Security solutions retailer OzSpy has reshaped its business model to be more flexible and financially advantageous to franchisees, and called on existing franchisees for input.
Key changes are an affordable upfront fee, cascading royalty fees and more generous franchisee exit rules.
Director Craig Mitchell told Inside Franchise Business Executive “We think this is Australia’s most new age franchise system, with less policing, and an easy exit policy where franchisees can just give notice, pay a small exit fee and leave ,and a cascading royalty system that goes from 8 per cent to 0 per cent by the time you reach just $30,000 in a month gross sales.
“Looking at all the models, this one is the fairest as a percentage based system by its design supports a franchisee if they have a bad month, compared to the franchisor favouring fixed fee systems.”
Mitchell has removed the advertising fee, installing a free marketing assist program that coordinates and set ups marketing campaigns.
“We do this under the franchisees account so once it is setup, they can increase or decrease the spend at their leisure based on how busy they are,” he explained.
Investment in the business has reduced with the franchise fee dropping to $25,000 to $30,000, with a $10,000 deposit and interest free payments over five years.
“I asked our franchisees what would be the perfect franchise system and agreement, and worked from that base, so our new system truly is a franchise system, designed for and by franchisees.”
The business model allows franchisees to take on an OzSpy store, operate a mobile business full or part time, and to either install equipment themselves or use subcontractors.
“We have found that people nowadays are not looking for a rigid system,” Mitchell said.
In this mega overhaul of the business there’s been a reshaping of territories too, slimming down from four types to just metro and regional options, and supply chains have been revamped, removing the approved supplier process.
In-house software upgrades include a mobile friendly quote-building platform.
Mitchell has also introduced a franchising website where potential franchisees create an account and then initially move through a self-serve franchise process to educate themselves about the brand.
“This lets people learn more in a confidential space without being hassled by sales people,” he said.
Mitchell said the business shake up puts it in a good position to expand after the impact of Covid-19 on the business.
“It is no secret that Covid hit the sector hard, and OzSpy was not immune. During this period many of our franchisees took a hit, particularly in WA with the hard borders.”
Mitchell said the two Western Australian stores, and one in Melbourne, fell victim to the impact of the pandemic.
“We also closed the Gold Coast store, but this was more about consolidating the corporate system than anything else,” he added.
Now there are more than 120 franchise territories ready to sell with an initial focus on Queensland opportunities to be followed by interstate expansion once border restrictions are eased.
