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Franchisee Advice

Go The Extra Mile: Walk 500 Miles Then Walk 500 More

Here are tips and strategies that will help you stand out from the competition by offering unparalleled service.

Basil O’Hagan

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1. Make it easy

How easy is it for your customers to access your services? Is it easy for them to pay? Can I pay for my goods by cash, debit card, credit card or EFT? By e-wallet? Do I have to come in to your shop, or can I buy online, by phone, by SMS? Do you pick up or deliver from people’s homes and places of work?

It’s always sad to see the owners of businesses standing around in their stores, waiting for customers to come to them. They should consider going out into the world and taking their services to their customers. The easier it is for people to do business with you, the more likely they are to do so.

I once worked in an office where busy staff would often order lunch from the restaurant across the road that did deliveries. This ease of doing business made the order-in option more attractive than going out, getting into your car and then braving the Sandton City food court.

I also know of someone who brings in fresh farm lamb from the Eastern Cape and delivers it to your door. Ordering is as simple as sending an SMS. People use his services because it’s easy.

So try to remove any barriers of distance, time or inconvenience that stand between you and your customers. They’ll thank you for it with more orders.

Related: Go Above And Beyond With Your Customer Service

2. How to lose a customer, guaranteed

Certain staff behaviour is guaranteed to put customers off your business.

Try to avoid these at all costs:

  • Clock watching. Locking your store at the stroke of 5pm, or heaven forbid ten minutes early, is a big turn-off. And if someone arrives late and you can see them at your door, serve them! The traffic will still be there in 15 minutes’ time.
  • Favouring the phone. Real personal interaction is the most important kind. So never interrupt a conversation to pick up the phone. It’s rude. If absolutely necessary, ask the customer if they mind if you answer this call.
  • Eating, drinking or smoking. These are lunchbreak activities, to be done out of sight of your customers.
  • Poor prioritising. Serving a customer comes first. So don’t insult them by laboriously wiping your counter while they stand around waiting
    for you.
  • Not greeting. Say hello, and look your client in the eye. A glazed, disinterested stare just makes me want to turn around and walk out.
  • Pumping tunes. You might be having a fun moment, but music that’s too loud gives the impression that it’s all about your entertainment and not my service.
  • There’s hardly any context where swearing is a better idea than not swearing. While you’re busy serving customers is definitely not the time for swearing.
  • Staff should be trained to be knowledgeable about your products and services. If they’re not, that’s your fault.
  • Power tripping. You may have authority in the store, but don’t lord it over your customers. Scolding them or abruptly ordering them around, or being condescending is inexcusable.
  • Cleanliness failures. Keep your store clean, from the entrance to the displays to the floors to the toilets. In other words, everywhere.

3. Foster loyal customers

“We must come back here!” Have you ever found yourself uttering this statement as you leave a restaurant after a delicious meal and a great experience? That is a restaurant that has nailed the essence of customer service. They have built customer loyalty.

Friesland Milk Bar in the Quigney suburb of East London makes what some say is the best milkshake in South Africa. Their double-thick chocolate shake is something everyone should experience once in their life.

Whatever the owners do to make that thing, it’s quite magical. And the mystique of seeking out the quaint little shop adds to the experience. Friesland has built a community of loyal customers who now cannot visit East London without a Friesland shake.

Related: Customer Service Success Secrets

Loyal customers will tell their friends about your store, they will start looking for excuses to visit again. They will want to be the cool person who recommends a place that later becomes a community landmark. Whether through quality service or amazing products, or both, this should be your goal.

Besides wanting your customers’ business and their money, try to put yourself in their shoes. How can you make their experience in your store as good as possible? With this approach you will soon have a core of loyal customers who can’t wait to
come back!

4. People hate waiting

man-waiting

Ours is a time-poor society, and we are all often in a bit of a rush. So we do want our needs met as quickly and efficiently as possible. Your customers probably feel the same way.

Instead of seeing this as an extra form of stress, why not build a time challenge into the service that you offer? Put up a sign at your carwash saying: Cars washed within 30 minutes or you pay half price!

We all know the pizza deal that promises to have your large Margarita at your door within an hour, or it’s free.

This kind of a beat-the-clock promotion succeeds in three ways.

  • It attracts customers. They want satisfaction and they want it now. Someone who promises quick service will pique their interest.
  • It challenges staff. Your employees will need to be on their toes to meet these new deadlines. But they should be pretty sharp anyway.
  • It sets you apart. Your 60-minute-challenge promotion distinguishes you from your competition. It shows your business is serious about providing a quick service.

It’s an interesting approach, and if you take it seriously it will help you provide the best service you possibly can. And you’ll have a happy, satisfied customer. Then, when you’ve successfully handled that person’s business, do exactly the same thing with the next customer to walk in. It’s good neighbourhood marketing.

This technique helps to ensure that you appreciate your customers and make them feel appreciated too. The ‘most important person’ approach will see your customers leaving your store saying, “Wow, finally a store that gives me the service I deserve!”

