Franchise innovation winners revealed: All their tips and tricks

Famously, Google engineers are allowed to spend 20% of their time working on their own projects in a bid to encourage innovation, but for smaller businesses without the resources of Google this approach can seem prohibitive.

That’s why SmartCompany sponsored the Franchise Council of Australia Franchise Innovation award, which was presented last night. The award recognises an individual or group within a system responsible for creating a successful business innovation. The innovations recognised are achievable and sure to inspire you in your own business.

We’ve spoken to the winning business and the finalists to explore how they foster innovation.

1. Winner: Battery World

In 2007, Townsville Battery World franchisee Greg Leslie had what he called “a light bulb moment” to bring people into his new franchise he would get consumers to drop off their old batteries for recycling.

At the same time, Leslie guessed they might hang around and check out the store.

He was right and now a battery recycling scheme is run across all of Battery World’s 77 franchises. The company estimates it has achieved over $1 million worth of editorial space purely because of its recycling initiatives.

Kerry Hannah, national marketing manager for Battery World, told SmartCompany that Battery World has to battle consumer perceptions that they don’t necessarily need that many batteries and getting consumers to come into a store is the hardest step.

“On the other side of things we wanted to be responsible socially; we were selling batteries and we wanted to close the loop on that,” says Hannah.

“That was the acorn of the innovation side of it, not just the product we were selling but looking at what we needed to do, which was be responsible and to get people into the store.”

Hannah describes Leslie’s idea as one “founded in necessity” and says innovation is not just about a product, it is about working within the community as well.

Once Leslie told Battery World about his idea the marketing department assisted him with design and communication issues, creating a Battery World character that the recycling message could be built around.

The initial scheme involving Leslie’s Townsville store operated as a pilot for the innovation and Battery World then considered how to share the scheme with the other franchises.

“That’s hard because when you introduce that idea to a whole heap of franchisees they may not be passionate about it,” says Hannah.

“We used those franchisees who had taken it up and who had experienced success to speak to the other franchisees and explain the process. So it was a matter of using their peers and building it into the company and culture so people think about being responsible for recycling.”

Hannah says the key was “finding a level that everyone can be passionate about” so Battery World could put one standard offer out.

She describes this as “the transition between one franchisee’s idea and making it something that works in a network.”

“Innovation comes from both necessity and a crazy idea that is sometimes hard to put into a franchised group. So it is not always easy to put into something that is systemised but within those ideas there is always something you can pull out and work through,” Hannah says.

“That’s why you join a franchise group, because you want the assistance to take those ideas to the next level.”

2. Runner-up: Coffee Club

Coffee Club has been enjoying a significant amount of success, expanding to over 270 locations across the country and the Asia-Pacific. But joint chief executive Dominic Gallo ran into a problem after he conducted research into how his franchisees were tracking.

As it turned out, despite ongoing success the franchisees simply didn’t have an idea as to how they were performing in relation to the rest of the group.

“A third of the franchisees were unsure of how they were performing,” he says. “They were asking things like how they sat in the system, and how they knew they were doing well.”

“So we needed to come up with a way of benchmarking everything.”

The company came up with a system called the Six Star Consistency Program. It uses a range of surveys to find out how each franchise is performing in relation to expectations, performance, brand engagement, and a range of different metrics.

But while the results allow the company to identify weaknesses in the business, it doesn’t necessarily translate to a whole lot of extra work. Gallo says by simply making the franchisees aware of the results, it creates an incentive among the individual locations to beat each other.

“Now, we publish them nationally, so people can see how they sit within the franchise.”

“If they spend a lot of time working on their business and driving it, their star rating will improve.”

The detail of each survey allows each franchisee to delve into each specific problem: it contains marks on transaction growth, sales, mystery shopping, a short store visit appraisal and an annual appraisal.

The six stars stand for progress report, business development review, mystery shopping, comparative growth, sales model and product alignment.

It’s a simple system, but by documenting each benchmark, Gallo ensured improvements across the network.

“The biggest improvement we’ve seen is just with people engaging in the system. So we’ve seen some real improvements just from that alone, from franchisees wanting to do better and to get a better star rating.”

“It’s really promoting a sense of achievement and recognition across the system.”