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Franchisee Advice

How To Create Good Vibrations In Your Store So Customers Will Shop More

Create a pleasant and energetic environment, and you’ll find that both your staff and your customers tend to be happier.

Basil O’Hagan

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customer-service-advice

How can we be better?

Imagine you are one of your customers. And say you run a Greek restaurant in Sandton. Throughout your meal, you are probably thinking little thoughts about how your experience could be a bit better.

“I wish they had a blackboard with all today’s freshest products on it.” “I wonder why they don’t have any imported coffees?” or “They should offer some lunch specials”… All of these little musings are thoughts you don’t bother to share with management — but they are guaranteed ways to improve customer service.

So make it your mission to find out what your customers really think about your store — ask them for feedback. Try to unlock all those little ideas that occur to your customers. They are pure gold if you want to improve your customer service.

Put your ego aside. Don’t look at these kinds of suggestions as complaints or criticism. Customer feedback is really just advice that can help you run a better business.

Related: 3 Secrets To Franchising Success

Don’t underestimate a good vibe!

Some people just have an engaging personality — they’re fun. It’s hard to put your finger on exactly why, but you know it when you meet them. Some people call it the X-factor, or charisma, or enthusiasm or positivity.

Whatever you want to call it, these people just have voema! They have drive and a positive attitude that make them fun to be around. These are the kinds of people that you want in your organisation. They’ll bring an amazing vibe to your store.

And that’s also why there’s no substitute for the face-to-face interview. When you’re hiring, you can read a thousand emailed CVs, but until you meet someone in person you won’t be able to gauge their personality, and what they can bring to your business in terms of energy, fun and positivity.

When you find people like this in the hiring process, give them a chance. Skills can be taught, but personality can’t.

Outdo! Outsell! Outserve!

customer-window-shopping

You are in a constant race with your competition. Perhaps you’re too much of a nice guy to admit it, but you are. Whether you’re repairing photocopiers or selling Asian food, there is another business somewhere in town doing the same thing. You need to convince customers that coming to you is better than going to your competition.

Make it an article of faith for your business to do everything better than they do. You’re going to be compared, so make sure that you’re always better by comparison.

Is their welcome at the door a bit lukewarm? Then make sure you greet customers with the most heartfelt “Hi, how’re you doing?” they’ve ever had. Do they answer the phone after four rings? You should do it in two! They don’t cater for kids? Instal a play table and some colouring books immediately!

Customers will be blown away, and they’ll see that you’re streets ahead of the competition. Pretty soon the word will be out that you guys are the best copy shop in town. And it’ll be because you’re winning at customer service!

Make positive word of mouth happen

Clearly you want your customers to spread the word about your amazing store. Positive word of mouth is an invaluable form of neighbourhood marketing that can’t be faked.

You can encourage positive word of mouth by making specific offerings or having a specific customer-service habit that is geared to being remarkable, so that customers will tell their friends about it.

What would you like people to say about your store? What is it about your retail outlet that makes it unique in your neighbourhood market?

Be sure you know what that is, and if you can’t think of anything, create an offering that is remarkable. Now try to visualise the exact word-of-mouth compliments you want your customers to share about you.

Here are some examples:

  • “They always make me feel welcome. The staff are so friendly!”
  • “They really go out of their way to give service!”
  • “They always remember my name!”
  • “If you arrive after closing time, they don’t mind opening the store again.”

Related: Makes Your Sales Experience Pleasant With This Advice From Basil O’Hagan

‘We guarantee our food’

Consumer appliances and vehicles usually come with a guarantee. But other products and services can also be guaranteed. It gives customers confidence in your store.

My own experience of this occurred at our restaurant, when I told our staff one day that we were going to guarantee our food and our service and we were going to put it up on our in-store DVD as well on our promotional material.

Our guarantee read something like this: “We guarantee our service and food at The Brazen Head. If you are not satisfied with the food or service, we will refund the full price of your meal and we will give you a voucher for the replacement value of what you would have spent.”

Although initially the staff were petrified, wondering how many people might take advantage of this, in fact nearly all customers were quite satisfied with our service.

Over an eight-month period, we had only one person who wanted their full money back. They were given a voucher which we honoured. This type of promotion also raises the bar for your staff performance so that they must live up to that quality.

Motivational catchphrases

Good staff morale is vital, and a compliment to a staff member can do wonders for their energy and levels of performance. Take a couple of seconds to acknowledge them and their good performances and you’ll have a motivated team ready to represent your company.

Communication in general is vital. A short, quick chat can often get a motivational message across quicker and more effectively than a long, drawn-out meeting.

Here are a few motivational phrases you may wish to try. See what a difference it makes! Try to say these with sincerity and when they’re justified.

  • “Good morning.”
  • “That was great! Just the way we practised it!”
  • “You certainly made Mrs Smith happy today!”
  • “Can you think of a better way to do this?”
  • “You’re one of the best staff members we have!”
  • “You’re always on time, Joe, we really appreciate that.”
  • “Come on Tom, I know you can do better than that. I have seen you do it before.”
  • “If we pull together, it’ll be a breeze.”
  • “If anyone can do it, I know you can do it, Sabelo.”
  • “You guys really make a good team! Well done.”
  • “I’m proud of you all.”
  • “What do you think, Brian?”
  • “I need your help.”
  • “You’re right, Kuli!”
  • “We’re glad you work here!”
  • “Thank you!”

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.

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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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