5. Under-promise and over-deliver

Managing client expectations is a key part of doing business. Although it feels good to talk a great game and impress your customers when you tell them what kind of service to expect, you may be setting them up for disappointment.

If you tell your client you’ll have his suit dry-cleaned by tomorrow, he’ll probably show up tomorrow expecting his suit. If it’s not ready by then, he’ll think you’re a pretty useless drycleaner. So if it’s going to be tight getting the suit ready by tomorrow, why not promise to have it ready in a more realistic two days’ time.

Related: 6 Ways to Make Your Customer Service Better

Then, do your utmost to have the suit ready by tomorrow. If you pull it off, give your customer a call and tell him: “Great news! I’ve got your suit ready for you.” He’ll be surprised and impressed.

You’ve under-promised and over-delivered. By managing your customer’s expectations you’ve made him feel like he’s getting amazing service. You also haven’t put yourself under too much pressure, while leaving the door open to still deliver early and impress your client.

Basil O’Hagan is the founder of both O’Hagan’s and The Brazen Head. Today, he runs Basil O’Hagan Marketing, which serves chains, independent operations and small family businesses, pinpointing and overcoming problems through proven neighbourhood marketing solutions.

Franchisee Advice

5 Tips For Franchise Agreements

Below are 5 tips to ensure that your franchise agreement complies with the CPA.

Justine Krige

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South Africa has some great homegrown franchises – Mugg and Bean, Steers, Debonairs and Nandos, to name a few.  South Africa is also no stranger to international franchise groups, such as McDonalds, KFC, Wimpy and SPAR, although there has been an increase in the number of international franchises investing in South Africa in recent years.

The Consumer Protection Act, No 68 of 2008 (“CPA“) is the first piece of legislation in South Africa that specifically regulates franchise agreements. The CPA prescribes certain minimum requirements for franchise agreements, as well as certain information that must be disclosed prior to a franchise agreement being signed.  It is important that all franchise agreements comply with the CPA as provisions in franchise agreements may be declared to be void for non-compliance.

Below are 5 tips to ensure that your franchise agreement complies with the CPA:

1. Make sure you meet the minimum requirements

The CPA prescribes “minimum requirements” for franchise agreements.  These requirements, which are set out in the Regulations to the CPA, set out mandatory terms (i.e. terms which must be included) and prohibited terms (i.e. terms which must not be included).  They also prescribe that franchise agreements must be drafted in simple and plain language so as to be easily understood.  Legal jargon must be avoided unless absolutely necessary.

Related: The Perils Of The Franchise Agreement

2. Include prescribed minimum information

The CPA prescribes minimum information that must be included in a franchise agreement.  Most of this minimum prescribed information is fairly general in nature and would be contained in the franchise agreement in the ordinary course (for example, name and description of the types of goods or services that the franchise relates to, the obligations of the franchisor and franchisee, and any territorial rights).

There are, however, certain more unusual requirements in relation to prescribed information, which information would not necessarily be contained in a franchise agreement in the ordinary course (for example, the qualifications of the franchisor’s directors, and details of the members/shareholders of the franchisor).  These more unusual requirements must be kept in mind when preparing a franchise agreement.

3. Prepare a disclosure document

The CPA requires the franchisor to provide certain minimum prescribed information to the franchisee in a disclosure document delivered to the franchisee prior to the signature of the franchise agreement (including a list of current franchisees, if any, and of outlets owned by the franchisor; the direct contact details of the existing franchisees; an organogram depicting the support system in place for franchisees; and an auditors certificate confirming that that the franchisor’s audited annual financial statements are in order).

This information is intended to provide the franchisee with enough information about the franchise, its financial viability and potential business success so as to enable the franchisee to make an informed decision as to whether or not he/she wishes to “acquire” the particular franchise.

4. Prepare a non-disclosure agreement

It is important to ensure the protection of confidential information which may be disclosed to the prospective franchisee during the preliminary stages of negotiating and concluding a franchise agreement.

This may include, for example, the growth of the franchisor’s turnover, and written projections in respect of levels of potential sales, income and profit. Although not a requirement under the CPA, it is advisable for a franchisor to ensure that a prospective franchisee executes an appropriate confidentiality agreement prior to being sent the disclosure document.

Related: What Constitutes a Fair and Balanced Franchise Agreement?

5. Beware the “cooling-off” period

It is important to bear in mind that a franchisee has an entitlement under the CPA to cancel a franchise agreement without cost or penalty within 10 business days after signing such agreement, by giving written notice to the franchisor.

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Franchisee Advice

6 Top Tips For Reading Management Accounts

There is a golden key that reveals the secret of whether your business will survive and thrive. It is keeping tabs on the figures that summarise the strength of your business – your monthly management accounts.

Richard Mukheibir

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There is a golden key that reveals the secret of whether your business will survive and thrive. It is not the brilliance of your business concept. It is not your talent for talking clients to sign on the dotted line. It is keeping tabs on the figures that summarise the strength of your business – your monthly management accounts.

