Katherine Sampson, the founder of sandwich franchise'Healthy Habits', shares her views on what it takes to build a successful franchise, the importance of building a strong foundation and what she did to grow her franchise to a nationally recognised brand in this interview with Alex Pirouz.
Katherine Sampson is the Founder and Managing Director of Australia’s largest and fastest-growing sandwich franchise, Healthy Habits . Establishing her first sandwich bar in 1992, Katherine has expanded her business to 35 stores throughout Victoria, ACT, New South Wales and Queensland, and plans to expand internationally.
She was featured in 2009 BRW Magazine’s Fast Franchises, 2008 BRW Magazine’s 100 Fastest Growing Start-Up Companies and 2008 BRW Magazine’s 50 Fastest Growing Franchise Successes.
In this Q&A interview with Alex Pirouz, Katherine shares her journey on how she built Australia’s largest and fastest-growing sandwich franchises, the important of conducting research and what it takes to build a successful franchise.
Q: Can you briefly describe to us how you started and the path the business has taken you to where you are now?
A: In 1992 I bought a run-down sandwich bar. I then renovated it and called it Healthy Habits. After doing that, I became the busiest store in the food court after McDonalds, KFC and Hungry Jacks. So really I fell into the opportunity, by providing the market a quality product.
Because that store was so successful, I then decided to open up a second, third and fourth store. After running these four stores successful I realised there was an opportunity in the market place to franchise because there was no leader in the sandwich bar category in Australia.
Q: How did you go about realising there was no actual franchise doing what you were looking to accomplish within the industry?
I did research: there was no sandwich bar brand in the country, no-one was sitting in that space at all. There were plenty of fast food operators that were offering healthy food such as Subway and McDonald’s, and other franchises that were implementing healthy products but no-one was operating a sandwich bar.
Q: Once you knew that there was a market for your service, what was the next important step?
It was about building a really strong franchising infrastructure and franchising base. So the first thing I did was look for a consultant who was going to help me build the business. For a period of 8 months we worked together on developing the franchise system and what that involved was doing a feasibility study, financial modeling, preparing documentation, franchising manuals, operations manuals, induction programs and so much more.
Q: How important was this period, relevant to where you are now?
Without a doubt, it is the only reason why this business has such a strong foundation, because when Dymocks bought into the business they were actually surprised at how professional my infrastructure was.
Q: Behind every successful company is a successful branding strategy. What elements are required to make a good brand?
The very first thing I did in going from four stores to a franchise model was bring in a branding strategist. If we had everything go the same way but we didn’t have a branding strategy, there is no way the market would have accepted us and connected with us that quickly.
Q: What components are required for a franchise to be truly successful?
There are many components necessary: very strong expertise, a product that is in demand, a strong foundation through documentation, systems and procedures, a strong brand because people have to connect with you, high quality franchise partners and very strong support in head office, assisting franchisees through their business journey
Q: In order to build a successful franchise what is required from the entrepreneur?
A: Experienced mentors and advisors – you cannot do it on your own, you need to have people who have done it before to help you
Long hours: you need to have a very strong work ethic
Passion: you need to be passionate about your business
Business partners: grow much quicker and make better decisions
Q: What is the number one mistake entrepreneurs make when they look to franchise?
A: Completely underestimating the cost which is involved. This can put the breaks on expansion because you run out of money. The other reason is that they don’t realise how hard it actually is to build a successful franchise. I often tell people that if I knew then what I know now, I would never ever have gone into franchising.
Q: What is the biggest challenge you faced when building your business? How did you overcome that?
A: Financials. I completely underestimated what it was going to cost me. In the end I had to sell off assets to continue to grow the business, and eventually I ran out of funds. I then needed to partner with someone who was going to help assist financially with taking the business to the next stage.
Q: What do you believe to be more effective in terms of running the business, a company-owned structure or a franchise structure?
At one point I had nine company stores and now I have two that I use for testing. Without a doubt, franchise owners are a lot more passionate about running their own businesses and more hands-on than if you were to hire staff. I think franchisees do a much better job at running the stores and therefore I believe it is a better system.
Q: How have you been able to build a unique point of difference in the marketplace and how important is this for a franchise to be successful?
At the end of the day I sell ham, cheese and tomato sandwiches just like every other sandwich bar in the country. We don’t have a unique product, what we do have is a consistent product and brand so customers trust us, know what to expect, love our stores and service.
Q: If you could change one thing within your journey all over again, what would that be?
I would have brought on partners into the business from the very beginning and not done everything on my own.
Q: What is one piece of advice you have for an individual who has a franchise idea?
A: Have a product that is not only in demand but is able to be replicated. There is no use having a business that is only able to be operated at one, two or three stores and can’t run at 50. Anytime you go to create a business you have to create your business as if you have 100 or 500 stores.
Alex Pirouz is the founder of RIDC Advisory Pty Ltd. A Business and Sales Advisory firm partnering with Australia’s largest and fastest growing companies to further increase their revenue. Visit www.ridcadvisory.com.au for more details.