Maximising opportunity, minimising risk
Pacific Retail Management is an independent, fully Australian-owned company that currently has four brands under its banner: Kick! Juice Bars, Love Crepes, Go Sushi, and the brand new Wasabi Warriors. This grouping of multiple retail brands has enabled Pacific Retail to become one of Australia’s premier franchise groups, and is a strategy that enables both the franchisor and franchisees to benefit from increased group purchasing power, marketing campaigns, lease negotiations, and franchisee recruitment.
Pacific Retail Management is a relatively new brand management company, but at the same time it comes with a lot of experience. Nicola Mills, the Group Managing Director, has a Master of Business Administration from the University of Adelaide, and has over 15 years experience in management and marketing. Norbert C. Baillette, a National Business Development Manager at the company, has over 20 years experience in management, marketing and development. And David Hill, another National Business Development Manager, has seven years experience in franchising and began his career as a franchisee, so he has seen both sides of the coin.
The franchise that David Hill took on was a Kick! Juice Bar. That was in 2004, when Kick! was Pacific Retail’s only brand – the one they “earned their spurs” with, Hill says. Hill himself had five juice bars before he bought into Pacific Retail Management and moved over to the franchise side of the business. It was around that time that they developed a robust franchise system, went through the learning process, and decided to kick-start their brand managing.
“At Pacific Retail Management we’re in it for the long haul in franchising,” Hill says. “We wanted to expand quicker than we were at that stage, so we went and bought what was then called Go Franchise Group, which included the brand Go Sushi. And then we progressed from there.” Go Sushi is now their major franchise, the brand with the most stores. They currently leverage that popularity to sell Kick! Juice Bars as well, offering them as a back to back kiosk with Go Sushi. “Juice and sushi goes really well together,” Hill says. “They’re both healthy.”
Their third brand, Love Crepes, is one they are currently developing with Norbert Baillette, who previously started The Crepe Cafe. “We should have three stores open by the end of the year,” Hill says of Love Crepes. Their newest brand is Wasabi Warriors, a high quality sushi brand Pacific Retail has devoted a lot of time, effort and money to developing.
Altogether, that makes four, all of them food, with no pressing plans to add to that number. “The objective going forward is to grow, and that comes in two parts,” says Hill. “One is organic growth, which, as the business development guy, I see going fairly rapidly in the next 12 to 24 months.” The second part, according to Hill, is more acquisitions. They are aiming for more sushi brands, but outside of that they simply mean to stay within food. “It makes sense that we continue to acquire sushi stores.”
Each of the Pacific Retail Management brands has something special going for it. “Go Sushi is the number one franchising system for sushi in Australia,” Hill explains. “Love Crepes is unique, there are few crepe or pancake retailers in Australia. And Wasabi Warriors, which is our new brand, there’s definite differentiation there. Wasabi Warriors is all about eating good, doing good, and feeling good. It’s a brand we’ve developed and it’s very much about great quality food, but also about being responsible for the environment through sustainable food sources.”
The franchising process
To become a Pacific Retail franchisee, you have to go through an application process. For Pacific Retail, an ideal candidate does not necessarily have to have experience with food or sushi – they have a full training program for that. What they are looking for are people who have an understanding of running a business. “But also, we’re looking for people who have a real passion and energy to succeed. At the end of the day, what you put in, you get out. You have to work hard, but if you work hard and you’re smart, then you’ll see the rewards.”
The training process franchisees go through includes a one week course held by Pacific Retail’s Retail Training Group at the Pacific Retail offices in Sydney. “The course includes health and safety, rostering, managing your business through the P&L, local store marketing plans,” says Hill. In addition, franchisees are put onto a Westpac small business course. After that, there is the practical in-store training to go through. With Wasabi Warriors, the in-store training also includes time with their Japanese chef Hedeo Dekura.
Once they are trained, franchisees are offered a lot of support, in both operations and marketing. “We have a local store marketing handbook that franchise partners can use and utilise for various initiatives at their local store level, but we also have national marketing promotions too.” We also have an operations team on the road who are in constant contact with our partners.
An Australian focus
The majority of Pacific Retail’s stores are shopping centre-based at the moment, although Hill says they are looking at other areas as well. Their first Wasabi Warriors store, for instance, will be a high street shop, and that is opening in October in Brisbane CBD. “With sushi we’re looking more and more at regional centres,” Hill says. “We are experiencing really great sales in places like Toowoomba and Albury – and want to be in more regionals.”
However, no matter what centre – shopping or regional – they are looking at, do they have interest in going international? “Our core focus is always Australia,” he says. “The majority our stores are in South East Queensland, but we’re also in West Australia, Victoria, and we’re just about to move into South Australia – so we are keen to expand across Australia.” Hill says they are often approached by international prospects, but it is really important to find the right organisation to partner with overseas.
Making people certain
“The main challenge for us, and other franchises at the moment, is growth,” Hill puts succinctly. “That means recruitment of franchise partners, people who are willing to invest the money and time, and I think that will be a challenge for a while. We’re trying to maximise the opportunity there.”
In order to maximise that opportunity, Pacific Retail Management has come up with two initiatives that Hill sees as very important to their future growth. “One is, for a new franchise partner, whatever the brand, we guarantee $100,000 net profit in year one. The second is we provide a new franchise partner up to $100,000 loan to help with the set up of the business,” Hill says. By placing their own capital on the line, Pacific Retail hopes to assuage investor uncertainty. “We’re putting our money where our mouth is, essentially.” In addition to those two initiatives, Hill says they are in the process of introducing a “Manage to Own” program where they will open company stores for people to manage and then, over time, own. That initiative, Hill says, is particularly relevant to those in regional areas – which are, of course, one of Pacific Retail’s target. Like the other strategies, it helps minimise risk for franchisees.
In the next 18 months, Hill hopes to add 15 to 20 stores to their roster, which would take them to approx. 45 stores. “Our current target is to get to 50 stores, which should mean we are a good solid business, and then move to the next goal of 100.”