Related: 6 Things You Need To Know About Profit And Cashflow

Many entrepreneurs are usually more interested in operations and find product development or sales much more enjoyable than catching up on accounts. I sympathise – I’m one of them! So if you feel the same way, my top tip is always to make sure that you partner with or employ someone who can oversee the finances for you.

But that does not mean you can let the figure boffins and the finances take care of themselves. To function properly in your business, you need to know the outcome of your sales and development strategies – and the story of that is told in your management accounts.

 If you never look at your management accounts, it is like blinding yourself in one eye. It means you risk being literally blindsided by a big surprise, whether it is heading for a significant loss or being confronted by an unexpected provisional tax payment.

Here is how Engela van Loggerenberg, our Group Financial Manager, puts management accounts in perspective for our new franchisees. She urges them to focus on six key areas:

  1. Priorities: Management accounts can help you pinpoint areas that you need to prioritise, whether to capitalise on growth or because they are not performing as well as you hoped.
  2. Strength: All businesses aim to grow their assets over time and the balance sheet in your management accounts will reflect whether and how you are achieving that.
  3. Control: A strong balance sheet is one that shows you have your business liabilities well controlled. The key marker here is your current liquidity ratio, which results from dividing your current assets by your current liabilities. To keep your business healthy, always aim to keep this ratio at least 2:1.
  4. Revenue: Ideally, you want to see your revenue grow month by month. Check your income statement both for the trend in actual revenue and also for actual against budgeted revenue to check how well your strategies are delivering results.
  5. Profitability: Of course, revenue is not the same as profitability. You need to know your gross profit – the basic figure of your sales less the cost of those goods – and net profit, which also deducts a range of other expenses including taxes. Track the percentage of these two profit figures as well as the actual cash amount they represent to keep a check on whether your costs are creeping up too high.
  6. Finance: Most businesses at some point want to finance their growth by borrowing from a bank. A set of well-regulated management accounts is a prerequisite to obtaining finance.

Your management accounts do not have to be particularly complicated to give you these vital pointers – and if you are figure-shy, the more straightforward the better.

The important thing, though, is that you do not allow yourself to be too scared to ask if there is something which is not clear to you. That is the way to keep control of this key to your business fortunes and to keep building your business from strength to strength.

Related: 7 Things Every Entrepreneur Should Know About Managing Cash In The Business

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Company Posts

A Three-Pronged Approach To Franchise Success

Danie Nel, head of business development for Cash Crusaders franchising, says the brand’s success over the past 22 years 
is attributed to the sentiment that “a profitable franchisee 
is a happy franchisee.”

Nedbank Franchising

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What is your current footprint?

220 Stores. We’re looking to increase that number by another 20 stores for the 2018 financial year, which will then bring us to a total of 240 stores. Depending on the economy, we’re looking to grow our footprint even more to around 300 to 350 stores nationwide in the near future.

What are some of your brand’s biggest achievements that other franchises can learn from?

Our ability to read the retail market and innovate to stay ahead of times. We have recently launched an online platform where customers can sell their goods or borrow money — all online. This was a first for online retailing. One other achievement that I would wish to highlight is the launch of our mobile phone range, Doogee, exclusive to Cash Crusaders. Personally, having the honour of opening our 200th store was a tremendous achievement.

Franchisor involvement has also played a big role in the success of the organisation. Our CEO Sean Stegmann and other senior managers are as much involved in the business as any other operations manager or operator.

There is simply no ‘ivory tower’ management in our business and it makes a huge difference.

Related: How Sorbet Franchisee Kate Holahan Is Nailing Success By Following Her Dream

What are some of the challenges you’ve encountered and how have you overcome these?

Some of our daily challenges include securing a premises at a favourable rental and securing a franchisee with sufficient unencumbered capital, who is credit- worthy. Once the store is open, cash flow management and stock procurement is key.

In addition to this, it’s a challenge to achieve profitability immediately and to meet franchisee expectations. It’s also vital to ensure superb customer service and to retain those customers in the current retail and economic climate. I would say that our single biggest challenge is to retain and to build our customer base.

What attracts franchisees to Cash Crusaders?

Our unique retail model that allows for multiple streams of income through one business. These three profit centres include: New goods (variety of imported quality goods), second-hand goods (which we buy directly from the public, either through customers coming directly to our stores, or via our house-buy system offered by some of our stores) and secured lending (a financial service where customers can borrow money against valuables, determined at store level, and the loan is repaid within 30 days — or the contract is renewed for another 30 days with interest and service fees charged).

Why is it important for successful franchises such as yours to have a strong banking partner and how does it benefit both the franchisor and the franchisee?

Gone are the days where you just got a deposit book or cheque book and a little business loan from your bank. Banking has become more sophisticated and the technology that the bank offers is as important as its service, making life for both the franchisee and the franchisor easier on a day-to-day basis.

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