www.franchise.net.au

Your essential guide to buying a franchise

AUS $6.95NZ $7.95

Healthy Habits

The boss and the rebrand

FRANCHISING SURVEYS

State of the industry:WORKING

CAPITALWhat you need to know

THE BUSINESS OF ICE CREAM

Freeze factorTake the plunge

Pool and spa opportunities

Franchising10 QUESTIONS

Nov/Dec 2012 VOL.25/No.6

YOU MUST ASK THE FREEDOM FACTOR

INVESTING IN A LICENSED BUSINESS

Your essential guide to buying a franchise

BE INSPIRED: MCDONALD’S, JIM’S, PRICELINE, AGL, BAKERS DELIGHT

NEW HABIT

10| FRANCHISING NOV/DEC 2012 WWW.FRANCHISE.NET.AU

Inspire|Interview

Sandwich chain Healthy Habits has a brand new look. Sarah Stowe spoke to managing director Merrill Pereyra to find out more

Merrill Pereyra has set himself the

task of redefining the franchised

chain of sandwich bars, Healthy

Habits. The business was

established 16 years ago by Victorian-based

Katherine Sampson but since 2009 it has been

owned by the Dymocks Group.

Pereyra has been managing director for

a year, and in that time has set in motion a

fundamental re-brand and menu overhaul

that he believes pares it back to its core

values, serving healthy, affordable and fresh

takeaway food.

While he is new to the sandwich

market Pereyra comes with good fast food

credentials: he has spent much of his career

developing overseas sites for McDonald’s.

Franchising first chatted to Pereyra a year

ago, when he took on the mantle of managing

director, and we got a taste of how big the

changes might be. Six months later and we

had a sneak preview of the brand’s earthy

new look – a far cry from the bright, cheerful

branding that Sampson built her business on.

Now Pereyra is ready to launch the

rebranded business with a new store in

Melbourne and has 10 existing franchisees

keen to adopt the new livery.

“These are exciting and challenging times,”

Pereyra says. “Our website has launched

and we’re now testing products. The perfect

scenario would be to take the menu and test it

in three or four stores but we don’t have that

luxury. I have people helping me review the

current results and what will work better with

the Healthy Habits business.

“McDonald’s has 10 stores to do

something like this, but three months into the

GETTING INTO A

NOV/DEC 2012 FRANCHISING | 11WWW.FRANCHISE.NET.AU

Interview | Inspire

hsw.com.au

2013 COLLECTION OF HOWARDS FAVOURITES

SIMPLYORGANISED NEW

Products, Solutions & Clever Ideas

Inside!

Operating over 10 years Over 50 stores in Australia Global product sourcing Master franchises in 5 countries Intensive training and ongoing support Strong national marketing support including annual catalogue

Looking for an organisedbusiness opportunity?

Australia New Zealand Singapore Spain Philippines Ireland

NEW SITESNOW AVAILABLE

hsw.com.au

launch and we’ll review it. The

board is confident of the potential

in the market.”

Fundamental to the brand’s

success is meeting the growing

consumer demand for healthy

meals, and to ensure the menu fits

the bill not just in appearance but

nutritionally.

Seventy percent of customers

want healthy but tasty food,

Pereyra says.

“I hired a nutritionist early

on to review the menus, pick out

which were too high in sodium

for instance, and that really

helped us.”

So what’s on the menu? Franchisees believe more on the

menu equates to more sales, says

Pereyra, but he believes less is

more. The offer has been fine-

tuned: there are now five rather

than 35 bread choices, and a

signature bread is a low sodium

option. Most meals come under

2000 kilojoules.

Rather than offering fried

chicken as a sandwich or filling,

the chicken will be baked.

Adopting alternative cooking

methods produces efficiencies

and maintains the nutritional

aspects of the food – high-pressure

processing, power vacuum-sealing

under very low temperatures for

instance, and there’s no need for

extraction systems in-store.

And Pereyra is banking on an

Australian twist to the menu to

attract customers; spiced up dishes

are inspired by the natural flora of

Australia, such as lemon myrtle

and pepperberry. “Hopefully the

spices will add a nice new edge,”

he says.

