former executives and middle managers emerge with a redundancy payout in the bank and a blank slate in front of them where their work opportunities are concerned,” Mr Petry says.
“Those former business employees being made redundant have been dependable and constructive members of a team, and their situation is in no way a reflection of their commercial abilities.
“They are effectively buying themselves a job… and an asset.”
To capitalise on the growing number of franchise opportunities coming to market – and matching them with suitable investment partners - Bayleys is hosting workshops to bring together franchisors, finance and accounting specialists and existing franchisees. The concept is to give those former staff considering buying a franchise the opportunity to talk things through with those who are living the franchise dream or owning their own ready-made business.
“There are a wide range of franchise business offerings available - covering a broad spectrum of products and services, so different skill sets and investment levels are catered for. This is an exciting time for people to enter the franchise arena and with a National Bank survey showing that 95 per cent of franchisees survive the first three years of business, the risks are minimised for those new to self-employment,” says Mr Petry.
Editor of Franchise New Zealand magazine, Simon Lord, says the change in economic fortunes from a year ago had actually created an investment and labour talent pool for franchise business opportunities.
“In recent years - with a relatively stable economy and full employment - potential growth in the franchise sector has been restricted by a shortage of people prepared and ready to take up franchising. However, with people less certain about their employment future and concerns about passive investment options, franchises are once again attracting attention,” says Mr Lord who has been publishing Franchise New Zealand magazine for 18 years.
“Well-established franchises such as Bakers’ Delight and Fastway have ridden out the tough times before and are well-positioned to survive and indeed flourish in the current economic environment. On the whole, franchised operations are better equipped than independent businesses to handle the ups and downs of the economy.”
Mr Lord says the diversity of franchise options available is also a marked attraction -given the wide range of skill sets possessed by those forced to reconsider their financial futures following redundancy.
“There are franchises with low start-up costs right through to the international franchises with higher entry levels in terms of financial commitment. Finding the right match is crucial but the opportunities are there if you look for them,” he says.
Another up-side to the down-side of the economic situation in New Zealand for potential franchisees was that prime retail sites were now becoming more readily available and more affordable as landlords of commercial premises faced the realities of the property market, said Warren Petry of Bayleys.
“In more prosperous economic times these sites would rarely become available,” he added.
While the franchise model with its brand-compliant systems and formulas may stifle more entrepreneurial spirits, those with foresight and a healthy dose of creativity may find multiple franchise ownership or master franchising tempting.
Such is the case with Chris Henderson of the fast food franchise business Pita Pit which recently opened its flagship store at Takapuna Beach in Auckland, and has since franchised an outlet in Auckland CBD’s Vulcan Lane.
Henderson was a regular customer at his local Pita Pit in Mammoth, California, where he was working as a ski instructor. With his friend and business partner Duane Dalton, Chris bought the healthy fast-food concept back to New Zealand.
A former secondary school teacher with a post-graduate degree in business, Henderson says his first venture into business ownership was nowhere near as daunting as he’d envisaged - given the tried-and-true franchise systems that came with it, compared to opening a stand-alone or independent retail outlet ‘from scratch’.
“We were prepared to pay for proven systems, and the fact that others had paved the way for us. I don’t have a background in the food industry, yet I’ve taken the leap and it’s been a fantastic decision,” says Chris, who adds that the new owner of the Vulcan Lane Pita Pit comes from a music industry background.
“Despite your career history, what it takes to run a successful franchise is a good business head and plenty of time. Turnover has grown every single month we’ve been open and we’re positioned well to capture a vital segment of the food market given the economic climate we are in. Fresh, quick, healthy and under $10 is a great place for us to be right now and the public has caught on to the Pita Pit concept.”
Mr Henderson is currently working with the Bayleys franchising team to identify prime sites for new outlets and people keen to embrace the Pita Pit franchise concept
“It’s an exciting time for our business and brand, and while there’s no doubting the economy is in rough shape, those same conditions are throwing up plenty of opportunities – not only in our quest for new locations, but also finding the right calibre of people to embrace the franchise model,” says Mr Henderson.
ENDS
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