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Master franchisee cuts a deal in the gardening game

RETICULATION and garden supplies company Hugall & Hoile has appointed a master franchisee to run its mowing operations.

Garry Young has taken a 10-year master franchise agreement for a combined “lump sum” licence fee and an ongoing royalty.

The financial arrangements have not been released.

H&H’s two-year old mowing franchise business was being run by a manager, who also had to concentrate on retail stores and other parts of the business.

H&H group finance director Joe Ferrone said the appointment of the master franchisee meant more re-sources could be devoted to expanding the mowing business.

The company has 12 mowing franchisees operating in WA and plans to have 50 by the end of 2003.

It costs $18,700 to buy a H&H mowing franchise plus another $9,000 in equipment. However, the equipment can be leased.

Mr Young said the business had a full-time operations manager who also was a trained horticulturalist.

He said he took on the master franchise because he had been looking for a business opportunity.

“I was looking for a master franchise, preferably in the services area,” Mr Young said.

Franchises, particularly in the services area, have been growing over the past 10 years because they offer people an easier entry into the business world.

People buy into franchises because they are supposed to offer a proven business system.

However, there can be some pitfalls attached to buying the wrong franchise.

Small Business Development Corporation managing director George Etrelezis said it was crucial franchisees followed the business system.

“You need to be disciplined because once you’re into the system you’re locked into it,” he said.

“There are so many franchises around now so you need to choose the one that best suits you.

“You need to check the security of the territory the franchisor gives

you. How exclusive will it be?

“Talk to other franchisees in the system as part of your research into the franchise.

“A lot of people get trapped into buying a franchise because they think they are buying a job. But you have to realise you are buying a business.

“We encourage people to do a business plan regardless of whether they are buying a franchise. It helps them work out whether the business is right for them.”

Mr Etrelezis said prospective franchisees should look at the Franchise Code of Conduct.

The SBDC has a franchise officer who can help people looking into franchises.

Both the Franchise Council of Australia and the Australian Competition and Consumer Commission have publications available on franchising.

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