Pereyra has been schooled in

the famous three-legged stool

principle beloved of McDonald’s –

franchisor, franchisee and supplier

must all be profitable from

the relationship. Major supply

contracts have been maintained,

and the supply chain is now

driven by health rather than price.

But of course price is going to

I hired a nutritionist early on to review the menus, pick out which were too high in sodium for instance, and that really helped us

12| FRANCHISING NOV/DEC 2012 WWW.FRANCHISE.NET.AU

Inspire|Interview

be an issue; it doesn’t make sense

to sell items costing above $10.

And this is a challenge. Although

the sandwich bar chain has

benefited from the resources at

hand in the Dymocks Group, it

still lacks the economies of scale

that directly affect costs; these

will come as the brand grows its

footprint.

But for now, with a new menu

and a new look, the focus is on

consolidating the message and

building up customer loyalty. The

lunchtime hours of 11am to 3pm

remain the major source of sales.

“Based on the rebrand

investment, we know we need to

bring in x number of customers,

and this should flow to the bottom

line. It’s better to be upfront so

franchisees know what target we

are aiming at,” says Pereyra.

The aim has been to bring

investment down to under

$300,000 for new stores and to

effect a low-cost rebrand for

existing franchisees to ensure

there is a good financial return.

The franchisor is contributing

nearly 40 percent of the refit

costs for franchisees already in

the network. The tight budgets

also mean there is negotiation

with shopping centres’ over their

stringent refit demands which

can influence the level and type

of lighting, in-store counters etc.

Many landlords are requiring

more elaborate works that will

affect the ROI.

Pereyra is hoping the tough

retail environment is softening the

shopping centres’ approach.

While 50 percent of the

business is already committed to

I want my franchisees to understand we came up with a new brand and a new menu, but what happens when the customer walks in? Will they come back?

14| FRANCHISING NOV/DEC 2012 WWW.FRANCHISE.NET.AU

Inspire|Interview

Harmoniq is revolutionary sales, accounting and business management software from Micronet Systems. It’s simple, powerful, and extremely flexible and is the first product of its type that can be truly personalised to suit the way you want your business and your people to work, every time.

For information about our Franchise Solutionsvisit www.harmoniq.biz or call (02) 9542 2000

A product from

MAKEBUSINESSMOREPERSONAL.Michelle just...tailored her ownscreen and customisedher dashboard.

Cus

tom

isat

ion

the rebrand, Pereyra says, these initial

refits will be used as examples to inspire

the remaining outlets.

There are other plans for the system,

once any glitches in the new model have

been smoothed over and the re-brand is

earning its keep.

Looking aheadPereyra has his sights set on alternative

models, broadening the locations and

the set-up to appeal to a variety of high

volume takeaway dining markets.

For instance, street front concepts,

hospitals, universities, schools – perhaps

even a link with the bookstore side of the

parent company. Designs on the table

include sandwich bars with a create-

your-own juice bar element, all packed

into a neat 50 sq m footprint. “You don’t

need a walk-in fridge, you can use three

commercial fridges,” Pereyra points out.

The rebrand has been born out of

a desire to create an affordable, more

compact menu with creative yet healthy

options, at the same time tightening

efficiencies. The developments have

been grounded in customer research.

And that’s not over yet. In 12 months

there will be more surveys conducted

“to see what really happened,” he

says. “We try to be transparent with

franchisees, we don’t have all the

answers but can go back to change and

do things better. We’re small enough to

make mistakes and then change them.

It’s execution, not brand and menu, that

effect the change.

“I want my franchisees to understand

we came up with a new brand and a

new menu, but what happens when the

customer walks in? Will they come back?

“We will keep evolving. There

are no expectations that it won’t be

challenging.” F

Healthy Habits will be building its brand awareness through a variety of channels, including the sponsorship it has secured for the Sandwich Championships with the aim of targeting the kids’ market, and introducing the youngest generation to the practice of making a healthy sandwich.

We try to be transparent with franchisees, we don’t have all the answers but can go back to change and do things better. We’re small enough to make mistakes and then change them

A QUICK BITEThe new Healthy Habits• Theme: sophisticated, fun, modern

Australia with an ecological edge

• Earthy palette reflects Australian

landscape

• Orange and white branded

uniforms

• Branded feature walls

• Slimmed down menu with local

flavours

• Improved training and operations